Investment Account for Child
My wife and I want to set up an account for our daughter (she’s 3 years old) that accrues value over time (more than a checking account) so that as gifts come in (birthday money, gifts from grandparents, etc.) she can obtain more value over time. As she gets older and we eventually transition the account to her (possibly high school or college) we can sit her down and educate her on the topic of compound gains and how saving money and investing it can lead to long term financial independence. Thanks!
Terry Says
Well, that is NOT the way to save money for a child. YOu need to open a 529 college savings account for her — money to grow tax-free for college, and not impact financial aid if necessary at that me. Read this:
https://www.terrysavage.com/the-gift-of-college-529-plans/
Grandparents can contribute as well. It’s the way to grow the money.
When she gets older, you might want to explain that money doesn’t grow on trees — or come spitting out of an ATM! But for long-term savings, a 529 plan is the answer.
