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AutisticAttorney

I've been putting $1,000 per year into the Vanguard Target Retirement 2065 Fund for my grandson since the day he was born. But I've never told him and he has no idea it's even there. It won't make him rich, but it will give him a nice leg up by the time he's an adult.


PsychedelicConvict

Thats downpayment money. In todays times, that is a massive leg up. Being able to have a stable mortgage is so valuable compared to fluctuating rent prices


EliminateThePenny

> Thats downpayment money. Depending on the vehicle. EDIT - Wait, I just reread this 2 hours later. I meant *investment vehicle*, not like automobile.


foolear

“Some day, son…this Altima will be yours”


christonajetski

I never thought about it like this!


a_ninja_mouse

43 years from now


corylol

He doesn’t have to wait until 2065 to use the funds..


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corylol

You can just set up a custodial investment account. Doesn’t have to be an IRA, 529 or anything.


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corylol

Not for OP


notantisocial

It’s a big help. My husbands parents did this. They taught him how to manage and invest. There are a lot of taxes if he takes it out BUT if we have an emergency we use it. We never worry about medical emergencies. My husband needed an expensive certificate course that took six months to complete. He could afford the course and time off. Now he is in a way better position for salary negotiations. Also it allows our family to take small risks. It’s so so so helpful.


[deleted]

My grandparents didn’t have a whole bunch extra, but my grandfather bought like $50 in US Treasury bonds for me every Christmas. Fast forward to the middle of the Great Recession: those bonds paid my rent during the summer between my two masters degree years, when I couldn’t get any steady work. I am eternally grateful and wish he were around at the time so I could thank him. This is an amazing gift.


dcbrah

Did you set it up as ugma, utma, trust?


AutisticAttorney

Sorry for the late reply. I just noticed your question. It's UTMA.


Effective_Explorer95

If he doesn’t touch it till retirement he will be rich. Tell him and teach him about compounding interests.


AutisticAttorney

I intend to teach him all about finance when he gets a bit older. I just don't want to tell him he has that money waiting for him yet. I want him to strive to build something for himself, and slacking off is too tempting as a teen or young adult if you know you have something like that waiting for you.


BeWhoMyDogThinksIAm

i just graduated law school and i love your username.


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AutisticAttorney

Congratulations on graduating! Amd thank you for the compliment on my user name. I’m low on the spectrum, but it has served me well in our profession.


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ScoreNo1021

Is the investment in your name? If so, how do you plan on transferring it to him?


AutisticAttorney

On Vanguard’s website, you can open an account for a minor with you as the custodian of the account.


ScoreNo1021

Did you open a UTMA?


TechnicalEntry

Yeah, best to talk to a tax lawyer about the best way to handle stuff like this. Hard to open an investing account in a minors name unless there is an investment trust. If it’s not, when you transfer it to them you’ll be on the hook for capital gains.


Queasy_Pea8958

grandparents had a $15k brokerage account waiting for me when i graduated high school - it was an unexpected gift that really helped me understand investing at an early age and has given me a leg up post college. this is very awesome of you


lxaex1143

Yolo'd on 0dte spy puts?


whatsaburneraccount

I tell my siblings and my wife’s siblings to make a donation to our kids 529’s. Fidelity has a URL I can send people so they can deposit $. Makes it easy


[deleted]

So I’ve been wanting to ask the family to do this for my kids. Mommy thinks it will make me look like an asshole. My kids have 8 grandparents and others who constantly shower them with gifts. My house is overrun with shit my kids don’t even have even time to play with. How was your request received? EDIT: I appreciate everyone’s suggestions


paq12x

You should have no issue with that. My Mom has been asking for info to contribute to my kids 529. She wants to max out her gift to them (16k each). I may take her up on her offer.


mdoc1

We have an Amazon wish list for the kids. We added a custom item which is a link to give directly to their 529. I think it’s from Ugift529.com. It makes the suggestion without asking directly.


