High School Teenagers Investing

I teach a personal finance class to high school kids.

So far, this school year, nearly 40 percent of my high school students have opened investment portfolios of their own.  Most have opened custodial accounts, under their parents’ names.

When these kids turn eighteen, the assets will be transferred to the students, and the account will be solely theirs.

Here are some online tutorials my students created.  Each of them has invested real money, in real accounts, and they want to show you how they did it:

Sixteen year old American, Chase Schachenman, builds a Custodial Investment Account through Vanguard.

Eighteen year old American, Kevin Wang, builds a Non Custodial Investment Account with Vanguard.

Sixteen year old Angeline Elopre and Seventeen year old Joo Yeon Oh demonstrate how young Singaporeans could invest.

Seventeen year old Anika Murarka builds a portfolio through Vanguard.

I’m proud of these students, and I will be adding more student-created (real money!) tutorials over the next couple of weeks.





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

43 Responses

  1. Barry says:

    I wonder if you can open such custodial accounts in Australia for the kids and without succumbing to high taxes

  2. Katy Kaestner says:

    I read your book after you came and spoke to my class last fall at SAS, and have since started my own portfolio, consisting of about 2/5 in a total stock market index fund, 2/5 in a mutual fund and 1/5 in a short-term bond. It's been great to be able to watch the change over the past year, and I'm really glad I was able to get an early start! I think it's really important that you've made a legitimate attempt to impress the importance of investing to the younger generation, and I hope that more of us are able to put your advice into action!

    • Katy, you rock!! I'm so excited to hear that you have started investing money at such a young age. The markets have also risen a lot lately. When they fall ( stocks markets rise roughly 66% of the time, and fall roughly 34% of the time) remember that falling markets are great for young investors. You'll be able to buy more diversified businesses (via your index funds) at lower prices. If you can save diligently, be dispassionate about market movements, and stick to your long term plan, you are going to be very wealthy. And because you started so young, you'll be able to save less than many of your friends, over your lifetime, but still end up with so much more money. See what you can do to teach your friends about this stuff. And thanks for posting the comment on my blog Katy!

  3. Scott says:

    Andrew,

    I have pre-teen children, do you recommend opening custodial accounts for them if I am wanting to start a small monthly investment for them? Or how would you do something like that?

    Thanks in advance,

    Scott

  4. Daniel says:

    They are very fortunate! When I was in school not one teacher mentioned anything about investing or managing savings. I think it was because all the teachers have really good teachers pension plans and so never invested anything themselves.

  5. Linda says:

    I read Millionaire Teacher a few months ago and really enjoyed it. I’m planning to start a small portfolio for my son, a 23 year old university student. I hope he can learn the process and I can also be an authorized trader on the account. We’re in Canada and I planned to follow your advice on page 112 for percentages with the funds XIU, XBB, XIN and XSP (all on TSX) suggested on page 114. Reading online I notice that you’re using some different funds now e.g. XSB for bonds instead of XBB, Vanguard, etc. What is your current advice?

  6. Linda says:

    Thanks for the advice Andrew. From what I read in the Globe article, as well as VSB that you mention above for bonds I should be looking at VCN for the Canadian market, VUN for U.S., and VEF for international. If I don’t have the correct symbols please advise.
    Linda

  7. Linda says:

    Further to my comment above I’ve done a little more reading. Did you mean VEF or VDU for the international fund?

    • Neither Linda,

      VUN is the U.S. non-hedged total stock market index. Always go with a total market index whenever possible, and a non-hedged one at that. The two you mentioned above are dividend appreciation indexes, and one is hedged.

      Cheers,
      Andrew

  8. Linda says:

    Right, thanks. What is the symbol for the international market index you are suggesting to consider instead of XIN?

  9. Michael says:

    I got millionaire teacher as a present from my mom and just absolutely loved it. Hi, I’m a Canadian teenager and just needed some advice. I plan to start my own account in TD bank once i turn 18 and just wanted to ask for some advice about Td bank because many people have been having problems getting a TD account and I just wanted to get your thoughts. Another follow-up question is that is creating an account in vanguard similar to creating an account in TD, if so which is better. Thank you so much, your book was the first simple book on investing I have read so far and really got me to understanding investing, and I feel more prepared than ever because of it.

