Comments on: Newborn Nephew’s Gift…

By: Choosing a 529 Plan

Choosing a 529 Plan — Sat, 29 Mar 2008 16:40:18 +0000

[...] mentioned yesterday that I’m looking to give my newborn nephew a head start in his education savings. Having gone through a number of options, I decided that a 529 Plan was my best option. [...]

By: Larry

Larry — Sat, 12 Jan 2008 16:39:04 +0000

Don’t do any of those things, invest your money for yourself, make as much as you can, keep it all. Then, when the time comes, you decide to give to the kid what you want him to have and for what purpose you want it to be used. You get all of the benefits and none of the drawbacks.
My grandson is 15, so I set him up a custodail account at Sharebuilder, not for college,not for retirement, but just to share time with him and hope that by the time he is 19, I will have done what was necessary for him to make the right decision. So far, I am making no progress, but we do have time. I only but 50.00 a month in, and 100.00 on birthdays and Christmas. My plan is for him to add any extra money he gets and wants to invest, that has not happend so far, but is a goal. We pull it up on the computer, look at the ETFs, he shrugs his shoulders and says something like ” I don’t understand all that” and after a couple of minutes we move on to somethingelse. Even with such small amounts he now has 4 Vanguard ETFs. Total Bond, Total US Stock, Dividend, and Foreign, pretty good diversification for a 15 year old, something to build on in the future by himself as he grows older. I won’t be out much if at nineteen he buys a motorcycle, and I am always looking for that break through moment when he actually finds it interesting.

By: Art Dinkin

Art Dinkin — Fri, 27 Jul 2007 20:53:12 +0000

Just coming from experience my friend :)

My sister’s second pregnancy resulted in twins. Of course we still had to treat each new nephew as we had our older neice. It was still a joy, but doubling the gifts (and every birthday and December) was initially a bit of shock.

By: Lazy Man

Lazy Man — Thu, 26 Jul 2007 21:47:50 +0000

Good advice. Las Vegas has set the over/under on the total number of likely nieces and nephews to two. Without giving away a lot of detail, my and my wife’s immediate family is quite small. Also I think they are starting to reach the age and point in their lives where kids probably are not likely to be in the picture.

By: Art Dinkin

Art Dinkin — Thu, 26 Jul 2007 21:26:38 +0000

Be careful with what you do. You may become an uncle more than once in your life. Whatever you do make sure it is repeatable for each niece and nephew.

By: Brip Blap

Brip Blap — Thu, 26 Jul 2007 01:18:51 +0000

Don’t set up a 529. I set up some custodial accounts at Sharebuilder and started investing in Vanguard Small-Cap Value ETF (VBR). You lose the tax advantage, but you gain some choice in (a) the investment and (b) the use of the money. My thinking is that it’s a semi-risky investment that might pay off big (in which case, great) or not, in which case no real loss. 529s are great for the mutual fund industry, but I’m still not convinced it’s the best way to save for children’s futures.

And frankly, at the end of the day I’d rather be handing my nieces and nephews part of their first home down payment than their tuition money. Student loans are still easy to come by. Loans for down payments are usurious.

By: Dave

Dave — Wed, 25 Jul 2007 15:41:19 +0000

Teach him “finance” yourself. That’s the best gift of all.

By: MossySF

MossySF — Wed, 25 Jul 2007 15:00:35 +0000

Starting retirement accounts for newborns (or any kid with no income) limits you to only variable annuities. Unfortunately, low-expense VAs from Fidelity and Vanguard have high minimums ($5K) which is steep even for generous aunts and uncles.

By: Paul

Paul — Wed, 25 Jul 2007 14:27:49 +0000

You can invest in any states 529 plan. There are three elite plans which are Utah, Iowa, and New York. Clark Howard also has an honor roll for 529s. You can check it out here

http://clarkhoward.com/shownotes/category/1/34/281/380/

[Editor's note: Thanks Paul, I meant to end the article saying that tomorrow I'd go into 529 in greater detail. As a teaser, none of those three states made my top 2 choices.]