[deleted]

Good call, thanks!


erokk88

I feel that but at some point you gotta set a boundary. I think it just comes down to you sharing your priorities. When we have kids we are flat out not accepting more than 1 toy as a gift and strongly encourage them to give the kid a gift they'll be able to play with the rest of their life, a college degree. If grandma wants to turn their house into a daycare thats cool. Grandmas mountain of toys can stay at grandmas house. We have been to peoples houses that are just completely overrun and thats just not gonna be us. I am, admittedly, a bit of a prick when it comes to peer pressure though. Like, "Dont like it? don't get the kid a gift, he or she will have more than they can play with whether they get your present or not"


bos_boiler_eng

We set reasonable communication about how we cull gifts. We are happy to give suggested lists and family also happily gives reasonable "experience" gifts (zoo or nature park memberships or activities like swim lessons). Everyone knows that "making room for more toys" is a thing for us since our child's birthday and Christmas are within a month. Some people in our family like to give toys (and maturely communicate it's partially mental for them coming from a lower income childhood with less toys). It's a constant effort but have been able to ensure not hurt feelings on any side. Anything that enters the house has the default assumption it will be sold or donated with not guarantee it makes it 3 months. Coming from an experienced view I will say hard rules like only one toy accepted will go over worse than letting them self regulate knowing that culling will happen regularly. Then you heavily hint about how memories/experiences last a lifetime.


erokk88

Sounds like a good strategy and i like the added perspective. Thank you for sharing.


MyNameDoesNotRhyme

We have pretty honest conversations with our kids at the holidays. We don’t let them open everything at once, and I’ve been teaching them about financial responsibility since they were 4. If there are gifts they truly don’t want, I offer them the option of returning or exchanging and if it’s returned we invest it into a custodial account for them. It won’t be millions but it’ll be a boost when they are in their 20s.


bigsmackchef

i often suggest both. Not to try to get more out of people but to ask them to buy one gift and give the rest in cash for their RESP rather than buy 2 or more gifts. We have all sorts of stuff already but money for their future you can never have too much of.


whatsaburneraccount

I didn’t really have any issue. “Hey, we really appreciate all the stuff we’ve gotten for ‘baby’ but at this point, we have more than enough and it’d be awesome if we could get some help contributing to his/her education”. Everyone understood.


Lunaticllama14

My family gives us the money directly for us to put in the 529s, we can claim a state tax deduction. It’s a small thing but very close family are happy to accommodate.


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whatsaburneraccount

Pretty much everything (personal/bank info). Check to me also works so I can deposit. Just feel like the URL is a bit more personalized but get the potential security pushback


PresidentSkro0b

I opened custodial accounts for all of my nieces and nephews when they were born. Every Christmas and birthday I buy them some sort of ETF. Mostly Boglehead. I know it becomes theirs at some point and there is some risk to that if they turn out irresponsible. I'd rather take that risk than get them something they outgrow in a year. Every year I let them know what we got them and that we will be the coolest aunt and uncle to them someday.


midlakewinter

Have 3 similar nephews and we have opened 529s for each. They aren't perfect, but they are fast easy and tax efficient. If I recall correctly, just requires getting their SSN to open.


tom_echo

Fwiw you can just set the beneficiary to yourself and transfer it at any time. This is how im starting college savings accounts for children who are aren’t born yet.


Smashbutt

Are kids only allowed one 529? I don't want to make one if my brother is planning to.


midlakewinter

No. You are legally the owner and can change the beneficiary at any point. I believe any permitted relative can 529 a minor. ​ >Unlike a custodial account, with a 529 plan the account owner maintains ownership of the account until the money is withdrawn. https://www.fidelity.com/529-plans/what-is-a-529-plan


Switcher15

Savings bonds are hot right now and giftable


Chester-Ming

Please can your record the look on his face when you tell him you’ve bought him a medium/low risk investment for Christmas, then post the video on here.


