My 21 year old, hard working, college student wants to invest around $5000. Where and what should he invest in? Should he go to a financial advisor? Thanks
Welcome @Kenda_Cecil!
I normally start by making sure college students are focusing on a good degree, minimizing debt, getting an in demand career, and having enough cash to handle all that uncertainty in their life until they’re stabilized with a job. Since you’re the mom, hopefully you’re pushing on that already?!
That said, no, I definitely would not take $5,000 to a financial advisor. Financial advisors simply have no way to make a honest income from such a small investment. So the good ones will meet with you for free and send you on your way. The bad ones will shake you down (without you realizing it most likely).
I’d probably send your college student to go open a Roth IRA with Vanguard or Betterment. It’s pretty easy to DIY. Vanguard is the creator of the index fund and seems to be the most altruistic in their business model. Betterment is a more modern “robo advisor” with, in my opinion, a much easier site to use. I suspect your college student will share that opinion.
Also, it’s important to understand what and why you’re doing it… if not, a young investor can make common mistakes (like selling during a downturn, picking stocks, chasing past performance, forgetting to invest contributions, etc, etc). The Simple Path to Wealth is an easy to read, altruistic book that does a great job walking through the important stuff.
That said, here’s a post on walking through the steps on how to open a Vanguard account. A Betterment account is so easy I don’t think it even requires a how-to post.