他今年放弃了学校Financial Aid Package里面的work/study机会,估计不会再有paycheck了。玉米地干了五个礼拜，挣了差不多1800; 跆拳道教课，最后一个月加上帮师傅油漆整理场馆， 多给了两百， 总共有1300。今年挣的总数是3100。加上前几年挣的，账户上六千不到。开学拿走了5000，余下的还保留在他和我的共同账户上。我给他说，共同账户保留到明年夏天吧--万一明年夏天找不到专业对口的summer intern, 还去玉米地打工的话，这个账户还有用。

这个3100将拿到我的dollar-to-dollar match， 也就是我再给他3100块。有言在先，大学零花钱该他自己挣，所以，这笔钱不能用做零花钱，只能存起来， 说好放进他的退休账户。今天研究了一下Roth IRA的条例，2018年开始的新税法，应该没有改变这个方面的规定，儿子可以全部放进Roth IRA账户。今年每个 income earner应该有12000的Standard Deduction, 他这个3100也就不用交联邦所得税了（州税可能还得补交）, 放进Roth IRA, 到60岁后拿出来，无论多少，都不用交税。

下面是我找来引导儿子理财的文章。等他寒假回来，让他读读。现在可以开始从简单地挣钱存钱消费延伸到税收和投资了。

(ZT from: https://www.goodfinancialcents.com/investing-college-students/ )

A GFC reader recognized the importance of college students investing money, and asked the following question:

”Hi Jeff. What is the best investment advice I can give my 2 college kids? They are still in school (grad students) but work making just under a couple hundred bucks a week. Both are pursuing doctorates so loans are going to be quite large. What is the best investment plan they can start now? Also, regarding Roth IRA, can you have more than 1 and is $1000 the max initial investment? Thanks.”

I love questions like this, because they take us in directions that we never expect to go – and that’s usually exactly where we need to go. The more I got to thinking about this question, the more important I came to realize the topic is.

It’s not always possible for college students to begin investing because of finances, the question of how to make money in college can be hard. But for those who do, it’s actually a brilliant strategy on a number of fronts.

Why Should a College Student Invest – Why Not Wait Until After Graduation?

Though we normally think of investing as an activity that can and usually should wait until after graduation, I was able to think of several compelling reasons for starting in college:

• The student will graduate from college, already having investment experience.
• The student will graduate from college, and already have at least a small investment nest egg – the future time value of that investment can be enormous.
• The student will cross an important “adult” threshold – investing – earlier in life than most.
• Real world lessons will be learned in the process of investing that could never be learned by reading books, visiting websites, or even watching “how to” videos.
• Just getting started is often the single biggest hurdle for a new investor, and if you begin while still in school you’ll have already cleared it.
• If you can save and invest while still in school, and on a very limited income, think what you can do after graduating when you’ll have a full-time income?

The student who gains experience investing in college – even at a very low level – will have a big advantage over those who haven’t.

And if investing continues after college, the student will ultimately have an even bigger advantage over their peers, who might wait several years after graduation to begin.

How to Invest For College Students

The single biggest step for how to invest for college students is carving out at least a small space for savings in a very limited budget. That means investing is actually a two-step process – saving money, and then investing it.

Since the reader’s two kids are making “just under a couple hundred bucks a week” it will admittedly be a tight squeeze.

And that’s better than a lot of people who are already working full-time jobs.

Just as important, saving even a small amount is better than nothing at all. Since the kids are still in school, their educations are and should be their main priorities. Being able to save and invest is a bonus, and one that will pay big dividends after they graduate.

As to what to invest in? Stocks! As a young person very early in life, you should invest in growth. Capital preservation will become more important later in life, but as a college student, you don’t have much capital to preserve. The emphasis needs to be getting to the point where that’s necessary, and that’s best accomplished with stocks.

That doesn’t mean individual stocks necessarily, but you could also invest in low-cost, index-based exchange traded funds (ETFs) which hold stocks.

Managed Investments vs. Self-directed Investing

Next to committing to saving money for investments, the next biggest decision is deciding whether you want to go with a managed investment account, or self-directed investing.

Managed investing is just what the name implies, turning your money over to a manager who handles all of the details of investment management for you. This includes everything from creating a portfolio allocation, to choosing the specific investments, and rebalancing the portfolio as necessary. The only thing you need to do with a managed investment account is fund it – everything else is handled for you.

Self-directed investing. This is do-it-yourself investing (DIY), where you not only fund your account, but you also handle all of the investing details. You create your own portfolio allocation, research and choose specific investments, and then decide when to buy and sell them.

