What are good investment options for a 16-year-old with $4k? Any recommended books for early retirement?

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  • #95287 Reply

      My teen stepson is really interested in learning about investing. He has some money saved and wants to make smart moves. He’s 16 and is looking at VOO. I am not knowledgeable about investing at all and was wondering if there were some recommendations of things he should be looking at to invest in?

      Overall he has 4k to start with which I know isn’t a huge amount but he’s saved it all on his own and wants to make it work for him.

      Also are there any books he could read? He is definitely starting life with the goal of retiring early.

      #95288 Reply

        If it’s from earned income, open a Roth IRA and invest into that as he could withdraw penalty free in 5 years to help pay off something he may need or a start of a down payment or just leave it to grow until he retires.

        #95289 Reply

          VOO for many is a favorite ETF.

          #95290 Reply

            Get him a library card so he can check out any and all books about personal finance.

            In high school, I read rich dad poor dad, millionaire next door, random walk down wall street, real estate investing, etc…

            #95291 Reply

              Regarding a book, The Simple Path to Wealth by JL Collins. I like starting with VOO and learning more and more.

              #95292 Reply

                VOO is great for a teenager.

                Put it in, add a little to it each month, AND LEAVE IT ALONE. Don’t be tempted to sell any or move it.

                He can open a retirement account when he gets a job, but it’s extremely important to have investments that you don’t have to wait until you are older to access as well.

                Useful: Best investment account for a 10-year-old?

                #95293 Reply

                  Voo, VT, VTI are all good ETF to start with. And they are good ones to invest and forget.

                  I am all in for lazy investment.

                  #95294 Reply

                    The money guys are a great podcast or YouTube to listen to! They are releasing a book in yhr next month or so, I expect it to be great.

                    #95295 Reply

                      I would recommend the book, the Armchair Millionaire. It discusses the basics of paying yourself first, automatic investing and the magic of compound interest.

                      #95296 Reply

                        VOO & SMH are two set and forget ETFs that he can DCA into forever. Just make sure he turns on DRIP. If they’re held in a Roth IRA, they would compound tax free, but he would have to wait until 59 1/2 to withdraw penalty free.

                        Rich Dad Poor Dad, The intelligent investor, The richest Man in Babylon and The Creature From Jekyll Island are all good books. At 16 $4K is a good amount of money, and will compound at an amazing rate over the next couple of decades. Please tell him to always invest first. Pick a dollar amount and invest every time you get paid, and throw extra in there when you can.

                        Related: $375k income, $100k+ to invest: best investment strategies?

                        #95297 Reply

                          Voo is a great choice. Read the simple path to wealth or just watch an interview with JL Collins on YouTube. The best methods of investing are actually quite simple

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