  10. Michael says:

    So does Scotia bank’s ETF’s have lower charges compared to TD banks e-series funds, or is TD the way to go. Also once I open my account could you verify if the stocks, XIN, XIC, XSP, and XBB are the right indexes to invest in for a Canadian? I also thought about investing with 60% bonds and 40% stock indexes because the markets are performing very well and I plan to wait out the next economic fall and then shift my portfolio to 60% stock indexes and 40% bonds. Is this method a sound method or would you say that this method is not safe. Thank you so much for being so accessible, I feel like I’m asking you to spoon feed me but I just really want to be prepared.

    Again thank you so much, Michael.

  11. Simon Lea says:

    Hello Mr Hallam, I came across your book a while back and it has given me purpose and a direction in my goal to achieve financial freedom.

    I am a 18 year old Singaporean student in Ngee Ann Polytechnic and I am about to jump into index funds. From information on your website, I set up an account with Fund Super Mart and as I am not classified as a knowledgable investor, I had to inform a Client Investment Specialist on the trades I’d like to do for the specialist to judge and advise.

    I told him I’d like to put 50% of my portfolio in the Infinity Global Stock Index and 50% in the DWS Singapore Eqty Fund.
    The advisor told me I should place 50% in a Aberdeen Pacific Equity instead of the Singapore fund.

    I would appreciate it if I could get your input on his advise. Is it better to place half of my portfolio on a regional equity fund or am I better off in the long run placing it in a Singapore equity fund.

    Thank you, and I hope your book reaches more people my age to give them the education they never but should have gotten in school.

    Simon Lea

  12. Michael Agyei says:

    Hi Andrew, I have been browsing your blog for some time and I am keenly interested to invest for my future. I am living in the UK and i am a student, what will be the best way to make an investment?

  13. Jaz says:

    Hello Andrew,
    I am Jaz. I’m 15 years old and heard about your book and my mum has read it. I have a small business of my own and am really interested in putting money away each month like suggested, because at the moment it just sits there not doing anything. I was wondering if my mum and I would be able to meet you to talk about how to go about investing both mine and her money for the future? Do you have a fee you charge for your advice?
    Thank you!

  14. Sam says:

    Hi Andrew,

    I have read your book and I have a quick question about Canadian investments. You mention that TD index funds are the way to go and I have been researching that a bit but I am unsure if I need a TD account in order to do that. I am an RBC member.

    Very good book!

    Cheers

  15. Katie C says:

    Dear Andrew,

    I am a 24-year-old English teacher in NYC and I recently read your book, “The Millionaire Teacher.” I thoroughly enjoyed the read. I have finally saved up the minimum amount ($3,000) to open a Vanguard account, but I’m having trouble because using Vanguard, each allocation requires a minimum of $3,000.

    Following your advice in the book, my ideal allocation would be:
    24% in Vanguard U.S. Bond Index
    38% in Vanguard Total U.S. Stock Market Index
    38% in Vanguard Total International Stock Market Index

    However, each one requires a minimum of $3,000 invested (thus, I could only do all three if I had $9,000 to invest at this time, and I could only do my preferred ratio if I had ~$12,000!). I imagine that other young investors are in a similar boat. What would you recommend, given the current markets? My initial impulse was to put the $3,000 I have into a Vanguard Total U.S. Stock Market Index, since I am young and should opt for greater risk/greater possibility of reward at this time. Then, over the next few years, I can put other money I save into the U.S. Bond Index, and my final move, down the line, could be to balance out my Stock Market Indices between U.S. and International. But given how strong the stock market is at the moment, I’m not sure what to do! Do I really want to put my $3,000 into a stock market index fund when stocks are at an all-time high?

    Let me know what you would advise. Thank you very much.

