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Investing for kids
Posted on 3/6/14 at 12:09 pm
Posted on 3/6/14 at 12:09 pm
If you had a lump sum to invest for kids of different ages, would you divide it equally or try to estimate the return to be equal at a future age?
For example, give the younger kids less because they have more time for the money to grow.
For example, give the younger kids less because they have more time for the money to grow.
6
Posted on 3/6/14 at 12:15 pm to skidry
quote:
try to estimate the return to be equal at a future age?
Posted on 3/6/14 at 1:04 pm to skidry
I would do the latter (or at least try).
If this isn't college money, can you give it to them at a predetermined date as opposed to a predetermined age? If so you could split it equally.
If this isn't college money, can you give it to them at a predetermined date as opposed to a predetermined age? If so you could split it equally.
Posted on 3/6/14 at 4:10 pm to skidry
quote:
If you had a lump sum to invest for kids of different ages, would you divide it equally or try to estimate the return to be equal at a future age?
For example, give the younger kids less because they have more time for the money to grow.
we ran into this problem. We were investing for our nieces and nephews. We gave them equal $$. Range from 2-14. The 14 year old (now 16) is getting screwed, but we figure to just throw her a little extra cash when she is in college.
I would suggest buying stocks if they are your kid and let them track it, make them figure out stats on it and when to buy/sell, etc. This is how I got into investing. My grandfather did it.
He wouldn't let me sell when it hits all time high (about $1000 total, he bought it for $100), now its worth $50 or so.
Posted on 3/6/14 at 4:52 pm to skidry
Thanks for the replies.
I don't have any plans for the money right now and also hope to fund their college separately. For now it's just a nest egg.
I don't have any plans for the money right now and also hope to fund their college separately. For now it's just a nest egg.
Posted on 3/7/14 at 1:52 pm to skidry
Will this be invested in your name, or theirs as a custodial account?
I would either give them equal shares of a specific stock/fund if a custodial account. It's their choice to cash it out or whatever they choose. I assume you will contribute and leave it alone.
If it's your money, just dedicated to them, why not simply lump sum invest it, and estimate future returns (conservatively) and try to payout all the same. Since it's a conservative estimate, if there's any extra remaining after last child, divide it equally. This will make account balance and payout unequal over time, but if you calculate it right, should give you equal payout for each.
I would either give them equal shares of a specific stock/fund if a custodial account. It's their choice to cash it out or whatever they choose. I assume you will contribute and leave it alone.
If it's your money, just dedicated to them, why not simply lump sum invest it, and estimate future returns (conservatively) and try to payout all the same. Since it's a conservative estimate, if there's any extra remaining after last child, divide it equally. This will make account balance and payout unequal over time, but if you calculate it right, should give you equal payout for each.
Posted on 3/7/14 at 3:49 pm to skidry
I'd put it into an account that you control, invest in a diversified portfolio, and divide the account as the kids reach the target age. For example, if the account is at $20m when the first of 4 children reaches 18, that child would have the option of taking $5m now or leaving it to grow til a later date. He takes the cash, the next to 18 gets the same choice, 1/3 of the total or let it ride.
Posted on 3/8/14 at 1:36 pm to jeepfreak
Thanks. I like the idea of controlling the money until it's time to payout. Both Of the last two replies are good options.
This post was edited on 3/8/14 at 3:58 pm
Posted on 3/8/14 at 9:05 pm to LSUtigerME
quote:
I would either give them equal shares of a specific stock/fund if a custodial account. It's their choice to cash it out or whatever they choose. I assume you will contribute and leave it alone.
This was the option I chose.
Posted on 3/9/14 at 11:04 pm to Hawkeye95
quote:
we ran into this problem. We were investing for our nieces and nephews. We gave them equal $$. Range from 2-14. The 14 year old (now 16) is getting screwed, but we figure to just throw her a little extra cash when she is in college.
Damn, you raking it in or you don't have kids of your own?
My aunts/uncles sure as hell didn't start a nest egg for me
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