I like UTMA since the amount a parent/guardian can put in is unlimited, and better ETF selection choices. It also helps if your kid doesn't want to go to college out of high school and starts their personal investing journey early. There is also the option to convert it to a 529 plan at 16 years old if they do plan on attending college.
I have a Masters degree, but I honestly feel that college is not the best path to take for most people. As such, I have to politely disagree with your belief (discussed around the 14 minute mark) that the Custodial Roth IRA is the best option. I think UTMA makes the most sense due to the wide array of investment options, unlimited contribution amount, and the resulting larger snowball created through compound interest. Overall, excellent video! Just wamted to play devil's advocate a bit due to our differences of opinion on the importance of upper education. Stay blessed! 🙏🏼☝🏼
I found an article on this and read it to my nephew at seven, then nine, then twelve. At thirteen he is ready to listen and I am happy for that as his household lacks financial literacy.
Thanks Rose! I have a 529 for both my kids I set up when they were born. I told our parents, buy them a matchbox car and contribute to their 529 for their birthday and xmas.. They are all set! amazing how much the accounts grow as time goes on!
Thank you for the info Rose! I don't see why anyone would do a Roth IRA for their kids, unless all other options are already completed. $ at the beginning of your career is exponentially better than $ at the end of your career. If you are teaching financial literacy, you should be able to trust your kid at 18, 21, or 25 (UGMA/UTMA transfer depending on state). I know the fad is to scrimp and save until you retire, but I am still of the old school philosophy of enjoying every part of your life and retiring wealthy. Of course, not all kids will have the early opportunities to start a business or make take advantage of other early opportunities... but why would you hamstring them to start with until they were 59.5? With that startup capital, more opportunities are possible, but at worse, they can use that money for expenses and put more of their earnings towards their 401K/Roth IRA if they need a tax break. If you are really raising financially aware kids, they will be able to put your custodial account to far better use at 18, 21, or 25. The 529 is a good idea, as it is locking in funds for a specific purpose. You can invest the money yourself for sure, but it is a great way to earmark that money. Plus, the 529 rules require the fund to true up your account if college rates don't keep up with expected growth. We planned to pay for 2 years worth of credits for each kid so they would have to work a little... college rates grew slower than expected, so they now have 3.5 years worth of credits paid for each and we only had to make monthly payments for less than 1/2 the expected duration. UGMA/UTMA is what we have done in addition to a 529 for our kids. With both the 529 and the UGMA/UTMA, anyone can give to the accounts. Our family has made contributions to both and now we teach our kids about stocks and investing with their own accounts. Additionally, if you tell your kids "this is your money when you retire in 50 years" vs. "this is your money when you graduate in 10 years" is a far better incentive for them to learn about finance. If you are able to put money away in a 529 and have more for another option, you are usually above the Coverdell ESA limits, so that's why we did the UGMA/UTMA. None of the options are wrong, and feel very blessed if you can contribute to any of them for your kids. My personal feelings about money early on, is just that... my opinion. I am just glad I saved my money and bought a home years before my peers, as it was 1/2 the price they had to pay for the same home and I wasn't paying rent. The equity allowed me to get a HELOC and buy a larger home for my family and rent out my smaller home before most others even bought their 1st home. Again, my perspective, as I live in a booming city, where home prices increase far faster than people's earnings.
We cannot presume teachers know enough to be helpful. Maybe we could teach them 1/3 for investing, 50% for necessities, 1//6 for fun. After they have built an emergency fund.
@@actnowordreamon6774 I know a number of teachers. They have little financial savvy. Perhaps if we could have a central trainer at the school districts responsible for educating them on a broad range of financial topics so they could give an overview. But this is the same group of people who tell us George Washington said “I cannot tell a lie.” And yet he was one of the more savvy Generals in US history when it came to misdirection ploys during the revolution. Either the cannot tell a lie story never happened or he very quickly learned how to lie after taking command.
