18 year money investment for new baby?

K-2

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My nephew and wife just had a baby boy, first child.
Is there somewhere I can put some money that will grow for 18 years?
Something he can redeem when he is 18 for college, etc .
Any idea how much I would need to "invest" now to get around $1,000 in 18 years?
Or any other ideas?
Thanks!
 

lncoop

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Sure! Start him a 529 college savings plan. You'll have to have his parents open it (SSN, parent signatures, that sort of thing) but then you can fund it. A $50 initial investment from unc would be more than enough to reach the goal you've stated and others can easily contribute any time they want. He should be able to use it for vocational school if he decides to go that way instead of college. There are hundreds of choices but I use Oppenheimer. Here's a link. https://www.scholarsedge529.com/OFI529/ Congratulations on the new nephew and good on you for thinking of the little guy's future!:joyous:
 

rengnath

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My brother and his wife have a baby due in May. I've been thinking about purchasing some silver bars since the price of silver is down. You can purchase a 10oz bar for about $190 online right now. While it might not gain money, it is something unique and will always have value.

Unfortunately bonds have tanked. EE bonds right now have an annual fixed rate of .10%. I'll take my chances on the silver coming up. To put it in perspective, within the past 5 years, silver peaked (very briefly) at almost $50 an ounce in 2011.
 

ihearth2o

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+1 on 529 plan. You don't have to have the parents open it though. Just about anyone can open an account for any child so long as you get all the appropriate info (SSN, DOB, etc) from the parents. My SIL's husband's mom opened 529 plans for my SIL's kids. It's pretty common. You can list yourself or your nephew's parents as the account managers. Ofcourse you'll need their info too. You may just want to make yourself the account manager and on the child's 18th bday, switch the account manager to your nephew and give him the accounts login info.
 

bruceb58

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Sure! Start him a 529 college savings plan.
+1

Even when they bring up getting rid of them someday(like they floated this year), they always claim they will grandfather everyone who is already in them. I don't think they will ever do that anyway.
 

NewfieDan

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In Canada we have RESP. It's a Registered Education Savings Plan. From the sounds of it, the 529 Plan is similar. The contributions are tax deductible and anyone can add funds.

We also have a TFSA. It is a Tax Free Savings Account. All the interest, contributions, and any withdrawals are completely tax free. There is a max contribution of $5500/yr. Depending on the bank, and how the money is invested(self-directed account) there could be huge returns.
 

bruceb58

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Contributions to a 529 are not tax deductible. The earnings grow without being taxed though. Same as a ROTH IRA
 

minuteman62-64

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I'm guessing the $1000 in 18 years is a typo. You won't get a college education for $1000 in 18 years - if you're lucky, maybe a burger :)

Concur with the 529 plan. That's what I'm contributing to for my grandkids.
 

keith2k455

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You may also want to look at whole life. If the kid doesn't go to college, the 529 will get taxed pretty hard.
 

bruceb58

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Last edited:

tpenfield

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A year of college will be about $100K, maybe more, in 18 years or so.

Not sure if you meant $1,000 to start or at the end of 18 years. . ..
 

bruceb58

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I would assume he uses $1,000 as a unit and then multiplies that appropriately.
 

ihearth2o

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Wow, I wish my kids had an uncle that would be willing to kick in $100k for college tuition by the time they are 18. With that said, I read the OP's $1k goal as just that. Whatever he can contribute helps. Let's face it, $1k gift is a still a lot of money. A drop in the bucket for tuition, yes, but it's still a thousand bucks even if it's 18 years from now.
 

keith2k455

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Yes, a 529 can be transferred. Whole life is a decent long term investment, say 30 plus yrs. You can also dabble in funds, but a whole life plan is basically cash.
 

bruceb58

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Yes, a 529 can be transferred. Whole life is a decent long term investment, say 30 plus yrs. You can also dabble in funds, but a whole life plan is basically cash.
Yeah if you like 2% returns. Also, if you die before cashing out, you heirs get the face value of the policy only...no cash build up.

Too bad people get talked into these things.
 
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hungupthespikes

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Please don't try and compare life insurance to any investment plan, it's comparing apples to oranges. imo
Term life is an expense like any insurance, and you hope your family will never need it, and in time you won't be able to afford it. It does go up as you age.
Whole life does reach a point where it will pay for itself and/or grow the face value, etc. Later in life you can cash it out, reinvest or leave it for love ones, but it's a far cry from an investment. But again your not going to lose money on whole life like you can on a stock market gamble or term life.

401's, 529, stock market are all on the positive side of a long happy life. Planning for the future not the lose of life/limb.

Depending where you are in life all have their place for peace of mind, protection of family.

For the OP an investment for a new born is a positive attitude, an insurance policy is a negative, what if attitude and should be avoided for aunts/uncles. imho

huts
 

keith2k455

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A 529 is great for higher education. This is about the best option now, but if they start taxing them a 529 loses appeal
 
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drrpm

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Stocks are the best bet for long term growth. Open a S&P 500 index fund in the baby's name with yourself or one of its parents as the trustee.
 
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