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16 year old child earning YouTube income; investmentment advice

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  • #16
    Originally posted by Marko-ER View Post
    Congrats on a successful channel. How many hours a week does that take, and any changes in school-related activities, grades, etc. I would definitely monitor that aspect closely.
    Thanks, yes, that has been a challenge. I would say the editing for a 10-15 min video generally takes him somewhere in the 5-10 hour range. And the brainstorming,planning and game play (in this case Minecraft) that precede that can be substantially longer...

    He was making about one video a week during the summer but now it's more like one every two or three weeks.

    Fortunately, he's a bright kid with good friends, does very well in school with lots of activities, sports, music etc. He seems very motivated/passionate so we're trying to encourage him but also remind him to put this in the perspective of a balanced life full of experiences.

    What I worry about most is all the distractions and dopamine surges that come with the flood of comments, likes, thumbs up thumbs down etc. And along with that the unstated pressure of having an 'audience' to satisfy/appease. Internet shuts off at 9pm and cell phones are downstairs in the charger at night in our house, which I think helps somewhat.

    He is essentially directing his own movie every couple of weeks, running his own mini media business and is pretty excited about it, so we're trying to give him some latitude (even if my wife and I don't totally get it )

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    • #17
      Be aware that while most of the mainstream one-participant 401k providers are free*. A professional TPA is not.
      The most economical is probably a nationwide remote TPA, Employee Fiduciary (EF). Kon does not like them or any platform providers in general. Personally, I think his multi-discipline approach is overkill for very small plans. I do not know if EF will support a one-participant 401k plan for a minor.

      I do not personally have nationwide references for local TPAs. Which will likely be more expensive. The only suggestion I have is to register and post to the 401k forum for professional TPAs on BenefitsLink.com https://benefitslink.com/boards/inde...20-401k-plans/ Maybe they will know of a resource to find local professional TPAs and likely will have far more knowledge of this unique issue.

      *Vanguard charges a $20/fund/year fee if your total Vanguard assets are < $50K.

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      • #18
        Originally posted by taqui View Post

        Thanks, yes, that has been a challenge. I would say the editing for a 10-15 min video generally takes him somewhere in the 5-10 hour range. And the brainstorming,planning and game play (in this case Minecraft) that precede that can be substantially longer...

        He was making about one video a week during the summer but now it's more like one every two or three weeks.

        Fortunately, he's a bright kid with good friends, does very well in school with lots of activities, sports, music etc. He seems very motivated/passionate so we're trying to encourage him but also remind him to put this in the perspective of a balanced life full of experiences.

        What I worry about most is all the distractions and dopamine surges that come with the flood of comments, likes, thumbs up thumbs down etc. And along with that the unstated pressure of having an 'audience' to satisfy/appease. Internet shuts off at 9pm and cell phones are downstairs in the charger at night in our house, which I think helps somewhat.

        He is essentially directing his own movie every couple of weeks, running his own mini media business and is pretty excited about it, so we're trying to give him some latitude (even if my wife and I don't totally get it )
        You got this. At the lowest level it’s a work/life balance to allow personal growth for whatever path he takes.

        Tons of skills, responsibilities and decision making benefits. You are wise to lay the foundation of retirement and savings.
        The pitfalls of early success are obvious.
        Easy money, pampered hs athletes , child stars etc.

        Regarding the “business”. The record keeping is important. The expenses deductible are only those he pays. The suggestion of Internet and portions of the room etc. only make sense if he pays rent or special items. I doubt you are charging him rent and utilities.

        I disagree with the “don’t do college” advice. Let him take it on and learn from it. Time management as part of his life, whatever path he chooses.

        You got this.

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        • #19
          Originally posted by spiritrider View Post
          Be aware that while most of the mainstream one-participant 401k providers are free*. A professional TPA is not.
          The most economical is probably a nationwide remote TPA, Employee Fiduciary (EF). Kon does not like them or any platform providers in general. Personally, I think his multi-discipline approach is overkill for very small plans. I do not know if EF will support a one-participant 401k plan for a minor.

          I do not personally have nationwide references for local TPAs. Which will likely be more expensive. The only suggestion I have is to register and post to the 401k forum for professional TPAs on BenefitsLink.com https://benefitslink.com/boards/inde...20-401k-plans/ Maybe they will know of a resource to find local professional TPAs and likely will have far more knowledge of this unique issue.

          *Vanguard charges a $20/fund/year fee if your total Vanguard assets are < $50K.
          EF is cheap but not free ($500 + 8 bps), and they are clueless (just like mainstream providers) when it comes to giving advice. That's the reason I avoid them like the plague. Mysolo401k.net is probably a better option given that you actually get advice from someone (a lawyer). Also, mysolo401k is set up for MBR 401k, EF is probably not even going to offer this option (I've seen many large chain providers such as Guideline won't even allow more advanced options in your plan document unless you pay them more). One thing to keep in mind is that EF is NOT a TPA. They are a record-keeper. I would also avoid 'local' TPAs. You can find any TPA anywhere in US and that would be the best option since you can easily find several and interview them (as well as compare pricing).
          Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

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          • #20
            Kon, yet again as is often the case you feel the need to correct my posts with factually incorrect information.

