Well, my infant children have more money than I do. Being that they are much too young to have it and that it will be 15 years before they can spend it, would I be better off just leaving it in a savings account or would I do better to buy some savings bonds?

 

I put mine into a educational trust fund and it will grow until they need it, and as long as it is used for educational use it is untaxed, but it you take any out that is not for education then it is taxed, also you have complete control of it until you decide to give it to them. Just go to your bank and ask about a starting a trust fund.
My grandparents started one for me when I was born and it really helped me through school and getting my first truck.

Hope this helps

 

Both of those choices are pretty conservative, to say the least. I like the college / educational savings plan also, or open up an account with a mutual fund and put it in there.

The good news is you are planning for the future.

Congrats on the baby. Trust me they grow up.

 

I have to agree with Geico266. The savings bonds and savings account are both super conservative choices. The more conservative an investment, the less the rate of return to you or your children. Savings accounts and Savings bonds will more than likely just barely outgrow inflation. If you are looking at a 15 year term on the money, this will help to divert some of the inherent risk of the investments market. But if you looked at it for 18 years or 21 years I think you will be better off in the long run. What child at 15 years of age will be able to make sound financial decisions for their future? Very few. I would look at investing the money in a Growth mutual fund. Meaning the dividends are being invested instead of being paid to you in the form of cash, which will be taxed. As long as you let it continue to grow you are getting the increase in value without having to pay tax on the growth, until it is cashed in.

 

What Geico said. A mutual fund, tax free municipal bonds, or a nice utility stock will return gobs more than savings bonds.

 

Trust is the way to go....You can do so much to control the end use of any funds...The trust would specify where and how the money goes...Even if you passed away...My Dad just set one up for the grandkids....He didnt want the kids to turn 18, get money, then blow it all on junk...The way he has it, no one can use it for anything but education...In fact, you can set up a trust so that the money can only be used for a specific school....

Funds in the trust will be invested in any number of securities: stocks, bonds, mutual funds, T-bills, cash, even real estate....It all depends what you want your oney to do


My money is with Edward Jones...I have an IRA that has returned 16% over the last 3 years....Most savings accounts gain like 1% interest....Of course there is more risk in stocks, etc, but the growth potential is huge...Most mutual funds are safe.....Best bet is to see an attorney and a financial manager of some type...They wont do you wrong

 

too bad you can't pick their future school, you could start paying now at todays rates before the raise them for 18 years or so..... that way when they get there they would only have about 15 years of payment left to make..........

 

To heck with savings. Spend it now. Let them get a job and go to college after you boot them to the curb when they turn 16.

 

My grandpa started a college trust fund for me when I was born. All I really know about it is that it pays for tuition, books, rent, food, is invested in the stock market very wisely, and is out of my reach until I graduate. I'm very, very, very grateful that my grandpa did that for me. The account also paid for my truck. It was a very wise move indeed. He also set one up for my sister. I recommend doing that with your money instead of putting it in a savings account.

 

Well, I'd hate to put it all in one of those Education funds and then the kids decide not to go to college. Then it becomes a hassle to get the money. Unfortunately nobody did this for me so I ended up not going to college. Luckily I decided early on to bust my hump no matter where I worked and I now make as much as many college grads doing the same job. I don't really want to risk anything, I just want to do more than just let it sit in the bank making .4% interest. I appreciate all the replies. I think it's time I switched some of my own stuff around too. I got really conservative a couple years ago when my portfolio continually lost money each period. Time to Let It Ride......

Thanks again...

 

Here's another idea......



Start recycling wheels and tires....By now you have about 3 semesters of Harvard saved up

 

Heck, I could put two kids through college with what I've wasted on upgrading perfectly good vehicles ever since I started driving! I wish I could just get a vehicle and be happy with it but what fun is that????

 

Here's a thought.

A guy I worked with bought a house near the university he attended. This was years ago and he got a good price. Rented the house out each year to college students.

When his oldest got to college age, his son went to the same school and stayed in the house rent free. Couple years later, he sold it and the money was used to pay for all the college expenses.

Real estate: They're not making any more of it.

 

Man if I added up what I've spent on retarted trucks and cars and other crap, man I could be living like a freaking king right now. You would think one day I would learn, guess I must have ADHD What were we talking about?



~Nick

 

I have a few things setup but the ones I have setup with Northwestern Mutual http://www.nmfn.com/ is structured the best. I deal with a CFP (certified financial planner) and she knows her stuff. You can share what your goals are and she gave us several scenarios to meet those goals. Best of all, her time was free and she comes by the house when we want to make sure we're on track and to record any changes like income, etc. so we can maintain the same track. You can't go wrong with a consultant to help you through making decisions like these. Best thing we ever did.