Your Questions About Investing Tips For Kids

Mary asks…

Toyota 4runner questions… help?

I have a 1995 Toyota 4runner, 4WD, V6, and my wife and I absolutely love this vehicle. However we are at a crossroads with it, and it really breaks my heart. We have several issues that I hope we can get resolved.
First, we went to get 4 new tires and an alignment, the mechanic said that we needed to replace the left and right idler arms, and if we didn’t he couldn’t align it. To replace the parts the cost totaled a little over $850 plus new tires we were looking at about $1200. So we decided to wait until we did some research before continuing.
Then about a week after finding out that cost, I was driving on the interstate and the 4runner did not want to shift from 3rd to 4th, the RPM’s were about 4000. I thought maybe it was just cold and pulled over. Let it warm up a bit, then continued on. However this is happening more often. Around town no biggie highway though it’s becoming a concern. I checked the transmission fluid and could only see a small amount on the tip of the stick. Took it to a transmission shop and the mechanic said I’d be better off just going and getting a new vehicle. He told me what he “thought” was wrong with it and that it could run as much as $2400 to fix it. I thought it just needed to be flushed and filled, but nobody does this anymore.
Then tonight I looked under the 4runner and saw a small leak, it appears to be coming from the radiator, probably a pinhole leak in a hose. I called around and was told this could be as little as $340 to as much as $650 to fix.
We added up the total cost of all the repairs and it comes to just over $4000. So my question is, “Is this worth fixing?” We are not wealthy and we do NOT want to get into a monthly payment, a person would have to be crazy to do that nowadays! We are full time students with 3 kids and we have full time jobs. Car lots only want to finance people even if you tell them I have cash for the vehicle.
It’s only got 138,000 miles on it, and it runs like a damn champ. Is $4000 to much to invest into it or should we take this money and try and find something else?

John answers:

Check the bluebook appraisal on it.

Charles asks…

How can I improve my sports ability?

Ever since I was a little kid, sports has been a nightmare for me. I’ve ALWAYS felt humiliated by my lack of coordination, balance, and ability for simple things such as catching. No one laughs at me but I’m pretty sure they’re thinking what a dumb person I am in their heads. I want to improve my performance in sport, but my problem is that I don’t feel like I have enough time to invest in it and I come from a family that thinks sports time could be used as study time. Plus, I have very little motivation.

I’ve recently found a sport I actually enjoy, which is longboard skateboarding, and I want to progress at it in the summer. Any tips?

John answers:

Of course you can develop yourself.
You can start by running little distances. Slowly, increase the distances.
Then you can go for swimming too(if you are interested).
Or you can pick up any game like badminton , cricket etc.and start playing it.
Day by day you will definitely see a change in your personality ! ! ! !
So, go ahead and take the challenge. If you are worrying for studies don’t take too much tension.
Have fun and live your life.

Thomas asks…

Any helpful stock tips?

Im 15 and i would like to invest my money early. When is the best time to buy stocks? What are mutual funds? What are some stocks that are doing well right now (I can only spend up to $500) Are there any stock games for kids? Any tips? thanks 🙂

John answers:

Invest early, invest often.

I wish I had your mind at 15. I’d be doing pretty well right now. But Im only 23 so its not anything I cant recover from.

To answer your questions,

(1)The best time to buy stocks is when they are cheap, just like you would purchase anything else when theres a bargain to be had. If you invested in the stock market on Dec. 31, 2008, at the end of the first year of the Financial Crisis, you could have gained 26% and 15% in the following two years, all because you bought when stock prices rebounded. Of course, none of us know the future, so we cant time the market and get out before it goes down.

(2) Mutual funds are literally funds that are mutual. Ha Ha! An investment firm starts a fund and advertises it to investors, giving a positive gain prospectous to get people to add more and more money. They then invest the other peoples money into either one asset class or a few, and charge a fee for these services Thats what makes it mutual. I invest, you invest, we all make a profit. As you’ll learn, you should choose the mutual funds with the lowest costs

(3) Congrats! $500 is a great start. There are plenty of companies that have individual shares that can be bought for that amount. However, remember this golden rule of investing: Investing in the stock market is a zero sum game. For every dollar made, a dollar is lost. So the best way to invest is, not buying one, two, or even a few stocks. The best way to invest, is buying all of them. Yes, every single stock in the US market. And you can do that, through an index mutual fund.*

*Most index funds and other types of mutual funds require a minimum investment of $3,000. In the meantime, talk to your parents about opening a money market or CD account to save money until you have enough for one of these funds

(4) Not sure about any stock market games. You can test your investing knowleadge if you do a Google search for it. Its good to brush up on your investing knowledge, so that youre not easily lead astray by someone out to make money off of you instead of making money for you.

Hope that helps. If you have any more questions contact me. I am a financial advisor

Helen asks…

Investing for a poor college kid?

Being as I’ve lacked money my entire life I’ve really gotten into reading on savings & investing recently and I’ve been wanting to make sure to start those as early as possible as to (hopefully) maximize returns. Anyhow I’m currently reading The Intelligent Investor and I’m just having a hard time figuring out how I would apply some of the tips to myself. A lot of what I’ve read involves making sure you have a diversified portfolio (I’m early into the book). I know there are no exact numbers to what you want to invest but if I were to invest 10% into say bonds, that would literally be about $20.

What I’m trying to ask is should I worry about a diversified portfolio right now while I have less than $1,000 in spending money (and I don’t want to spend every dime of my recreational cash) or should I try to stick to something more specific?

Also any book recommendations would be great.

John answers:

If you only have a couple of hundred to invest, then I think a savings account would be best. Most brokerage or mutual fund companies would not be interested in this amount of money. Not only that, but brokerage costs/expenses would eat up any return. Come back when you have at least $1,000.

Investing for Dummies by Eric Tyson is a good primer. Morningstar also has many tutorials on stocks, bonds, mutual funds, diversification, asset allocation, etc.

Ruth asks…

Is this a good business idea for a 18 year old kid?

Hey guys. I’m now 16 and have around 15 grand, and when I turn 18 I plan to have somewhere around 20, so I’m wondering if it would be a good idea for me to rent a storefront in Chicago suburbs where GameStops aren’t frequently seen, and start a gaming store. Not only for games and headsets etc. I mean like a full on gaming store. I’d have PlaySeats for racing games, which if you don’t have one and love racing games it’s easily worth dishing out the $800 USD for the Porsche 911 GT authentic wheel, gas, brake, shifting, and seat. However, I would have those for sale, as well as other options GameStop doesn’t have. Would this be a good idea? I took an Entrepreneurship class my Sophomore year of high school which taught me a lot about business especially well because my teacher owns his own extremely successful tree nursery. So do you think this would be a good idea, do you think it could grow if maybe a light shined on it, and I got some money and all and started a business kinda link Gamefly aswell? Because I love video games, and I believe everyone should be able to play them whether they can afford the consoles or not. Everyone deserves enjoyment. So my question overall (I think I’ve rambled enough), is do you think this would be a wise investment for and 18 year old kid who’s looking to invest money into a store to help pay for college and even keep it going after college, by the way I’m looking to become a Pediatric Neurosurgeon. So if you think this could work please give me helpful tips. I’d love for my dream(s) to come true.
I should also mention it wouldn’t be risky as my mother is a trader and can easily pay for my entire college including med school, and all that if the shop fails. It’s just a goal of mine to own a successful business.

John answers:

Make sure you have a thorough business plan before starting.

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