Skip to main content
No. of Recommendations: 3
Noz,

Congratulations on raising a financially responsible son!!!!

I couldn't find RRRRX on Schwab, but did find RRRAX & RRRCX which are the A & C Class shares of the same DWS real estate fund, I am guessing that RRRRX is a class of the same fund specifically for employer sponsored retirement account.

Hopefully, the version that your son has available in his 401(k) has lower fees than the A & C class shares available on Schwab that have fairly high fees. When I worked for a small family owned bank out 401(k) had pretty high fees overall and if your son has such high fees, if your son's 401(k)'s fees are on the high side I would avoid in putting more in than what is required to get the full match.

If he uses Schwab they have their own REIT ETF - SCHH which has lower fees than VNQ with 0.07% versus 0.12% for VNQ and there is no commission when buying or selling if you do so from your Schwab account. At least there are no commissions on a limited number of trades each year, but they do not let you day trade the thing commission free. About a third of my son's Roth is in SCHH. There are slight differences in VNQ's and SCHH's holdings, but they are pretty similar. Therefore their performance is pretty similar.

I have a son probably a year or two younger than yours. I am writing a book on investment for my son. I am in the middle writing a small section on owning direct real estate, listed as one of three ways to build real wealth along with the stock market and owning your own business. I wouldn't rush into owning direct real estate what you see on TV is not typical of what I saw dealing with private real estate investors. Of about 50 such investors most didn't do that well with less than a dozen being what I would call at least marginally successful including two that did great at it. I recently posted a segment of the my book that incorporates the methods used by the two great ones. The better of the two did it full time and I didn't want my son to think he could do that sort of thing full time, so I combined the two so my son wouldn't read about a full time real estate investor making his fortune.

You really shouldn't own real estate unless you know you are going to be some place for quite a while.

Again congratulations on your son.

Regards, VM
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.