In between, you also rebalance your account as necessary to preserve the desired allocations between investment classes, like stocks in fixed income investments. You can do self-directed investing through popular discount investment brokers (see list below).

For college students, I think managed investing is the best choice. Since you are primarily focused on your education, it’s just a matter of turning your money over to a manager who will handle it all for you.

There are different ways you can take advantage of managed investing. The simplest is to just invest in mutual funds. You can do this by investing with a specific fund family, such as the Fidelity Funds or Vanguard, or you can open up an investment brokerage account, and purchase mutual funds through that account.

The other alternative is to invest through fully managed platforms, commonly known as robo-advisors. These are automated online investment management services, which are particularly designed for small investors. You turn your money over to the platform, and they determine an investment portfolio for you, based on a computer algorithm. As you put money into your account, it’s automatically invested according to the target allocation. The platform also handles all of the rebalancing as necessary.

Between the two managed options – mutual funds and robo-advisors – robo-advisors will be the better choice for college students. Mutual fund families typically require large minimum initial investments, of at least $1,000, but more often several thousand. Several robo-advisor accounts can be opened with no money at all (see list below).

Where to Invest With Small Amounts of Money

If you’re interested in self-directed investing, there are several popular investment brokerage firms that will allow you to open an account with no money whatsoever. However, you won’t be able to begin investing until you accumulate at least a few hundred dollars.

Here is a list of some of the most popular discount investment brokerages:

• TD Ameritrade
• OptionsHouse (to be E*TRADE as of August 6, 2017)
• Merrill Edge
• Ally Invest
• Capital One

If you would prefer to use a robo-advisor to handle all of the investment management for you, here is a list of platforms that also have a zero minimum initial deposit requirement:

• Betterment
• Wealthfront
• Motif
• M1 Finance
• Wealthsimple
• WiseBanyan

Betterment is a particularly popular robo-advisor choice. In fact, it’s the largest independent robo-advisor, and one that continually innovates its product offering. You can open up your account with no money at all, and then make periodic contributions. As money flows into the account, it will be automatically invested. It’s virtually a worry-free investment platform. Perfect for college students who have schoolwork to worry about!

The Best Advice on Investing to Give to a College Student

Simply put: Invest, and NEVER stop! That’s the advice I’m giving to this reader to pass on to his kids in college.

As much as anything else, investing is a habit. We all know there are good habits and bad habits, and investing is one of the goodest of the good. The earlier the investing habit is developed, the better. That means the college years are actually an excellent time to begin creating the habit.

In fact, from a financial standpoint, investing may be the best habit to develop, next to staying out of debt. But even then, only maybe!

And debt brings up another important point. The reader indicates both of his kids, being in graduate school, are accumulating “loans (that) are going to be quite large”. When it comes to student loans, we’re talking about unsecured debt. That means while student loans may be the size of a mortgage, there’s no property securing the debt that could be sold to make it go away.

Investments may be the next best alternative. Sure, by the time the reader’s kids get out of school, they won’t have nearly as much money in their investments as they will have in student loan debt. But as the years go by, and their student loan debts gradually declining due to amortization, their investments will increase in value. At some point in the future, their investment portfolios may rise to a level where the money can be used to pay off the student loans.

That creates a situation in which very large student loan debts – that might take 20 years to pay off – could be paid off in 10 years or less.

”…Roth IRA, can you have more than 1 and is $1000 the max initial investment?”

This is the reader’s last question, and I want to address it because it’s an opportunity to point out the unique advantages of a Roth IRA specifically for college students.

To answer the reader’s question directly, yes, you can have more than one Roth IRA. And $1,000 is not the maximum initial investment. A college student – or anyone else – can invest as much as $5,500 per year in a Roth IRA (or $6,500 if you’re 50 or older).

But let me get back to the advantages of a Roth IRA for a college student. I actually think a Roth IRA is one of the best investments for college students, and for young people in general.

Here’s why:

• Since the contribution isn’t tax-deductible, it can be withdrawn from the account at any time, without either an income tax liability or an early withdrawal penalty. Should the student need access to the money early, he or she can always get it.
• The money in a Roth IRA accumulates on a tax-deferred basis. This enables a faster accumulation of investment earnings in the account.
• A Roth IRA is a retirement account, so by starting while you’re still in school, you have a big advantage when you get out and start working, and begin making contributions to an employer plan. The Roth IRA will be a big head start on what will be the biggest savings mission in your life.

The reader didn’t specifically ask for this information, but I think the Roth IRA is such a good investment for college students, that it’s worth starting one if you’re thinking about investing in general.

（二0一八年八月三十日）