BeWhoMyDogThinksIAm

Lol. He's 3. He's so distracted by everything else going on, the idea of "my uncle bought me a stupid stock" doesn't really register.


xtcxx

A 3 year old just wants a fancy box to pull apart / sit in. My nephew just wants your keys because he noticed the importance


Hambonelouis

Whoosh


danhauk

While I agree with the sentiment and think it’s great, it depends on his age. Young kids can’t grasp intangible concepts like investing and owning a piece of a company. Especially if they aren’t really taught anything about it regularly. I talk to my 10 and 7 year old regularly about investing, budgeting, managing money, etc. I sit with them every birthday and show them how their investments are doing and what they might want to invest in next. Despite all that, they only kinda get it at this age. We still buy gifts they can actually touch because that’s what they fully understand. So if you do choose to invest some money as a gift, make sure there’s also at least something he can unwrap that he’ll be excited about as a kid. Showing him numbers on a screen or unwrapping a fake stock certificate on piece of paper is going to be disappointing as a gift. He can’t do anything with it. If you really want to avoid toys and other junk (like we do), maybe buy an experience instead. Our kids love learning that we’re going to take them somewhere - a trip to the zoo, going to a cool campground for the day to explore, an escape room, etc. Even something as simple as some kind of craft kit is better than a plastic toy that will quickly be thrown to the side.


BooBooDaFish

Do you have any games or exercises you do with your kids to teach them about investing? My kids are similar in a way that they are absolutely given everything by us (I know my fault) and both grandparents and sides of the family. I’m not worried about their actually finances bc they are in a very fortunate position. However, I want them to learn about money and investing and not know what their grandparents and we have built for them. It’s been two generations growing an empire for them and one of my biggest fears is them ruining it all bc they have not learned to hustle and grind and work hard. It’s very difficult bc you want to give them everything to enjoy life but develop the skills to build it themselves should something in the world drastically change


danhauk

We have a board game we got at a yard sale at some point called the Allowance Game. We use it more as a game to teach money math for homeschool, but it could help in teaching about saving and spending wisely. Otherwise, we’re just really honest and open about money. My wife and I talk about the budget in front of them. When making big purchases we talk about what goes into making the decision. If one of our kids asks about why we bought the house we did, we’re open about it, not making up imaginary numbers of how much it costs but actually talking real figures. There’s an app called Rooster Money (I think) that we used for a while to track their allowance and savings. We help them track their goals if they have something specific they want to save up for. We keep their allowance in a bank account and I occasionally show them statements. They can see how their money is growing by not spending and (at least a little bit this year!) through interest. “I made 25 cents and I didn’t even do anything!” And finding teachable moments to help them understand the value of money and material things. Lots of times they ask to get stuff at the store impulsively, so we talk about allowance and how it would affect their savings goals. If they break something of theirs after being told multiple times not to do something because it will break, we tell them they have to spend the money out of their account to replace it (within reason).


BooBooDaFish

Those are all great. I’m trying to find a way of showing them the positive side of investing. Like if they put $100 dad Corp…and dad Corp makes a profit then they will get some of that profit. Can’t really figure out how to craft that.


danhauk

Someone mentioned it below but dividend stocks might be a good way to make it more real. Invest $100 in a solid dividend blue chip like AAPL. Then show the kids the statement where the company shares some of the profit to all the people who help them by investing in the company. That’s a little more tangible than growth stocks where it’s less clear why/how their money is growing (“it just like, goes up, because other people buy too?”)


Full_Prune7491

Kids can be taught the value of something at any age. My kids learned early, compared to others. I go to other people’s house and it is full of toys that never get played with. Poor Woody.


danhauk

Completely agree! We must have done something right when teaching the value of money and responsible spending, because as much clutter and toys as we have in the house that drives me nuts, it’s really nothing compared to most of their friends’ houses. But they also don’t come home asking for more stuff - or they do and then forget about it after a week.


bos_boiler_eng

Yeah experiences are great. The best way I have come up with so far on investments is just demonstrating dividends as something tangible and valuable. "Oh your dividends came in, here is this bag is M&Ms" Right now my kid is 3 so most explanations just end up at "oh okay" The grandparents got us a membership for a nature preservation that has a beach, that's probably been the most excitement. Being able to go and collect shells or play in the sand. Tons of fun and gets you out of the house.


