Questions about Custodial accounts and encouraging kiddo to investing start now

I want to convince my kiddo, she’s 15, about the magic of compound interest and the importance of making small, consistent contributions early on. I was trying to explain it to her on the ride to school this morning, not sure how well I held her attention. She did seem interested in the notion that she could become wealthy in the future just by starting to put relatively small amounts in the right places consistently over time. I wish I knew then what I know now. If I started contributing at that age it could be a whole different ball game. Sadly, I didn't really start until later in life and now have a much shorter time horizon. Don’t get me wrong, I’ll be ok, but I want her to have a crack at really being set later in life, she has the time.

I guess I have a few questions. One, any ideas on something I could give her to read that is easy to grab onto? I could try to have her read Collins Simple Path to Wealth or something similar but I don’t know that she would get through it. I was thinking maybe I just whip out a compound interest calculator on my phone and run some numbers. I’m open to ways to present it that is easy to grasp and that will have an impact. 

Finally, if I wanted to open up a custodial account, what’s the play here? Am I looking to start a Custodial Roth IRA? Open to suggestions… Thx!

Posted Nov 12, 2024, 8:14 PM UTC

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