Saving for my kid

Morgan Jones14 said:We set up a savings account about 15 months ago for our first kid, and now we’re starting another one for the second 😁. Honestly, it feels like the smartest move right now, especially while the government is still chipping in that 15% match...

If you're banking on the government to save you, you're going to end up broke and bitter.
Learn from other people's mistakes for once...

ambermaker13 said:If you're banking on the government to save you, you're going to end up broke and bitter.
Learn from other people's mistakes for once...

lol here's another one trying to lecture me😬 🙏

ambermaker13 said:If you're banking on the government to save you, you're going to end up broke and bitter.
Learn from other people's mistakes for once...

And who exactly are you trusting? Mutual funds? Your own supposed ability to pick winning stocks? Or do you actually run your own business?

Everyone acts like some kind of Wall Street genius when the market is mooning, thinking they can somehow bail out right before the correction hits... as if that ever works...

I mean, sure, if you're playing the twenty-year long game, that's supposed to "smooth out" the risks, but honestly, it smooths out your returns too. Americans have crunched the numbers and found that sticking with stocks pays off most over the long haul, but that’s based on their specific market dynamics. It doesn't mean you won't get burned; on average, you might not, but that’s cold comfort for the people who lose everything because they were sitting in the wrong seat at the absolute worst time.

So, you can let there be a massive crowd of people who are perfectly fine with a guaranteed return that barely even beats inflation—it's not weird, really, they just have their own way of looking at the math...

Jamie Newman5 said:18 years at 10%?!?

Fine. I'll pull all my cash out of Mexico and Mexico right now and hand it to whoever can guarantee me 10% for the next 18 years! Actually, let's go further... I'll sell the house, the vacation home, everything I own, dump it all into your "guaranteed" 10%, and then just buy everything back on a mortgage at 4.99%. If inflation stays around 3%, I'm looking at a clean 2% profit. Brilliant!

P.S. DM me the name of this fund that pays 10% for 18 years. Thanks.

P.S. The effective rate on housing savings is closer to ten percent. There's no risk (funds are backed by State Farm), the subsidies aren't going to keep dropping forever, and there's a path toward getting favorable loans, which might be worth something to kids one day...

Funds are a decent way to invest, obviously, but unlike housing savings—which is pretty passive and doesn't swing wildly every month—funds are active. They force you to constantly check the ticker, which leads to anxiety when things dip and fake euphoria when they spike.

I'm still sticking by housing savings.

I actually know a fund that hit a whopping 2,850.00% net return in just 15 years and 4 months!

If that isn't a 19.00% CAGR... I don't know what is.

In total, that's about 7,800.00%, or a massive 33.83% CAGR. 😁

Here, check out this link and tell me if you're still surprised...

INSTRUCTIONS:
- For the "fund" option, pick unnamed
- Set the start date to: 01/01/1992
- Set the end date to: 05/30/2007
And then just hit show!

Go ahead and keep giving whatever advice you want...

If you look at it through a rough lens, it seems like things really started picking up right after Canada joined the European Union.

So, basically, there’s zero reason to sweat the returns once we're officially in the European Union.

Mark Sullivan62 said:If you look at it through a rough lens, it seems like things really started picking up right after Canada joined the European Union.

So, basically, there’s zero reason to sweat the returns once we're officially in the European Union.

Not quite! It actually looked a bit rough during that last year before joining...

Anyway, averages are averages, and that 15-year average isn't exactly small!

And honestly, what’s happening post-EU entry is tripping me up a little too. I was totally expecting yields to tank way more drastically—maybe an 8 to 12% drop annually...

- but instead, it's just kind of... off:
Why do you think Victoria can't just follow that same path?
Or take unnamed in New York City, for example—what year are we looking at for them?😁 👍

quietbadger352 said:Not quite! It actually looked a bit rough during that last year before joining...

Anyway, averages are averages, and that 15-year average isn't exactly small!

And honestly, what’s happening post-EU entry is tripping me up a little too. I was totally expecting yields to tank way more drastically—maybe an 8 to 12% drop annually...

- but instead, it's just kind of... off:
Why do you think Victoria can't just follow that same path?
Or take unnamed in New York City, for example—what year are we looking at for them?😁 👍

Look, I don't know, I don't think I ever actually said I believed it was impossible,

if you’ve been following my rants in the chat, I’m mostly staying far away from those funds that hit you with upfront fees, and especially the ones where the returns are pegged to the Euro.

The reality is, I’ve got five different funds in my portfolio right now, and honestly, the pool of future funds I'd actually consider putting money into is getting smaller by the day; so if I want to keep diversifying down the road, I’ll eventually be forced to pick one with an entry fee or one tied to the Euro...

Mark Sullivan62 said:Look, I don't know, I don't think I ever actually said I believed it was impossible,

if you’ve been following my rants in the chat, I’m mostly staying far away from those funds that hit you with upfront fees, and especially the ones where the returns are pegged to the Euro.

The reality is, I’ve got five different funds in my portfolio right now, and honestly, the pool of future funds I'd actually consider putting money into is getting smaller by the day; so if I want to keep diversifying down the road, I’ll eventually be forced to pick one with an entry fee or one tied to the Euro...

