Is it smart to invest your money in mutual funds?

Question

I will like to know how I can teach my teen son to invest his money on somekind of mutual fund. How does this work?

Answer 1

If you don't know anything about mutual funds and/or the stock market, you'd be best to stay away from it during this Bear Market until you know what you are doing.

Answer 2

This is an interesting question.  I take it that you yourself do not invest in mutual funds.  Why not?  It is sort of difficult to teach your son to do something that you yourself do not do. His obvious question is going to be, "If it is so smart, why aren't you doing it?"

Maybe you two should do it together.  Until he is 18 he can not on his own invest.  But you can open an account for him under the uniform gift to minors law.  T Rowe Price has some very good mutual funds and you can set up an automatic monthly investment in one or more of these with a $50 minimum investment.  Why don't you set up one for each of you and tell him that you will match his contribution dollar for dollar but he has to leave it in the fund for a minimum of 5 years.

http://mutualfunds.troweprice.com/?rfpgi...

Answer 3

As opposed to what? How can you teach your son to invest if you don't know yourself? How old is he? Teach him about saving and the wonder of compound interest! Teach him how to use money wisely and not be ruled by money.Teach him how o think for himself and not rely solely on so called experts. Teach him some basics first, then maybe he will find out himself about whether mutual funds are a smart investment.

Answer 4

Absolutely.

Contact the Vanguard Group. They have a whole line of mutual funds. It would be best to start out with a money market mutual fund. It works just like a checking account but with some limits (like checks must be $250 minimum). They provide 5% or so interest right now and you receive the dividend monthly.... so you can watch the money grow.