The Financial Gardening Project for High School Graduates

Initial Gift: You will receive from me $100 in cash with a card explaining the project.

Retirement Account Setup: If you choose to participate, I will work with you to set up a Roth IRA retirement account in your name and will add another $100, bringing your total to $200.

Investing Together: You will then work with me to invest your money in two different ETF or mutual fund holdings. 

Birthday Gifts: You get an additional $100 to invest on your birthday each year.

Good Grades: If you take college or trade school classes, you can earn extra money by making good grades: $1,000 for every A and $500 for every B.

Regular Contributions: You are responsible for contacting me on your birthday and/or after each grading period to get the additional monetary gifts added to your retirement account. Of course, you can add money of your own.

Ongoing Investment: Whenever you receive gifts, you will work with me to invest them appropriately.

End Date: This program is designed to give you a head start in planning for your financial future. It will end when you turn 26, with the hope that you will continue to invest in your future independently after that. 

Learn Financial Skills: Gain valuable knowledge about managing and investing money.

Reward Academic Success: Get financial rewards for doing well in your studies. 

Endowment Fund: The project is funded through an endowment, and the number of participants depends on how well the endowment performs.

Annual Limit: Each participant can receive up to $2,100 per year.

From day one, the money you receive is and always will be, yours. Along with the earnings. And tax free because it’s a Roth IRA.

Eligibility: To participate, you must have finished high school and be at least 18 years old. Participation ends on your 26th birthday.

Grade Requirements: Only substantial courses with tests at the end qualify for grade-based gifts.

The project may change or end at any time based on my discretion.
 

The hardest part is getting started, which we are doing right now.

So now, you have contacted me and want to get started. 

First, on the phone and sharing computer screens, we’ll set up an account in the gardener’s name on the Fidelity.com website. Fidelity is a popular brokerage firm. They do a good job.  And that’s where the endowment account is held, which facilitates the money transfers to the gardeners.

Second, the gardener opens a ROTH IRA retirement account with the initial $100 gift I gave you along with $100 more, transferred to your account from the endowment. The gardener will never have to pay tax on this money in their ROTH IRA account. 

A financial advisor I am not. Fortunately, we don’t have to analyze company financials and economic trends to invest our money.

Instead, we’ll follow the model of most retirement portfolios by investing in ETF’s (exchange traded funds) and/or  Mutual Funds. These are investment instruments that pool a large number of individual investments. These pools are put together and managed by professional portfolio managers with very reasonable fees because of the volume. There are thousands to select from and good tools within your Fidelity.com website  to search, filter, and select ones we like.

With the purpose of getting started, I will suggest the initial investments … by example. I give the “gardener” what Fidelity calls “inquiry access” to the endowment account. They will be able to see the investments I’ve chosen and I anticipate that the gardener will likely invest their money in the same manner. 

With time, I anticipate that the “gardeners” will take an interest and learn what is needed to take over the task. Because after all, I step back when you turn 26.