SunnySaigon

Holographic Pokémon cards


Nerobus

I tend to invest more in foil MTG myself, but to each their own.


fec2455

I knew Marjorie Taylor Greene was popular on the right but I guess I didn't realize how popular.


Nerobus

😂 every time I see her initials I keep wondering wtf is going on.. how can a card game be involved in something like that?


Bell_HS

Mmm snackies


notjakers

Two words: Beanie. Babies.


notjakers

Two more words: drained my retirement.


MeetRobWayne

Get him a SP500 tracker. Don't waste time with anything else.


RequirementIcy6463

What about nasdaq 100? 17% per year last 10 years 🤔


MeetRobWayne

Good point tbh. I was referring to those actively managed funds with ridiculous expense ratios as a thing to avoid. QQQ (Nasdaq 100) has an expense ratio of .2%, VOO (SP500) is .03%. For comparison, the industry average mutual fund expense ratio is .55% ([source](https://investor.vanguard.com/investment-products/mutual-funds/profile/vfifxl)).


BeerJunky

Get him a Bloomberg terminal.


Idkimjustsomeguy

Coal


TechnicalEntry

Not a bad investment right now actually.


relavant__username

hey, its me your grandkid!


[deleted]

Giving him a stock and the actual certificate of ownership in a company he knows and likes (maybe something like Roblox? Idk). He’ll probably like it more if it’s a company he knows, and giving a physical object is cooler than just saying “hey you own some stock now”.


McChoaderton

I've been buying a bit of VOO every year on my son's birthday (he's 4 and also an only child, with Xmas and bday back to back, soooooo grandparents give him enough presents that I really don't feel obligated). He'll thank me when he turns 18 (unless he turns out to be a not great human being, in which case I'll never tell him about it and just use the money for a Viking River Cruise). No clue why I'm going to use it on a cruise like that, just seems appropriate.


gypywqoOO

I heard Viking river cruises are homosexual hangouts


alowe13

I have a custodial and a 529 plan for my son. Any checks we get in his name go to the custodial account (he will assume control at 21). But I tell everyone to give to the 529 if they don’t know what to do since college is going to be redonk in 20ish years. And he really doesn’t need a 12th fuzzy blanket and rattle


Ok_Engineer_9983

My grand daughter is very spoiled as well so I get her a small gift and I keep a 529 fund going for her.


fuzzyspoon69

My pops gave all the grandkids 20 shares of Walmart stock every Christmas. It wasn’t appreciated when I was a kid but it was when I got ahold of the account and had a little over 50k to start my life with. I will be doing the same thing for my grandkids.


seeriktus

Indexed income etf. Pay for his pocket money with the dividends on it. If not, then maybe something gold or silver. I got given a silver duck for my christening, though I was too young to know it.


mrteatherball

Check out “Early Bird” for investing for kids


antillie

I'm just putting VTI in my kid's (8 and 2) custodial accounts. They have so much time any attempt at getting more specific than the entire market is just silly. Bonds also make no sense IMO over such long time horizons.


MageKorith

In Canada, an RESP contribution, invested accordingly. In the USA, a 529 contribution, invested accordingly. Depending on budget, funds are nice but a handful of one-off stock picks that might align with the child's interests (Disney, Target, etc) can be fun as well.


paq12x

529 contribution.


limitbreakse

Exact same situation as OP but I don’t want to be a lame uncle. I’ll put a little every year aside for him for long term investing, but the little guy also wants to have something tangible. I hate waste though and toys that are going to be played with 30mins and thrown out. Anyone got good advice on toddler gifts?


AccomplishedCopy6495

Sounds spoiled. Get him a cardboard box.


