Getting a young adult financially literate

[NitroZ7]

My daughter will be 18 in a few weeks and I'm thinking about opening a brokerage account at Vanguard for her and funding an amount for her to start her initial investment (Maybe $10,000). I'm thinking I may just open it and fund it and have her speak to an advisor there and sort of have her sink or swim. I have used Vanguard for years so I'm not worried about them steering her wrong but I'm wondering if I should give her recommendations or let her just deal with it on her own with the advisor. I would likely recommend an all in one index fund or just and S&P for the minimum and do automatic investment but I sort of feel like it may be a better lesson to have her just deal with it all on her own, make her own decisions and essentially own it for better or worse. Anybody do anything similar for the grown kids? They really don't do much in school for these kids in regards to managing money. She has about $8,000 saved but she is so conservative she would never invest it so I'm sort of going to put the seed money in just for the sake of getting her in the market with he hopes that it will urge her to start thinking about investing.

[boneil]

My father talked to me about stocks once. He was mad because he wanted to buy GOOGL when they were coming public. He called a broker and they told him he could buy on the open market but not the ipo price. He was mad and thought it was basically a scam that allowed the big boys to buy something cheap and then dump it on the public.

He also talked to me about Gold. He bought a bunch of gold coins when it was around 300 per ounce. He then sold it when it was over 600. He sold it because the gold was just sitting in his drawer and figured he would have much more fun with a classic sports car. He thought the car would appreciate more than the gold would and he could drive around in the same car he had when he was growing up. Years later, gold is over a 1000, and the car wasn't the real deal and lost about half of it's value.

Point being, even the bad choices are good lessons and any discussion about investing is a good start. And I would think the more discussions you have the better she will be in the long run. I would be there with her to talk to an advisor, help her make choices and explain why you choose one way over another. The more involved you are, the more it shows how important it is.

[Jeff from Iowa]

Send her to your advisor of choice and let them do their job and educate her and decide what to invest in.

Ive given 1000 to several friends kids for graduation and done what I said above, I did go to the first meeting to introduce them and help them get a relationship started and to be sure and emphasize the broker works for the kid...

[polywad6963]

Dont know if its the same thing, but in HS we had a class that had to do with buying/selling/holding individual stocks. We had 10k and did it for the whole first semester, most sucessful had no homework the second half of the year.

In the Navy I setup individual stocks and managed it for 6 years, I used that money to pay my first year of flight school, and my college fund took care of living expenses and rest of my training. Its valuable either way you do it!

[brnzbaklvr]

I don't buy everything Dave Ramsey says but he has some good books geared towards teens and young people just starting out....He spends alot of time talking about being disciplined with your spending... and that in today's world is every bit as important as investment results....