How can a 20 year old start investing?

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  • #86303 Reply

      My 20 year old son is still in his second year in college, he works summers and has an interest in investing.

      My question is what type of investment should he start with? Retirement or something he can use to purchase a house with.

      #86304 Reply

        Definitely should be maxing out a Roth IRA. Hopefully he can do that *and* save for a down-payment on a house, but if he decides he wants to use the money he’s put on a ROTH for a house, he can withdraw $10k for a house without penalty.

        #86305 Reply

          my son is slightly older with a degree and a good job. His recent goal is to buy a house (he is renting now) In high school I advised him to fund a Roth.

          Once he got a job I explained the importance of a bridge account in case he decides to retire early which he did. He self manages and is doing a great job.

          After long consideration, I advised him to buy a duplex near his work as a stepping stone to the remote house he will want down the line. He understands that having a tenant pay for his mortgage will allow him to not pay rent, possible double down on the mortgage, and or save a down payment. Otherwise, there is no way he can invest, pay a rent, save for a down payment, and enjoy life.

          I think it’s a solid plan and there are duplexes in his area much cheaper than the houses he was looking at.

          Don’t miss: Do people recommend to max out this mega backdoor Roth contribution?

          #86306 Reply

            A total market index fund through a Roth IRA.

            #86307 Reply

              We had our kids focus on maxing out a Roth IRA at that age. Any money above that went to a brokerage account.

              A Roth IRA at a young age and low tax bracket is a great way to get money in retirement and pay very little or no tax on it and that money has so many years to grow.

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