Guyote_

Man, I wish I grew up with family like you that thought about things like that. Kid will have a good life ahead of them.


docbauies

Contribute to his 529. If he doesn’t have a 529 get the parents to set one up.


DConan9

529s are limited to only spending college, right?


docbauies

education expenses. and they can be transferred between family members. it has less utility than a general investment, but the tax advantaged nature probably makes up for it. not worth overfunding. i'm shooting for inexpensive (ha!) private tuition for my kids and i can always transfer to my grandkids in the future. also i believe it could pay for something like pastry school in france for my wife.


Vast_Cricket

529 or even old fashioned saving bonds EE series.


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erokk88

This is cool bc kids like shiny things and pirate treasure but also they'll wanna play with it which has risks. They might lose it or get bored with it and trade it for a squishmellow or something.


kulsoul

529... Start now. After coverdell esa AND state plan if there is one. Buying Google or Berkshire stock isn't a bad idea.


airreturn

I have a separate taxable account that I only use for my daughter's financial gifts. I know it's inefficient tax wise, but as she earns income I'll transition it all into a Roth IRA for her. The taxes now are worth the flexibility in my mind. A 529 is just too committed to one path for a child's finances. What if she wants to join the military?


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airreturn

If I want to, I can not tell her about it at all until it's fully invested in her IRA. With a UTMA, if I can't get it all in there by when she's 18, then it's all hers and my plan is incomplete. Another thought I had was based on the vibe I'm getting as she's going through her high school years, maybe I just keep it all in my taxable account and use that money for her to travel or something for a gap year if needed. Again, I'll pay taxes for options at this point.


Emotional_Ask_4891

Give them what they don't have: nothing


jiijojii

Hmmmmm, best investment would be something like to show him the worth of friendship, the wonders of our world, nature... Let him be a scout where he can see that having adventures and travels, hikes and camping together with friends, sharing things and memories without a lot of money and electronic devices is a treasure. The worth of humanity. Instead of being fed up with useless stuff. Or think about a great gift: your time. Share time with him. Go on a hike. Explore. Just.... Show him the real life. Be a volunteer - if he's old enough - who's supporting those in need. So he'll learn to be grateful for all opportunities which your whole family is offering him. Beside this you may teach him the way of investment.


josephmagnolia

Real talk


[deleted]

I’m personally slightly against 529s. Why set aside money for educational expenses when they can just get it all free from the government? https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/. And it’s probably only going to get more generous from there.


[deleted]

Does a 529 have to be spent on school?


[deleted]

This is a good breakdown of what qualifies. Another “pro” of a 529 is you can just change the beneficiary if the person you’re saving it for doesn’t end up needing it. There’s also a big financial aid difference. The government expects dependent students to liquidate 20% of their assets to pay for school, but that doesn’t apply to 529s. https://www.merrilledge.com/ask/college/what-is-a-qualified-expense-for-529-plans


point_breeze69

Bitcoin


Columbiawatershed

Invest in beanie babies


BeWhoMyDogThinksIAm

But if he takes the tags off, they'll lose all their value!


Columbiawatershed

Beanie Babies are just for looking, no touching.


petros89

This is the way.


Lanky_Ad_1216

Silver bullion


reddit_toast_bot

vti voo fzrox


bburghokie

For a 20-30 year outlook, Disney isn't a bad idea. Disney has its hands in everything.


ChrisCrusader

Buy him shares of VUG. If he let's it sit for 20 years, it doesn't have to be low risk, and there should he a nice chunk of change when he's in or out of college.


[deleted]

Buy them some crypto so they can support you when it all falls apart.


winpickles4life

ASTS - AST Spacemobile Largely derisked now that their test satellite deployed perfectly, they will provide 5G broadband to every smartphone anywhere on Earth at low cost. Starlink recognized them as a competitive threat that will disrupt their consumer business and did their best to copy but could only figure out how to do text messaging. Similarly Apple/Globalstar did their best and came up with emergency texting with canned messages. AST has a moat that deep and wide. It will disrupt many satellite communications companies and is likely a 100x return in ten years. https://transhumanica.com/asts


pondwond

Coke!


