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mcjon3z

Investing for kids

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With me working from home for the past couple of weeks and having my eTrade account up on my laptop with my 8-year old running around, the kid has taken an interest in the stock market. I guess he thinks the black screen with red and green numbers looks cool. He found the stocks app on his iPad and came in to show me that "he was on the stock market, too."

 

I'm thinking this may be a good opportunity to get him to play with some trades on his own - buy some Disney or other companies that he is familiar with and watch what they do. Possibly either a real RobinHood account or a paper trading account through TOS. My hesitation with TOS is that, when I played around with it a couple years ago (without a TDA account), the signup process was cryptic and there was no option that I could find to reset your account credentials.

 

My personal accounts are with eTrade and I don't know that it would be the best idea to co-mingle the 2 at the same broker since it is all going to be tied to the same online login credentials.

 

Anybody done something like this with their kids and any observations or recommendations?

Edited by mcjon3z
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28 minutes ago, mcjon3z said:

With me working from home for the past couple of weeks and having my eTrade account up on my laptop with my 8-year old running around, the kid has taken an interest in the stock market. I guess he thinks the black screen with red and green numbers looks cool. He found the stocks app on his iPad and came in to show me that "he was on the stock market, too."

  

I'm thinking this may be a good opportunity to get him to play with some trades on his own - buy some Disney or other companies that he is familiar with and watch what they do. Possibly either a real RobinHood account or a paper trading account through TOS. My hesitation with TOS is that, when I played around with it a couple years ago (without a TDA account), the signup process was cryptic and there was no option that I could find to reset your account credentials.

  

My personal accounts are with eTrade and I don't know that it would be the best idea to co-mingle the 2 at the same broker since it is all going to be tied to the same online login credentials.

 

Anybody done something like this with their kids and any observations or recommendations?

I mean I wouldn't let your son have a a real account though...

 

Don't really see any added benefit for letting a child play with stocks but if he enjoys it then a paper trade would be ok I guess, at least make sure he for sure can't make any real trades.

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1 minute ago, Bull3t007 said:

I mean I wouldn't let your son have a a real account though...

 

Don't really see any added benefit for letting a child play with stocks but if he enjoys it then a paper trade would be ok I guess, at least make sure he for sure can't make any real trades.

If it were a real account, i'm not talking about any real money - stick $100 in it and let him see what it does. I wouldn't give him direct access without me present, just don't want him to see my other account balances in the UI which was my only concern about having it in the same brokerage with my real accounts.

eTrade has paper accounts that can be accessed through the Power platform - i could just use that, but I think it would hold his interest better if it was actually real money in there.

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@mcjon3z Take a look at M1.   I don't know a ton about it, but I know you can buy fractional shares with zero commissions, and I've heard a lot of people use if for the kids to dip their toes in investing.   You can have a low dollar amount to fund the account and then purchase fractional shares of whatever stock they are interested in.

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I'll echo Yowster's sentiment that you seek out a broker that offers:  1) Fractional shares.  There's not much you can trade for $100 these days.   2) Low commissions.  Esp if your child is trading (as opposed to investing). 

   I think it's great to get kids involved in dealing with money.  It is an aspect of adult life that our educational systems tend to ignore.  I sincerely advocate giving them ownership -  putting the $$$ in their hands directly - I think it's the best way to learn.    Best of luck, and have fun.

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@Yowster, @skydragon - Thanks for the input. The fractional shares thing makes sense. I was also looking at Robinhood because of this. Seems like they have some hidden fees, particularly the $75 transfer out fee. I have to get clarification if this applies to cash transfers or only security transfers. 
 

We started him a savings account that he has been putting money in since he was 2 and we match his deposits. Plan to make him buy his first car with it (my parents did same for me). I may offer him the same match deal to put a little money in the market. 
 

My wife and I are both CPAs so teaching finance at an early age is a big deal to us. You can imagine what we see in our industry as far as the impact of financial ignorance. 

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