    • Hi Katie,

      I’m glad you read the book. At such a young age, this is especially great news. Your initial thoughts (minus your fears) are exactly what you should do:

      “My initial impulse was to put the $3,000 I have into a Vanguard Total U.S. Stock Market Index, since I am young and should opt for greater risk/greater possibility of reward at this time. Then, over the next few years, I can put other money I save into the U.S. Bond Index, and my final move, down the line, could be to balance out my Stock Market Indices between U.S. and International. But given how strong the stock market is at the moment, I’m not sure what to do!”

      Never speculate about the height or direction of the stock market Katie. It’s always hitting new highs. That’s what it has done for 200 years. Two out of every three years, the market rises. So new highs, of course, always get hit. If you were shy about them, you would be petrified. More importantly, you have soooo much time. You are not selling next year. You are likely selling 40 years from now. The markets will most certainly be at an Everest like height, compared to the relative bunny hill level we have right now. This might help: http://assetbuilder.com/andrew_hallam/experts_say_stocks_are_going_to_crash%E2%80%94so_what_are_you_going_to_do_about_it

      Well done, Kaite, on starting so early!

  16. Katie C says:

    Thank you very much, Andrew!

  17. Edward Walker says:

    Hi Andrew,

    I am a 25 year old student in Australia, graduating in november/december of this year and hopefully moving into full time as a Nurse next year.

    I just read Millionare Teacher and am dying to start investing!

    I am thinking that an Aussie vanguard account would be the way to go, and thought that the life strategy with 10% income (indexed bonds) and 90% growth (indexed stock) would be best for my age. However I need the $5000 initial deposit to open one of these accounts.

    I can save around $500 a month scrimping hard, which is the minimum trade on the ASX where I could start buying into vanguard funds…I am very eager and having trouble deciding what to do…wait or start trading on the asx…

    I am also nervous by the word “hedged” used in some of the descriptions of the life strategy fund allocations….

    Would you wait to open an account or start trading?

    Also a dumb question but when you are balancing your portfolio is it balancing how many units you have bought in each section? or balancing how much each is worth?

    Cheers,
    Eddie

    • Hi Eddie,

      When rebalancing, you rebalance how much the entity is worth. Just a word about terminology though. You use the word “trading”. But what you should really use is “buying”. You are going to accumulate assets, not trade them. Brokerages want you to trade, of course, because they make more money when you do.

      Don’t worry about the word “hedged”. It’s just a way for the fund managers to smooth the fund’s returns with the Australian dollar. The only worry is the very slight extra cost that the hedged funds have. It’s an internal cost of doing business that you never see. So if you have the choice, pick a non-hedged product.

      If you are dying to get started, wait until you have at least $2000. Then, with that full amount, buy an Australian stock market index on the ASX. You will pay a commission to buy it. But the expense ration on the fund will be very low. Then, when you have another $2000 saved, by an international stock market index.

      In my latest book, The Global Expatriate’s Guide To Investing, I listed ETFs that Australians could use, and in the right combinations. http://bit.ly/globalexpat

      But you don’t need the book.

      Go to this link and scroll down until you get to the listed ETFs for an Australian portfolio. Remember, save up to buy an ETF. Then save another $2000 to buy the second one. Then keep saving! http://andrewhallam.com/2014/01/expat-index-investors-should-duck-u-s-estate-taxes/

      Cheers,
      Andrew

      • Eddie Walker says:

        Thanks for the quick reply and the help with the terminology….very new to this.

        Will take your advise and do the $2k at a time….

        After buying the second one (international stock index) would you then do the next $2k on a bond index and then keep cycling that way and balance once a year?

        Finally just to be really annoying would you recommend diverting your super into something like this as an Aussie?

        Thanks again!

        Eddie

        • Hi Eddie,

          After buying the international index, then you could add the bond ETF. Then keep going.

          As for your superannuation, yes, try to do the same thing.

