DAVE SAYS: Skip the class and the rent.

A course in day trading?

Dear Dave,

I recently was offered an opportunity to participate in a hands-on stock trading class. The problem is we don’t have the $6,500 registration fee just lying around. My husband and I are on Baby Step 4 of your plan, so what would you think about us borrowing that amount from our emergency fund? We would still have three months of expenses set aside after paying for the class.

—Camille

Dear Camille,

I don’t know the exact course you’re talking about, but I do know something about the concept of buying and selling stocks, or day trading, if you want to call it that. I can tell you that all the research shows 78 to 84 percent of day traders lose money. And 100 percent think they won’t be the ones losing out. That includes people who take courses like the one you mentioned.

I have found no data points which show, on a consistent level across a broad population, that people who take a course like that become wealthy as a result. Buying and selling single stocks is an ultra-high-risk proposition. That’s why I don’t buy any single stocks. Now, I know some people who buy and sell single stocks as a very small percentage of their financial world. It’s almost like a hobby for them. A couple might actually make a little money from time to time, but it’s not the main focus of their investment strategy. To hear them, it’s like listening to fishing stories. They’re always talking about the one that got away.

I wouldn’t waste my money on the course, Camille—especially my emergency fund money. Your emergency fund is for, say it with me, emergencies only!

—Dave 

Don’t go too far

Dear Dave,

Our son is 17 and he is in school. He has a good part-time job, and my wife and I started teaching him basic money management at a young age. He understands the importance of saving, giving, and spending, plus he is setting aside money for technical school after he graduates from high school. Do you think it would be an appropriate real-world exercise if we started charging him a very small amount in rent each month to prepare him for life when he leaves home?

—Barry

Dear Barry,

I appreciate the fact that you’re looking for teachable moments, but I really think charging a teenager rent while he’s living at home is going too far. Now, if he was 28 or 29, that’d be a different story. But, as parents, it’s still your responsibility to provide a home for your 17-year-old child.

It sounds like you’ve done a fantastic job already of helping your son grow into a responsible young man. He knows how to work and he has grasped the basic concepts of managing money. I meet people three times his age on a regular basis who still haven’t done that. With this kind of start, I’ve got a feeling your kid will be fine. I also think he has a great chance of becoming wealthy in the future.

—Dave