Investment fund for the grandkids???

[mlevimadden]

What mutual or index funds are people liking?

I just do a total market or S&P500 fund for most of my fund purchases. Vanguard are hard to beat for the 0.04% expense ratio on most of them.

VTI/VTSAX is a total market fund
VOO/VFAIX is an S&P500 fund

 

[NevadaMike]

I do not like active Fund managers or commission based financial advisors. This eats up growth unnecessarily and with the timeline you have it will be substantial 30 years from now! We have a trust set up for our kids education and some is 529 as mentioned and some is not based on contribution limits. If you are a set it and forget it guy I would suggest the Vanguard target date funds and let it ride after you talk to them about how you should hold it. Target date funds adjust risk based on when you want it available. Vanguard is also known for some of the lowest fees in the industry and as I mentioned this will result in a substantial increase over 30 years vs paying someone to "manage" your funds.

 

[cornfedkiller]

529's are after tax accounts, so you pay your income tax on the money that goes into it.

Got it! I was wrong in my understanding of it then. Thank you for correcting me!

 

[dubbeltap69]

The only problem with contributing directly to a Roth for young children is they need to have earned income to be eligible to contribute. Definitely not a bad strategy, but not one I’d do as a grandparent without the parents consent and agreement on strategy, since you’re front loading the tax burden.

Thanks for this information. I was unaware of that requirement.

 

[Crghss]

Use Vanguard ETF’s (Vanguard usually has lowest fees)
Spilt between S&P 500 and Tech.
Something like VOO and VGT

Just a general idea but where I’d start.

 

[Marble]

Thanks for the advice thus far. Not interested in a college fun I’m wanting this to be a whatever they want/need when a little older. I like the idea of just opening another investment fund earmarked for them and give them access when they are older.

If you include it in your living trust, it can be on autopilot with you having to do nothing after setting it up. You'll have full control of it, can add to it or withdraw. You can even earn mark a portion of what you already have invested and not even create a separate account.

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[Gman12]

I have a 529 plan for my kids and I also opened up a mutual fund for them as well. I usually contribute money in the account for their birthdays. It is a target date fund where the money is invested more aggressively at first but gets more conservative as they near retirement age. I think their target date is something like 2055. I didn't really intend for it to be for their retirement but more for something like a down payment on their first house.

I will have control over the money and have to approve whatever they want to use it for so they won't be able to use it for a depreciating asset like a car.

 

[Article 4]

There are multiple avenues

• 529 - is great but limited to education spending - can be passed to 2nd child if not full used
• Roth IRA - great idea but money is locked until 59 1/2 unless big penalties are paid - taxed up front and grows tax free
• Annuity - works like a personal pension with nearly guaranteed payouts, can start investing on behalf of the child anytime but money locked until 59 1/2
• Whole life insurance, often overlooked but can create cash value, is nearly tax free and grows for life. The child can assume ownership at 18

 

[Historybuff]

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