Overview of DIY Money Jr: Where to Start Investing
In this episode of DIY Money, the hosts answer a question from 13-year-old Annie in Virginia, who just opened a brokerage account and wants to know whether she should invest in dividends, growth stocks, or ETFs. After a lighthearted opening about golf and learning new skills, the conversation shifts into a practical investing framework for young investors: use a mix of broad index funds and a few individual stocks you personally understand and care about. The episode emphasizes that investing at a young age is not just about returns—it’s also about education, building confidence, and learning how markets behave over time.
Main Recommendation for Young Investors
A simple split: 50% ETFs, 50% individual stocks
The hosts suggest that if Annie were their child, they would use a two-part approach:
- 50% in index ETFs, especially the NASDAQ 100 via QQQ
- They describe this as a broad way to gain exposure to many of the largest U.S. companies, with a heavy emphasis on technology.
- 50% in individual stocks in companies she actually knows and follows
- The key is to choose businesses she uses or understands, not just popular “safe” names.
Why not just buy famous companies?
They stress that young investors should avoid buying stocks simply because they sound stable or well-known. Instead, the goal is to invest in companies that feel real and relevant to everyday life.
Examples they mention:
- Lululemon
- Shake Shack
- Target
- Disney
- McDonald’s
- Toast (for someone who works in a restaurant)
Why This Strategy Works
It’s educational, not just financial
The hosts repeatedly frame the account as a learning tool. A custodial brokerage account can help a young investor:
- watch stock prices move up and down
- read company news and earnings reports
- learn how businesses operate
- discover whether they actually enjoy investing in individual stocks
It helps reveal your investing style
A major theme is: you won’t know if you’re an individual-stock investor until you try it. If Annie finds herself checking her portfolio, reading about the companies, and staying engaged, that may signal a genuine interest in stock picking. If not, a broad ETF may be the better long-term fit.
Stories and Examples Shared
Decker’s / Hoka story
One host shares a college story about researching Deckers Outdoor, which owned Hoka. Their class group called running stores across the country to ask which shoes were selling best. The repeated answer was Hoka, and that real-world research helped build conviction in the stock.
The “Jim” example
Another story involved a younger investor who became nervous when his portfolio was down just $11, then later wanted to make changes again when it was up $300. The lesson: young investors often react emotionally to small moves, and that’s normal—but it’s important to learn to stay disciplined.
Important Investing Lessons
Expect volatility
The hosts warn Annie that at some point she will likely see her account value cut in half during a bear market. That is normal for investing in stocks.
Don’t panic—add more
Their advice is to remember that downturns happen, and instead of selling in fear, investors should try to:
- stay calm
- keep learning
- add money when possible
- think long term
Start young so you build experience
Experiencing market ups and downs early helps prepare an investor for larger portfolios later in life. The sooner someone learns not to panic, the better off they’ll be when more money is at stake.
Key Takeaways
- A mix of index ETFs and individual stocks can be a strong starter strategy for young investors.
- QQQ / NASDAQ 100 was the preferred ETF choice in this episode.
- Choose individual companies you know, use, or care about rather than random “safe” stocks.
- The real value of a youth brokerage account is education and experience.
- Expect volatility and learn to stay invested through downturns.
- The long-term formula remains simple: live on less than you make, invest the rest, and do it for a very long time.
Notable Closing Thought
The hosts reinforce the show’s core wealth-building philosophy:
“Live on less than you make, invest the rest, and do so for a very long time.”
They also thank Annie for the question and offer her a $25 Amazon gift card for submitting it.