[Ryan]

I started a company in July of 23′. My son, now 15 years old has been instrumental in my sucess. He has amasted a small amount of money during the past 19 months.

I recently 1099 him for $14,600 for the 24′ year. Ive been educating him since he was young about the importance of living simple, investing often and the AMAZING benefits of compounding interest.

With that said, I want to use $14k and set him up with an IRA for the 24′ and 25′ year.

This was a contributing factor behind the 1099 (showing income) along side lowering my taxable income.

My investor said “be agressive” and I totally agree. He has a “patomic” model that is averaging 13-17% returns year over year. Its a managed fund, following the 30 most targeted and stock in the market.

However, the 1.6% fee has me scratching my head. I’m just asking for suggestions. It’s my son’s money and my only goal is to get him invested religiously and start seeing that beautiful compounding interest in the future.

I never want to see him struggle financially like we did when he was a baby.

Any suggestion and advice appreciated!

[Theresa]

Open a vanguard account and invest it in vtsax or voo or something along those lines. Set and forget it.

You will likely outperform that fund suggested when you factor in the fees.

[Thompson]

How far back does this fund go back because 13-17% is higher than average. If it’s been like 40 years, yeah, that’d be great and I’d personally be willing to pay that fee.

If it’s been since 2020, that’s kinda expected and you’d be better off doing it the old fashioned way.

[Rochelle]

Open up a custodial ROTH IRA account. You should be able to open and fund the account for 2024 before tax day this year (for LAST year) up to $7000.

The custodial ROTH account allows you to manage the account on his behalf until he is a legal adult. The money in the ROTH account will grow tax free.

If you open it in Schwab, you can invest in whatever ETF’s you like, preferably ones that pay dividends and follow the S&P 500 index (be sure to reinvest the dividends).

There are many ETF’s that have very low fees. Then, when he earns money this year, you can continue to make contributions to it, (up to $7000), as long as he has $7000 in income.

Good luck

[John]

This is a good time to teach him how a 1.6% fee will result in a massive chuck of his money being taken away from him over 50 years, whether you stick with this fund temporarily or not.

[Mark]

Hes a salesman. What is a patomic model anyway. I could.make up a list of the 30 most target funds on the market. Literally none of that means anything.

Why give someone 1.6% (aum)(very expensive).

There are so many red flags here. U can do the better urself and pay 0.0%

[Christine]

Invest it yourself
It’s easier to pick index funds, ETFs and whatever you want to put in that ROTH

Just look at the historic performance and expense ratio
Ask all the questions here

Folks are helpful and will tell you what is working or has worked for them

Definitely pick the most aggressive but have some solid funds that steadily perform even when the market is slow

[Lorenzo]

1.6? Why not just DIY the investment? Especially into fund!?

Can put into SP500 or high yield?

[Joe]

Being under 18 can or will he join your son’s account under yours?
Depending on your assets they manage the fee may be much lower.

We do this with some custodial accounts.

[Jessica]

Hope you help him to set up Roth IRA not traditional IRA (just double check)

[Joe]

Is there a reason why you chose 1099 vs w2? I personally did not choose 1099 because they would need to pay self employment taxes.

[Jules]

Go for the Roth IRA acct..
fidelity is good.. so are the others..
Find a fund or etf

Total stock market or similar
S&P 500 fund and invest in weekly or monthly
TIL you max out

Look at
FZIPX
FZROX
SPLG

Just a few.
He has plenty of of time and will do well

[Author]

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