See? Even you’re getting "misled" by this website!
KDP in America manages all their funds in US Dollars, which is how they handle contributions too. The fact that they publish comparison data in Federal Reserve dollars is really just for info purposes.

Why would a site like this publish everything in Federal Reserve dollars? They must be the only ones who 👎

What a mess... 😕

There are several different insurance companies out there that offer these kinds of plans for kids. Personally, I think Northwestern Mutual has the best options, and I’m actually planning to start one up for my older son in the next two or three years. The cool thing about their setup is that you basically pay in for about six or seven years, and then the money just sits there growing until the kid turns 18. I guess the actual return depends on how old the child is when you start, how much you put in, and all that sort of thing. To me, the most appealing part is the lump-sum option—I don't have the brochure right in front of me since I'm just glancing through it periodically, but if you were to put in, say, $1,000 during the first year of a child's life, they seem to guarantee more than double that... you should really check their website to see for yourself.

Then you've also got things like State Farm or Allstate, which aren't bad either... I've been looking into them for quite a while now.

As it stands, my kids have that Hypo savings account, where the interest rate is pretty standard, around 4.5%.

Chase is a bit modest for now, but they send out these little kids' newsletters all the time, filled with things like coloring books and comics. They even send birthday gifts directly to your house, or at least that's what I've heard. My son's birthday is coming up soon, so we'll see how that goes.

They also collect points; for every $33 they get a sticker with a little seahorse on it, and once they collect a certain number of those sea horses, they can pick out a prize from the bank. I haven't actually gone in to trade the stickers for toys yet because I want to collect as many as possible—both the sea horses and the seadragons—so eventually, my older son and I will head down to the local branch together.

Since most other banks don't really offer anything extra, it's nice to at least have something. Though, if I'm being honest, all those toys end up being just more clutter for me to trip over on the floor, even if the kids absolutely love it. You know how it is.

Anyway, I'm starting to dabble with mutual funds lately too. I'm taking some of my extra change and adding it to their savings accounts, and once I hit the target amount I've set in my head, I'll make a single lump-sum payment into that Northwestern Mutual plan for my oldest.

After that, I'll probably start figuring out a plan for my younger one.

Oh, I just remembered, I think it was called something like "Kinder"...

Something like that.

neonbear4 said:haha my old lady’s stashing some pennies in a Chase account or something, I think it's just pocket change. She actually started putting money away for me when I was like 12
but my sister got hers way sooner even though she's younger than me
it’s nothing, just small change I can grab in 3 years
just give the kid $100 a month as an allowance and teach them how to save properly

Look, teach them that saved money is real earned money and hand them a copy of Kiyosaki once they hit 16, otherwise they won't even make it through high school. I’ve got a little one myself, and let’s be real—inflation just eats savings alive,
so I’m constantly shuffling my cash wherever I can to stay ahead. I can always go on a diet if I pack on a few pounds, but I want my kid to grow up healthy, educated, and actually understanding how money works.

Thanks, everyone👍

I am planning on setting aside some funds for my kids very soon—roughly $333 per child—to put into a dedicated investment fund,
and once I find myself with a little extra breathing room again, I intend to top it off.
There is something quite appealing about the structure of these accounts where the money stays out of reach until they hit adulthood; it allows me to contribute and then simply let it sit and grow without the temptation to tinker with it.☕

The other day, I received an invitation to be a godmother at a christening, which got me thinking about the perfect gift. It occurred to me that opening a youth savings account for the little one would be a wonderful gesture. Now, I am wondering if it is actually possible to set one up without the parents knowing first, just so it can be a complete surprise. Does anyone have recommendations on which major US bank would be the best choice for this kind of thing?

I'm pretty sure you aren't getting that savings account opened without a parent's signature 👎

As far as I’m aware, the law is pretty clear on this: you can only open a bank account for a minor if you're their legal guardian or a court-appointed conservator.

And I honestly thought I wouldn't be able to pull it off.
Does anyone happen to know of any other options available to me that don't require parental consent, but also aren't just about someone handing me cash in an envelope? What about things like life insurance policies, or maybe a housing savings account, or... something else?

Maybe you should look into opening a long-term savings account in your own name, especially considering how young the kid is, and just start chipping away at it bit by bit...
As for my own situation, I put a portion of the money toward a down payment on a house, $33 I'm contributing to a 401(k), and whatever we’ve managed to squirrel away is sitting in various funds—right now, it's all tucked into a dedicated college savings plan 😁...

I want to start saving up for my little one.
I'm torn between setting up a dedicated college fund or just sticking with a standard savings account.
Does it actually make a difference? Any specific advice or ideas out there?

Thanks.

Mathematically speaking, getting a mortgage makes way more sense right now while the Democratic Party is in power (as I mentioned in my previous thread—the moderator will probably tell you there's no point in starting essentially the same discussion all over again)

PS You have a private message from me sent yesterday...

Just a word of caution regarding any assets held in a child's name... I’ve seen some real drama unfold there—people finding themselves completely stuck, unable to touch a dime without getting the green light from the Department of Social Services. It eventually turned out that you could withdraw funds if they were classified as savings—though, if memory serves, some banks made quite a fuss and gave people a hard time before relenting—but those who had invested in stocks under a minor's name ran into some serious friction. 😁

You might want to look into that.