Oct

3

 I am rewarding my son for getting an after school job as a server in a popular nearby restaurant. He is making great tips and a bi-weekly check and promises me that the job will not be an excuse for a reduction in grades at school. He is in that exciting phase of life—drivers license, first car, first regular job, cash in pocket, etc. I opened a roth ira custodial account and learned that I could have done it sooner for him since he was already working around the house via chores and some other odd jobs that were not as regular as what he is doing now. My understanding was that his direct deposit regular paycheck had to be established that proved that he was employed to be able to have the ira. I also thought that funding of the account had to come from the income source. But no. Only I can fund the account, access the account (till he 18y/o), make trades for the account till he is 21y/o. There are no proof of income papers to sign, etc. So I want to harness the engine of compounding and unleash the power of the natural upward drift of the market for his time horizon.

So with the market up since 2009 –one of the longest bulls in history; how does one invest these beginning funds for the next two to three years. Obviously I would love to buy no load index funds during panics if possible. I offered my son a matching contribution from me to him for the next two years–making him understand that money put into the ira cannot be taken out till retirement to help get the fund started and some wise investing habits instilled. All ideas on funding would be appreciated.


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