Question

1. which brokerage account should your parent/guardian open for you if you have taxable income or wages?

1. your friend alicia, who is 13 years old, comes to you and says, \ive heard that kids can start investing but i feel like the whole process of opening an account sounds so overwhelming! how am i supposed to manage it myself and make sure im not doing something wrong? this is why id rather wait until im an adult to get started!\

is everything alicia said true? how would you respond to her so that she can feel more confident about investing?

Explanation:

Question 1

The problem is about choosing a brokerage account for a minor with taxable income, which falls under the Business discipline, specifically the subfield of Finance. A custodial brokerage account (like a UTMA/UGMA account) is typically opened by a parent/guardian for a minor with taxable income. These accounts are managed by the guardian until the minor reaches the age of majority, and they handle the taxable income aspects appropriately.

Alicia's statement has inaccuracies. Minors can invest through custodial accounts managed by parents/guardians, so they don't need to wait until adulthood. To reassure her, explain that parents/guardians can open and manage the account initially, she can learn about investing gradually, start with small amounts, and use resources to understand the process, making it less overwhelming.

Answer:

A custodial brokerage account (e.g., UTMA/UGMA account) should be opened by the parent/guardian.

Question 2