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No. of Recommendations: 3

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
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