Question:

I would like to start investing money for my children in the future, how would I do this?

by Guest58854  |  earlier

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I am 23 years old, single, and I have 2 children. I work a good job, however, I don't have that much money to invest, but I would like for my children to have a better future than I did. Any suggestions?

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  1. it may take long but use savings bonds


  2. I would invest in their future with a college education.  A 529 college savings plan or a Coverdell ESA would do the trick.  You would have to read about them to decide which one is best for you, but the earlier you start saving for them the better.

  3. give it to me and I will take care of it :-))

  4. State-sponsored 529 plan is your cheapest route.

  5. There are many questions you would need to answer before anyone could give you good, relevant information. Let me explain:

    You need to provide the objective of your investment for your children: Is it to pay for their tuition or to start them a retirement fund or is to help them pay for their first home, etc.

    Your answer will determine what investment option is your best bet.

    Moreover, what investment options do you have available to you? Does your company sponsor a 401k plan? If not, there are multiple other options you could use, 529 plans, IRA's, Roth IRAs, and so on.

    Do some more research to provide yourself a foundation - it will help guide you through the investment process.

  6. Try contributing a set amount each month automatically.  I try and use the money my children get as presents for birthdays and other holidays since this is really their money.

    One of the best investments you can make for your children is for their education.  Look into college savings plan such as state sponsored 529 plans.  One place to look is at fidelity.com.  You do not have to contribute to your state's plan.

  7. Do not do savings bonds.

    If it is for college so they aren't DROWNING in Student loan debt one day, then an ESA (Education Savings Account) Is your best option.  You can save $2000 per year, per child and it grows tax free.

    If it isn't necessarily for college, I suggest a good growth stock mutual fund with a good 10-15 year track record (these generally average 12% and there is no penalty for early withdrawal.)

  8. UM.....A SAVINGS BOND!!!!!!!!!!

  9. Investing for your children can take on many forms. There is the riskier share trading or spread betting but, in view of your circumstances you give the impression you don't have much money you could afford to lose. On that basis, the best thing would probably be Savings bonds of somekind where the money is stored away for years to collect interest though you cannot take the money out within a certain period. My parents did this for me and they worked very well.

  10. Since you have 2 kids, it's a good bet that at least 1 will go to college, so a 529 is a good idea.  The earnings are tax free if spent on education.  529's do have 1 caveat.  If not spent on education, the earnings are taxed as normal income when withdrawn AND penalized by 10%.  

    I'm providing a link to the best 529 guide out there provided by Clark Howard, a syndicated radio consumer advocate.  On these, you usually sign up directly with a state plan (not necessarily your state of residence) and not through a broker.  You save fees and money this way.

    Another good way to save for them and not risk the 10% penalty, is by saving within your Roth IRA.  If you need the money for them, you can withdraw all of your contributions (not earnings) without penalties or taxes.  If they don't need it,  you've got extra money for your retirement.  Pretty slick, huh?

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