Surprise! Even your young adults don't know everything, and they could use guidance on when and where to invest -- especially in these tough times. By Janet Bodnar, Editor-at-Large November 26, 2008 I recently wrote about a conversation I had with my 25-year-old son, John. John had just read a story in Kiplinger's Personal Finance about a young investor named Deirdre, also 25, who had amassed more than $100,000 in Vanguard index mutual funds. "How come you never told me about mutual funds?" he asked. Having grown up with a mother who writes about kids and money, my children are accustomed to being the subjects of amusing anecdotes in this column. But one reader wasn't amused. "You've spent more than 15 years writing about kids and money and you apparently never told your son about mutual funds," wrote Rob from Knoxville, Tenn. "I almost found myself speechless." Rob, let me explain. John and I had discussed mutual funds; in fact, his Roth IRA was invested in one of the same index funds as Deirdre's money. John thought that because Deirdre had a much bigger balance, there was some gonzo fund that I had neglected to tell him about. The real difference was that Deirdre had been living at home with her parents and socking away more than 60% of her income during the bull market of the early 2000s. Advertisement John also thought that I had steered him wrong by suggesting he stash his money in an IRA, which was earmarked for retirement, instead of an investment he could tap more easily -- say, to pay for grad school. That kicked off yet another mother-son discussion, in which I explained the benefits of a Roth IRA: John can get access to his contributions at any time, and he can even withdraw earnings to pay for education expenses without incurring a penalty. The point is that even with 25-year-olds you have to take things one step at a time. Basic information goes a long way. With the stock market in the tank, that point was brought home to me yet again when I told all three of my twentysomething kids that they should contribute to their IRAs. "Shouldn't I wait till the market starts going up?" John asked. Nope, I told him, buy now when stocks are on sale (see Start Investing in Three Simple Steps). Advertisement I did tell him I'd give him a pass this year because he's borrowing money to pay grad-school tuition. So I was surprised a couple of weeks ago when he informed me he'd kicked in $500 to his IRA after all. Assuming that the stock market eventually snaps back to its historical average return of 10% a year, that tiny contribution of $500 will grow to $26,850 by the time John's ready to retire. And I have no doubt that the lessons he continues to learn about saving and investing will make him a millionaire, perhaps several times over.