Investing child's savings (1 Viewer)

[jrdbrn]

I've saved up a little over $3k for my son for when he is older for college or other needs. I am looking to either invest it in a low risk or some type of CD/alternative. I am roughly saving $1000 a year for him plus other deposits when cash is available. My family has never been the saving kind so I can't really ask advice from my parents.

Suggestions? I understand low risk = low reward, but it's better than sitting in a savings account gaining .01%.

 

[guidomerkinsrules]

If it's specifically for college there are several tater in college savings programs that have at least 4 tiers of savings types

 

[BobE]

you should invest it in hookers and blow

 

[Whodatinjoburg]

Google Dave Ramsey

 

[st dude]

I've saved up a little over $3k for my son for when he is older for college or other needs. I am looking to either invest it in a low risk or some type of CD/alternative. I am roughly saving $1000 a year for him plus other deposits when cash is available. My family has never been the saving kind so I can't really ask advice from my parents.

Suggestions? I understand low risk = low reward, but it's better than sitting in a savings account gaining .01%.

I would invest it in a conservative mutual fund that invests in blue chip stocks and bonds. Look for a no load fund (one that charges no commission to invest), and a fund with low expenses. Fidelity Puritan is a good fund. I have been invested in it for 25 years now. It averages about a 7 % annual return.

Index funds that track the Dow are good investments as well with very low mgt fees because all the mgr does is invest in stocks that make up the index. The Vanguard family of funds is a good choice for an index fund with no commission to get in and small mgt fees.

The price of the funds can dip in recessions, that's when you really want to add to the investment, not sell.

You do not need a broker to buy one of these funds. Just google Fidelity and check out historical information on Puritan fund. You will see other funds that out perform it during some years, but those funds may be taking greater risk. The Puritan fund invests in fairly conservative and relatively safe stocks and bonds. Because it invests in bonds too, the price doesn't fall as much when stocks pull back.

 

[baarbogast]

Look into 529Cs, education IRAs

 

[Consigliere]

you should invest it in hookers and blow

No, do that with just half of it.

You can waste the other half.

 

[Alan]

Skip the college. Let him learn a TRADE that is actually useful for society. Pieces of paper are cannon fodder for people that have been getting it done since BEFORE universities tried to turn it into a pay to win program.

Let me ask you....if a university pays more to a coach instead of the curriculum, is that putting education first?

 

[Consigliere]

Look into 529Cs, education IRAs

Exactly - do you and son a big favor, start a 529 based in simple index funds and give monthly for the next 18 years.

 

[Surviving Saint]

Yea my wife just stuck my daughters savings in a CD with .035% for 5 years. Anyone know what the penalty is to pull it out and invest it the right way? It was a little over $1000 so $17 in 5 years is not worth locking that money up. Im thinking about it putting into Amazon or something where it has a chance to grow. We also put money in her acct. monthly.

 

[st dude]

Yea my wife just stuck my daughters savings in a CD with .035% for 5 years. Anyone know what the penalty is to pull it out and invest it the right way? It was a little over $1000 so $17 in 5 years is not worth locking that money up. Im thinking about it putting into Amazon or something where it has a chance to grow. We also put money in her acct. monthly.

CDs have different terms. Generally speaking the penalty is some agreed upon period of interest payments. At .035 the penalty would be negligible. Put it in a fund.

 

[Twyst]

Consider a 529 plan. Its like a retirement fund and has HUGE tax benefits, but is intended for education. All gains etc are completely tax free as long as they go towards education
https://investor.vanguard.com/529-plan/

also, if your family has never been the saving kind and you want to learn, this is the best resource on the internet IMO

https://www.reddit.com/r/personalfinance/

Start here
https://www.reddit.com/r/personalfinance/wiki/commontopics

 

[MLU]

Skip the college. Let him learn a TRADE that is actually useful for society. Pieces of paper are cannon fodder for people that have been getting it done since BEFORE universities tried to turn it into a pay to win program.

Let me ask you....if a university pays more to a coach instead of the curriculum, is that putting education first?

Why not both? I learned the basics of welding in a weekend. I learned basic masonry over a few weekends. It doesn't take that much of your life to learn a trade.

I worked 3 years of physical labor with my dad. I learned 2 things: 1) nothing else I ever do will be as hard and 2) I need to find a job that uses my mind and not my back. My dad's body was shot at 50.

 

[superchuck500]

529

 

[Alan]

Why not both? I learned the basics of welding in a weekend. I learned basic masonry over a few weekends. It doesn't take that much of your life to learn a trade.

I worked 3 years of physical labor with my dad. I learned 2 things: 1) nothing else I ever do will be as hard and 2) I need to find a job that uses my mind and not my back. My dad's body was shot at 50.

What you and I experienced while maturing is a dying existence. The only way it comes back is if we return to those times. The truth is that the tools that allow us this point and time are not guaranteed and are highly suspect in the overall survival of the human race.