<p>My 16 year old has earned some money that he wants to try investing. Year's ago I worked in the industry but so much has changed that I don't know where to direct him. I am assuming something online hopefully that doesn't charge commission. He is planning on doing his on research. Any advice would be appreciated.</p>
<p>Direct him to a good growth low fee mutual fund. Boring but the best bet in the long run. Good lesson to learn early too.</p>
<p>Barrons
This isn't for long term investment of his money. He is looking for a challenge with some risk. The money he is using was won at the poker table. The brokerage account is an attempt at finding another high stimulus activity to replace the poker.
It is not money that he has set aside for his future.</p>
<p>As long as he can afford to lose it, then set up an account for him at a low-fee shop. I think you need to be 18 to trade on your own acct.
I was speaking from sad experience at 18. Luckily my parents made me whole as $500 was a lot back then. I never bought stocks directly again.</p>
<p>I suggested he donate the poker proceeds to charity! But he didn't go for that one.</p>
<p>If a 16-year-old is winning enough money at the poker table, I'm personally kind of shocked. Who on earth is he winning it from? How do you win enough to invest in a friendly game, which is all a 16-y-o should be playing, in the opinion of this old fogey. Were the others all 18 and earning their own money? Is poker playing for $$ legal in your state? Is it legal at age 16 in your state?</p>
<p>Mom60, my 17 year-old son also invested his poker winnings in stocks. </p>
<p>You will have to open a custodial account (A parent's name and your son's name). When he is 18, you drop out and the account is just your son's.
He can definitely invest online and it is a great learning experience. </p>
<p>Scottrade advertises on this site with a small banner ad. I would look at them. Also Fidelity, E-Trade and Ameritrade. Maybe Schwab, but I think they are more expensive. </p>
<p>You need about $500 to open an account. </p>
<p>Make sure and look at the commisions charged and account fees. Sometimes the fees add up. If his account gets into 5 figures than you also have to look at interest paid on cash balances. </p>
<p>You can learn a lot playing poker. Bill Gates spent a lot of time playing poker at Harvard before he dropped out.</p>
<p>GW Bush was one of the best poker players at Harvard Business School. You sure can learn a lot.</p>
<p>if you want to open a trading account, for spec trading with rapid realtime execution, I would take a look at interactivebrokers (website). Not sure if you can open a joint account or not.</p>
<p>A good site to learn about investing philosophy, including when to sell your stocks, is <a href="http://www.exitpoint.com%5B/url%5D">www.exitpoint.com</a>. The site provides free access to follow a limited number of stocks and is very user-friendly.</p>
<p>FWIW, Scottrade offers lower brokerage fees and is really great for mutual funds - LOTS of no/load, no/fee funds to choose from. Ameritrade's commissions are slightly higher, but their site is much more user-friendly and has better features for frequent trades -- so if the idea is for a kid to play around with trading low-value stocks, it might be a better choice.</p>
<p>dmd77 -- I agree wholeheartedly! How can it be legal for a 16 year to gamble?</p>
<p>That sounds great that your son wants to run his own stock portfolio it's really a great idea. my father allowed me to set up my own stock portfolio and so far as i understand in order to have it work, you must register for an account as your son's guardian. You cannot legally transfer the account to your son until he turns 18 but if you give him the username and password there shouldn't be anything standing in his way</p>
<p>Gambling at 16 or 17?....wow !!!! (and with parent encouragement - wow wow).</p>
<p>As long as we are being sanctimonious, I would caution that converting cash winnings (on which income tax is owed) into brokerage account investment is going to look a lot like money laundering.</p>
<p>That assumes you make enough to tax.</p>
<p>oh for godsake...seriously the kid probably plays every weekend with his friends and just accrued a nice little bundle. You guys make it seem like these kids are playing five hundred dollar pots each night. High school kids play poker a lot now, especially after espn started airing the world championship stuff. It's not that uncommon at prom, parties, and the lunch table. We play all the time, for pocket change usually...but a bunch of pocket change in a month from a lot of small games comes out to a hundred or so extra bucks.</p>
<p>Anyway...I would recommend Scottrade....it's cheap and its what my rents set up for me.</p>
<p>It is not a huge amount and it is from playing over 2 summers with friends. We actually no longer allow him to play and all of the playing was done without our permission at friends houses. The money is not enough to open an account with most companies. Scottrade looks like it fits the bill.</p>
<p>i was trying to figure out why this thread makes me so uncomfortable. It's partly the idea of a 16-year-old gambling for money (even if poker is on TV, so is sex, and that isn't such a good idea at 16 either). Mostly, though, I think it's the smell of privilege. Who can afford to gamble? There's another thread going about rich kids vs. poor kids in which the poor kids point out that the rich kids don't seem to realize how little money they have--I find myself wondering if some of mom60's son's friends lost money they couldn't afford to lose.</p>
<p>(As for Bill Gates playing at Harvard, I have friends who were in the same dorm with him; he was notorious at the time for being extremely skilled and extremely lucky; at MIT, we were warned not to go up against him. "There's this kid from Seattle--watch out for him" was the warning given to the friend of mine who used poker winnings to fund his MIT degrees. (He also played pool with great skill.))</p>
<p>Investing without knowledge is dangerous. Investing with knowledge is even more dangerous. </p>
<p>1999 our son (16) acquired $10K. His college funding was achieved at that time. We allowed a UGTMA brokerage account. Year 2000 that account was worth ~5k. By year end 2002, his college funding was very severely in the red. Although his college funding has recovered, just this past week, gyrations in the markets can cause bad heartburns, even in "conservative" investments.</p>
<p>Even very large financial institutions have a very difficult time in the financial markets.</p>
<p>I would guess that controlled poker is even safer than the security markets.</p>