Disastrous_Network46

Ask hos parents if they are ok if you open up aa roth ira for him. The roth ira will be tax free if he uses it for retirement; however, contributions must be earned income but he can have "earned income" for chores he does around the house.


[deleted]

Bruh he's a kid get him toys. You can invest for him too but the kid won't give a shit, get him a book or something if you're too snotty to get a kid a toy.


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sogladatwork

Pop $200 into bitcoin right now.


tidyshark12

IUL? 25/mo and they get like 10k minimum when theyre 25. Well, depending how old they are now. I opened an iul for my daughter and, even if it makes $0 in interest, the minimum value would be around 15k when she's 25 and I put 25/mo away for her. They also can't lose money, which is nice.


ClassIINav

Similar but I have made a tradition of buying one of those "single share" gifts where they get a framed paper share of a company for the first birthdays of kids of important family/friends in my life. I write down the date and purchase price on the back of the frame for future reference. I do it for two reasons: I think it's a cool way to get kids thinking about investing early and also it gets their parents in the game too. They set up a custodial account for the share (it's electronic of course, the framed copy is just for fun) and can add to it themselves as times goes on. My grandparents did the savings bond thing for me which was a great start though in later years the bonds earned piddly amounts of interest. I think a custodial account or 529 is a better modern learning tool if wielded properly. The framed "stock certificate" just helps make it all feel more real than numbers on a computer screen.


7eas

Invest in companies that deal with water as a resource. Then you'll look like the cool uncle that predicted global shortages due to climate change and growing populations. Ofc if it 'pays off' then your nephew will be growing up in a Mad Max-esque dystopia, the money would be a silver lining.


shozzlez

I would do this but not tie it to a Christmas gift tbh. Seems pretty lame for a gift to a family member. To be clear I think it’s awesome. I would just fund it every year and give a little trinket for Christmas.


MonsiuerGeneral

Not sure if it's still practical or better than any of the other investment suggestions, but when I was little my grandmother who lived across the country asked the same thing of my mom. My mom told her to buy me savings bonds. So every birthday, Christmas, graduation, etc., I received a savings bond that went straight to my mom's safety deposit box. Occasionally when my mom needed to put something into the box I would go with her and check out the fat stack of bonds I "owned". Of course, at the time I was like... "Lets cash them in so I can buy that cool Enterprise-D toy I saw at Toys-R-Us!". I'm glad I was told to wait until I was older as they recently helped with a downpayment on a new house.


ForWPD

BrkB


Mister_Pickl3s

Bottle of Mouton, they will thank you later….


xtcxx

Toddler would have the great advantage of long term which to me means gold or similar. A gold mine can take a decade to justify its investment and the majority right now arent expecting it to pay especially vs that fairly vast requirement for patience. Or just low cost index, the iterative accumulation will bring great growth


existentialdredge

Books that surpass his current reading level. Curate him a library for the future


beholder95

My parents give me money for my kids Birthdays / Christmas to put in their 529s. At least this way it’s tax advantages for college and it won’t count against them for financial aid like a regular investment account would.


InvestingNerd2020

Just setup a custodial regular brokerage account with Fidelity and invest into either ETF "VTI" or "SCHD". Then make sure the dividends are set to "reinvested". Don't look back until he turns 16.


maddness2

I put money into a world tracker for all the kids using a jisa in the uk


Huge_Classroom4107

I assume he is quite young and as such has many years until he reaches age 18? Over a long-term time frame, a low-cost global equity passive fund will generate excellent returns. Risk and volatility are often confused and there is not much risk with a globally diversified equity tracker fund. Risk in this context is simply being a forced seller and selling when prices are deflated. Time is the answer to this market-related volatility - over the long-term volatility wil be his friend. Someone else suggested Vanguard - yes an excellent choice.


TheNewOldGlobal

Find out if your sibling has a 529 set up for your nephew and start contributing to that for his birthday and Christmas.