            Read my post you quoted again. I never said EF was free, only mainstream providers. In fact, I explicitly stated that professional TPAs were not.

            Mysolo401k.net is a joke. I have seen no less than 10-12 major errors on their website. Not to mention on several occasions that I am even aware of, they have advised clients to take blatant non-compliant actions. In one example they insisted that employer contributions do not reduce available compensation for purposes of the annual addition limit. God knows how many other clients they have left with major non-compliance to be discovered later. There is no SOL for failure to file Form 5330 and pay the 10% excise tax.

            Also, you are incorrect in regards to EF. From day one their one-participant 401k offering has supported employee after-tax contributions and in-plan Roth rollovers/in-service Roth rollovers necessary to support the MBDR. What is your definition of a third party administrator (TPA)? You even dismiss EF because they are a bundled provider.

            They collaborate in selecting one-participant 401k plan features, completion of the plan adoption agreement to elect necessary features/options, provide participant account opening, trust account opening, custodial services, maintain plan compliance including; contributions; distributions, amendments/restatements as necessary, not just record keeping services. They provide 1099-Rs for distributions and for a nominal fee signature ready Form 5500-EZ. By any reasonable definition they are a full service TPA.

            Yes, for a $500 setup fee and $500 annual administrative fee, you are going to get limited hand holding. The 8bps fee is for custodial services of your supposed non-TPA.

            Comment


            • #21
              Originally posted by spiritrider View Post
              Kon, yet again as is often the case you feel the need to correct my posts with factually incorrect information.

              Read my post you quoted again. I never said EF was free, only mainstream providers. In fact, I explicitly stated that professional TPAs were not.

              Mysolo401k.net is a joke. I have seen no less than 10-12 major errors on their website. Not to mention on several occasions that I am even aware of, they have advised clients to take blatant non-compliant actions. In one example they insisted that employer contributions do not reduce available compensation for purposes of the annual addition limit. God knows how many other clients they have left with major non-compliance to be discovered later. There is no SOL for failure to file Form 5330 and pay the 10% excise tax.

              Also, you are incorrect in regards to EF. From day one their one-participant 401k offering has supported employee after-tax contributions and in-plan Roth rollovers/in-service Roth rollovers necessary to support the MBDR. What is your definition of a third party administrator (TPA)? You even dismiss EF because they are a bundled provider.

              They collaborate in selecting one-participant 401k plan features, completion of the plan adoption agreement to elect necessary features/options, provide participant account opening, trust account opening, custodial services, maintain plan compliance including; contributions; distributions, amendments/restatements as necessary, not just record keeping services. They provide 1099-Rs for distributions and for a nominal fee signature ready Form 5500-EZ. By any reasonable definition they are a full service TPA.

              Yes, for a $500 setup fee and $500 annual administrative fee, you are going to get limited hand holding. The 8bps fee is for custodial services of your supposed non-TPA.
              Good to know that mysolo401k is not a good service provider, I had no idea other than what I've been told by others, I wouldn't be surprised by this. If I remember correctly, WCI used them, that's why I typically recommend them to those who want custom plan docs. Ascensus can also do custom plan docs from what I remember, but their service isn't as widely advertised. I wouldn't necessarily hold EF above mysolo401k either because while they may have the same features in their docs, they also make tons of mistakes, some are quite serious, when it comes to administration (this is why I say they are not a TPA, they are a record-keeper with some TPA functions). So both are not very good if you want to do something more complex than using a simple solo 401k plan. The only other solution is to hire a TPA, and even with TPAs you sometimes get what you pay for (again, this is from personal experience). A good rule of thumb is that if it is free or very cheap, you shouldn't expect 100% perfection, EF, mysolo401k, etc., doesn't matter. I always err on the side of hiring the best service providers (and good TPAs aren't cheap, that's for sure), so I would not use either one of for anyone I work with. And if you plan to do MBR 401k, the best antidote to service provider errors/mistakes is to become very proficient in this by learning the rules and procedures, or simply stick to basic off the shelf solo 401k and call it a day.
              Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

              Comment


              • #22
                WCI,
                jacoavlu
                Physician
                jacoavlu,
                saildawg
                Member
                saildawg and some others significantly educated themselves of all the ins and outs of one-participant 401k plan administration and compliance. I had/have no qualms with them or others with the same knowledge using what I consider glorified document resellers. They really should not be considered service providers.

                I like you, think that if you truly understand all the issues, you would probably be better off directly going to Ascensus for your plan document. Then you should realize you are fully responsible for all one-participant 401k plan administration and compliance unless you use their a la carte services.

                They after all are the TPA with the largest number of plans, In fact their team of ERISA lawyers write the plan documents used by pretty much all of the internet document resellers as well as many independent TPAs. Even E-Trade, Schwab, TD Ameritrade and Vanguard use Ascensus plan documents.

                I am still convinced in my recommendation that the vast majority of individuals without detailed knowledge of full 401k plan administration and compliance use a mainstream one-participant 401k provider or a true TPA. They just don't know what they don't know yet.

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