          Cheers,
          Andrew

  18. Liz Hung says:

    Hi Andrew,
    I’m a 19 year old freshman in Taiwan. I’ve just read Millionaire Teacher today, and feeling like should start investing as soon as possible. However, there are few index funds to choose in my country. Surfing the net, it seems like most of the index fund investors in Taiwan would rather put their money in U.S. stock market. What could a college student do to start investing with little money in such condition?Would you please give me some advice? Thank you so much.

  19. Andrew says:

    Hi Andrew,

    I am Andrew Ong from Singapore, currently waiting for university to start this year. After reading your website, I have decided to invest all my 20k savings into:

    20% SG Bond Fund
    40% STI ETF
    20% VTI
    20% VEA

    Would this be wise? Going in with 20k all at once? And is rebalancing the portfolio, 2 or 3 times a year, all that is needed to maintain a sustainable, long-term return?

    Thanks!

    • Hi Andrew,

      You will always have bad years. Sometimes, you’ll lose money for 2-3 years in a row. But the idea behind this portfolio is a good one. Over time, you would make plenty of money. That said, you would need to choose some different ETFs to avoid U.S. estate taxes. This article will clear that up: http://andrewhallam.com/2014/01/expat-index-investors-should-duck-u-s-estate-taxes/

      Also, you will learn, in much more detail, how this all works in my book. Here’s the link. I realize that you are not an expat. But every part of this book works well for you as well. Oh, one thing. If you are Singaporean, you won’t need bonds. You can afford to have an all equity portfolio because you’ll have CPF (which is a lot like a bond). Here’s link: http://bit.ly/globalexpat

      You can also find the book at Kinokunyia, in Singapore.

      Cheers,
      Andrew

      • Andrew says:

        Hi Andrew,

        Oh ok, so after reading the article, what I gathered is I cant buy the VTI and VEA of AMEX, a US index, but from another index, such as the Canadian, Australian or British one, is that correct?

        So I can still invest in VTI and VEA but they have to be on another non-US exchange? Is there any difference for Singaporeans to invest in the Canadian market, VS say the Australian or British market?

        Or I cant invest in the VTI and VEA at all, and must find their parallels in the other markets? Such as VCN or VUN in the Canadian market?

        Thanks!
        Andrew

        • Andrew, go with the Canadian listed ETF equivalents. Low costs and no stamp duty.

          Cheers,
          Andrew

          • Andrew says:

            Hi Andrew,

            Ok so as a non-US citizen, there is no way to directly invest in VTI and VEA, or any US-based index funds for that matter? Without putting ourselves at risk of the 60k limit US estate tax laws?

            The best alternative we can do is to invest in parallels of these index funds in non-US markets? Such as the Canadian or UK market?

            Thank you so much!
            Andrew

  20. John says:

    Hi Andrew,

    I have read Millionaire Teacher and loved it. As a Canadian, how would I actually go about investing and physically putting my money into different stocks and bonds?

    You’re great!!

    John

    • Hi John,

      It depends on what you want. If you want to deposit small regular sums, commission free, and have the dividends reinvested, you could follow the model on page 111, table 6.4 after opening up a TD Waterhouse account. Phone TD or follow their online instructions to open the account, whether it’s a RRSP or otherwise. This portfolio is made up of TD’s e-Series index funds.

      If you want to build a portfolio of ETFs, you could do so by opening a discount brokerage account (TD Waterhouse; RBC Action Direct etc) and follow the portfolio that’s demonstrated on page 109, table 6.3. But replace XIN with VDU.

      Cheers,
      Andrew

  21. Ben says:

    Hey Andrew,

    I notice that you are not mentioning Vickers anymore. Did anything change that makes them not interesting anymore? I am currently using their platform. thanks!

    • Rob says:

      Hi yeah, I was wondering this too as they seem to come across very favourably in the book. Perhaps it would be good to produce a page on this site which has the latest details on the main options as it seems to change frequently.

      • Rob and Ben,

        Nothing about DBS Vickers has changed. They are still a good brokerage. But TD Direct International has lowered their costs. To keep up, DBS Vickers may one day do the same. That appears to be the trend with brokerages. None like to be left behind for long. That’s good news for everyone!

        Cheers,
        Andrew

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