AA for a child

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Topic Author
just_learning
Posts: 18
Joined: Sat Aug 03, 2019 2:44 pm

AA for a child

Post by just_learning »

Hello,
My nephew received a gift from his grandma and his parents were wondering how to invest it.
The kid being young (15), I was considering to suggest to them, an all stock portfolio-
20% S&P
20% US small cap
20% QQQ
20% Intl stock
20% Emerging market stock

I haven't looked up how much of the QQQ overlaps the S&P...
One other possibility is to add a bit of Bitcoin...

Alternatively, I suppose I could suggest one of the Vanguard target retirement funds- 2070 (wonder if it exists yet).

I would appreciate any thoughts.

Thanks.
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BolderBoy
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Location: Colorado

Re: AA for a child

Post by BolderBoy »

just_learning wrote: Fri Dec 04, 2020 11:02 pmThe kid being young (15), I was considering to suggest to them, an all stock portfolio-
20% S&P
20% US small cap
20% QQQ
20% Intl stock
20% Emerging market stock
How about simply 80% Total Stock Market Index and 20% Total International Stock Index?
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
RyeBourbon
Posts: 313
Joined: Tue Sep 01, 2020 12:20 pm
Location: NJ/Philly

Re: AA for a child

Post by RyeBourbon »

BolderBoy wrote: Fri Dec 04, 2020 11:16 pm
just_learning wrote: Fri Dec 04, 2020 11:02 pmThe kid being young (15), I was considering to suggest to them, an all stock portfolio-
20% S&P
20% US small cap
20% QQQ
20% Intl stock
20% Emerging market stock
How about simply 80% Total Stock Market Index and 20% Total International Stock Index?
This^^^
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Peter Foley
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Location: Lake Wobegon

Re: AA for a child

Post by Peter Foley »

If part of this is a learning experience for your child or even for you if you are new to investing, I would start with a simple portfolio such as the one suggested by BolderBoy.

If the funds will be used for college, I would suggest a mix of total stock market and total bond fund because of the shorter time frame.
theorist
Posts: 855
Joined: Sat Sep 28, 2019 11:39 am

Re: AA for a child

Post by theorist »

just_learning wrote: Fri Dec 04, 2020 11:02 pm Hello,
My nephew received a gift from his grandma and his parents were wondering how to invest it.
The kid being young (15), I was considering to suggest to them, an all stock portfolio-
20% S&P
20% US small cap
20% QQQ
20% Intl stock
20% Emerging market stock

I haven't looked up how much of the QQQ overlaps the S&P...
One other possibility is to add a bit of Bitcoin...

Alternatively, I suppose I could suggest one of the Vanguard target retirement funds- 2070 (wonder if it exists yet).

I would appreciate any thoughts.

Thanks.
You might recommend this book to him:

https://www.amazon.com/Second-Grader-Be ... 8&qid=&sr=

Quick fun read and will let him make his own — well informed — decision.
cowbman
Posts: 318
Joined: Sat Jan 14, 2017 2:10 pm

Re: AA for a child

Post by cowbman »

You could make this even more simple and just buy into the Target Retirement or LifeCycle funds. You'd have to eat a little higher ER though.
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birdog
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Location: Anytown, USA

Re: AA for a child

Post by birdog »

My recommendation is 100% VTI (Vanguard Total Stock Market). If a dedicated international fund is desired then carve off a small slice (20%) to allocate to an international fund, as recommended above. Simplicity is key, IMO.
rkhusky
Posts: 10909
Joined: Thu Aug 18, 2011 8:09 pm

Re: AA for a child

Post by rkhusky »

What does the child think? Perhaps he wants a car instead?

If he wants to invest his gift, 100% Total Stock Market would be fine.
Topic Author
just_learning
Posts: 18
Joined: Sat Aug 03, 2019 2:44 pm

Re: AA for a child

Post by just_learning »

Thank you for your replies.
I think I will suggest he read one of the books first.
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Brianmcg321
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Joined: Mon Jul 15, 2019 8:23 am

Re: AA for a child

Post by Brianmcg321 »

100% in VTSAX.

Keep it simple.
Rules to investing: | 1. Don't lose money. | 2. Don't forget rule number 1.
BitDude
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Joined: Tue Jan 13, 2015 1:59 am

Re: AA for a child

Post by BitDude »

rkhusky wrote: Sat Dec 05, 2020 8:35 am What does the child think? Perhaps he wants a car instead?
haha this is counter intuitive to the boglehead ways
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CAsage
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Joined: Sun Mar 27, 2016 6:25 pm

Re: AA for a child

Post by CAsage »

Depends on when the Teen might need the money, and how much is this? For college, a nice bond fund since it will be spent in 4~8 years. If it's not needed for that, then Stock - at least half domestic, but any percentage. I would also seriously look at funding a Roth IRA as soon as the Teen gets a paying job, AND he doesn't need it for college or starting life. If the Grands plan to keep funding the younger generation to get the money out their estate, well, lots more to think about!
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.
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