T bills
My grandson wants to invest in short term. 6 mo. Are T bills his best option. I know nothing about investments except when I listen to you on WGN. Thank you.
Terry Says
No, T-bills are a way to set aside money safely. But your grandson presumably has many years ahead to invest and make his money grow.
Is he working? Does his company offer a 40l(k) plan? If so, he should immediately sign up and contribute — especially if the company will match his contribution. And if they ask whether he wants to make it a “Roth” contribution (meaning he gets no tax deduction for it, but all the money will grow tax-free) he should definitely take that option.
If the company doesn’t offer such a plan, but he IS working and earning an income, he can go to Fidelity.com and open a Roth IRA. He should put the money into the S&P 500 stock index fund, and set up regular monthly contributions, taken automatically out of his checking account.
If he isn’t earning any income, he can’t contribute to a plan. But he can buy individual stocks outside a retirement plan, through a brokerage account at Fidelty.
BUT, I would recommend he have 6 months of basic living expenses in a bank money market account before he starts buying stocks, unless inside a company retirement plan.
