| Young investor plan of attack |
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Kiaser
Senior Member
Cash: $ 43.05
Posts: 209
Joined: 12 Apr 2006
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| Young investor plan of attack |
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I'd give anything to go back ten years ago (I would be 15) and give myself a plan of attack on everything financially. However, I don't own a DeLorean and I'm not best friends with a crazy scientist who builds time machines out of them so I can't go back.
However, there is the next best step. I could give that knowledge to those younger than I and benefit from it myself in the process.
I have a cousin who is 13 who is nearly a clone of myself when I was that age. I was planning on getting some information and opportunities setup for him so that the next 7-10 years of his life he will be setting himself up to be in a very good position financially in his early twenties. Some of the idea's so far are establishing his credit immediately, building his credit throughout the next 7-10 years, setting up financial accounts (banks, mutual funds, IRAs, etc), and having a doctrine for him to follow and how to handle his money that he receives in the next 7-10 years (such as putting what percentage of his gross to what).
By the time he is 20, I'll only be 32. I may not be able to give myself an extra 10 years worth of financial strength, but I'll at least be able to benefit from him as a co-investor and possibly get opportunities to invest in things I wouldn't have been able to in any other situation.
I was thinking of getting him a secured credit card (he has money saved up) just to establish credit, however I'll have to check on age limits. I was also considering adding him as a second account holder on one of my major credits cards (I have excellent credit and very high limits), as I've heard this can raise someones score by doing so. Also, anytime he (or his parents) were to buy something for him that is a little expensive (500+) I could go co-sign a loan for him and they could pay it off over time to establish some installment account history (of course making sure it would appear on his credit). The only other thing I have is getting some percentages down as to where the amount of his earnings and savings needs to go towards (such as 20% to IRAs, 20% to mutual funds, 20% to emergency money market accounts, etc).
What would you guys do and teach to yourself if you could go back to your early teens?
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Wed May 10, 2006 3:33 am |
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Stock Mama
Full Member
Cash: $ 13.80
Posts: 68
Joined: 06 Apr 2006
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What I would like to teach my teen self would be:
* Before the age of 16, how to be a kid entrepeneur and start making money early, and stop being so freaking shy about everything
* At the age of 16, how to find a good summer job and/or after school job (no one told me that you had to start months before summer if you wanted a better summer job than picking beans off a belt at the cannery)
* That my "college account" had all of $20 in it, so paying for college would be all up to me (that came as a nasty shock -- my folks had done better for my oldest brother).
* That keeping my grades up and getting involved in organizations in and out of school was worth cash because it would have qualified me for a lot more scholarships.
* Where to put my college money besides a savings account. Of course, there are a lot more options these days than there were back when I was just a tot.
I wouldn't worry about building his credit when he's still so young. One of those credit cards that works like a debit card (where you deposit money and he uses the card to spend it) would be fine, and would help him build the mental discipline to only use the card when he has enough money to cover the cost of the things he wants to buy. Plastic is also a convenience these days, especially if he wants to shop online. When he's close to college age, he may be in need of student loans and such, so help him find out how to qualify for those.
The best thing you can do for him right now is to teach him about how important it is to save for retirement starting as early as possible. If he's saving for college, most of his money will go there, but socking a little aside for retirement builds a good habit, and saving for retirement from day 1 of that first job will make retirement a whole lot more comfortable.
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Thu May 11, 2006 3:08 am |
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JCook
Full Member
Cash: $ 11.20
Posts: 56
Joined: 24 Jan 2006
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I wouldn't worry at all about his credit score.
I would stress the power of compound interest. The growth of steady investing over a long period of time.
I also stress staying out of debt.
These are the things I talk to my kids about.
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Mon Jun 05, 2006 3:03 am |
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