If he’s still in school, I can see why he’d want to keep funds accessible. It’s still good that he reads the info. But in his case perhaps a short term CD would be ok. When he graduates, he’ll need startup savings a bunch of money if he rents an apartment (1st month, last month, damage deposit … and if Boston, perhaps 1/2 month real estate commission).
Literally, showing him how much $x is likely to be worth when he’s 60 if he puts it in a Roth account invested in a reasonable index fund, even if it loses money some years, and that he won’t have to pay tax when he takes it out.
There’s a PDF online of “If You Can: How Millenials Can Get Rich Slowly” by William Bernstein (just Google it and you’ll find it easily). It’s free and only 16 pages. Well worth it!
If he’s 20 and is just not ready to invest, it means he’s heard your advice and isn’t ready.
That’s okay. He’s only 20. I would be wary of pressuring him to invest. Give him the information and let him invest when he’s ready.
If his Roth is at one of the major brokerages, he will have access to all the info he needs when he’s ready, and they will email him over and over. They might even call him. That’s enough.
My advice was more for a teen. The account I was referring to is for teens, not adults.
Learning how to invest is important. But more important is learning how to save, not spend. Since OP’s kid is young and does have extra funds, that’s a good thing
I’ve been thinking about this thread a little.
I would be happy if my kid still in college was saving money anywhere. I wouldn’t worry about actually investing.
One of my kids has a business degree and started investing in college. Another did, only bc I funded Roth for amount earned over the summer (or so thing like that), and just said put it in target retirement date fund.
When I start encouraging young adults to invest is when they get their first real jobs, especially if they have a chance for investment matching. I tell anyone who will listen to invest at least as much as the company matches, bc there aren’t many places you will get a 100% return on investment.
The Wealthy Barber
https://www.amazon.com/Wealthy-Barber-Updated-3rd-Commonsense/dp/0761513116
is an easy read with basic principles.
If You Can is another easy read and very affordable.