A few weeks ago, I wrote an article about whether I should invest my babies’ money. I think the general consensus was that I should, especially because I’ll personally make up for any losses. (Don’t you wish all investing companies were as cool as me?)

So the question then becomes, where do I invest the $1000? Ideally, I’d keep the expense ratio as low as possible and still have a diversified fund. If it were more money, I’d open up a brokerage account and buy Vanguard’s Total Market Index. However, for less than $1000, the commission to buy would be around 1%. I suppose that isn’t the worst thing in the world. At least it would be a one-time fee. After that, it would be Vanguard’s typical low commissions.

Alternatively, it appears as if I could open up an account at Vanguard itself and buy a mutual fund perhaps avoiding the commissions.

I’m probably over-thinking the commission. While 1% seems like a lot, in reality it is $10, which is pretty tiny, right? Perhaps not. He may get $100 to $200 on a birthday or something, which means that money would have to go to a savings account unless I want to pay a 5-10% fee via commission to buy more shares. That mutual fund is looking better and better.

Mutual funds just seem weird to me as I haven’t invested in them in probably more than 15 years (outside of a 401K).

Another idea is to go with Lending Club. As I was writing about yesterday, it occurred that me that it could be a good fit. The only problem is that I’m not sure my wife would be on-board with such an unusual idea. Maybe I can convince her with the humorous concept that a two year old would be lending money to a bunch of adults with financial problems.

Even if I could convince here, I’m not sure that Lending Club will let a two year old open an account. It does look like there’s a custodial account. I’ll be the first to admit that I don’t know much about Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) types of accounts. However, these don’t seem to be a fit, since the money is owned by the children, it isn’t a gift from me to them.

I know I’m all over the map with this topic. That’s why it is perfect for an “Ask the Readers” article. Got any advice to point me in the right direction?