I started with my son when he was just shy on his 1st birthday. He have NYLife (mutual/ETF) that his grandmother is doing for him. He also have a college fund investment (529 plan). Also he has few stocks like Disney, Tesla and Corsair. He be turning 3 in few months. He already learned to go through my pockets or find loose coins in the house and put it inside his piggy bank (It's almost full). I was more focus on my son future and I kind of drifted away from being serious in my own retirement. Now his mother took over on our son investment so I can focus on my own retirement investment (I have around 15 years left). Thank god I have no bills except the mortgage and utility's. Now I'm already thinking about paying off the mortgage early and get another property so I can take the previous one and turn into a rental.
Definitely agree! My Dad started UTMA accounts for my kids after my Mom died. They came to me after he passed, and now that they are teenagers, we are actually discussing what is in there, and they have some say in what I buy with the dividends. One has started adding on her own, and now that she is thinking about her license, she is using dividends to build her emergency fund faster.
Easily the most helpful video on the subject. Thanks a bunch. Definitely doing a 529 now for my toddler and matching the Roth when they reach working age
This is actually my first time here. Rose makes the best content, you're such an inspiration. I opened a Roth/IRA account for each of my kids(3) on their 10th birthday and now they are very glad with their weekly return. They are able to buy their needs without them disturbing either me or my husband. I'm happy for them
You're a very good mom. I have a 6 and 4 years old kids and to be sincere I have not considered all of this as I was not taught about lnvesting from my parents and I want to pass that give to my kids
Hey Rose! They really should have financing classes back in elementary school! I’ve started my 2 teenage sons since they were 5. It was so tough not giving in but they need to learn between wants and needs!! Great topic btw!
Omg!!! This video just came in at the right time. My best friend is having a baby in the next couple of months. We were talking about her baby’s future. This video will help us plan for this baby’s future. Thank you for making this video.
Thank you so much for this! I’ve been wanting to set up accounts for my children but had no idea how. I just recently found your channel and it’s been amazing. Thank you!
Rose - excellent! One additional comment about Roth IRAs. The principal is always available without penalty. Hence it can be a good emergency fund. Not that I'd share that with the child. Keep up the amazing content!
I think this is important to note because many feel like they don't want their child waiting till 59 1/2 to withdraw that money but they can withdraw the contribution just not the gain if you get the a 529 its possible they may not attend college and with the ugma they could possibly blow it if their irresponsible atleast with the Roth they can see what they have to look forward to and if push comes to shove they can pull whatevers been put in.
True. And very important because it really would be better if they can start using the money while they’re younger than wait till almost 60. All contributions(principal) can be withdrawn anytime without penalty.
I’ve researched this same dilemma and I’ve came to the conclusion that if you’re 100% sure your child will go to college, than a 529k is best. But IMO, in any other scenarios, a low cost index or mutual fund in the parents name is best. Yes, you have to pay tax on it, but at least you won’t pay a 10% penalty if the withdrawals aren’t going to eligible education expenses. I don’t have a crystal ball to see if my child will have the desire to go to college and I won’t force them. I also don’t like any sort of custodial account that gives the child immediate control of the account once they become legal adults. You’re relying on their good faith and smarts to leave the money alone. But what if you don’t get along with them when they become and adult? Sure you’ll have to pay a penalty for withdrawing on a Roth IRA before retirement but young adults do stupid things and don’t care. With a low cost index or mutual fund in your (the parents) name, you maintain full control of the account and can award it to your child at the age you see fit and the account remains flexible.
@@truthandbeautyco A great one is Vanguard's VOO index fund. It mimicks the S&P 500. Historically it has returned 10% annually. It also has a low expense ratio 0.03. UA-cam the fund.
Thanks for the easy to understand explanation. I just had my first child in January, so I'd love to hear more about 529 accounts. After doing a little research I opened up a 529 under my own name as soon as we decided to start trying to get pregnant last year. In hindsight I wish I had thought to do that about 10 years earlier.
I’m a small business owner and my 15 yo wants to help me with it. Once I learned about custodial Roth IRA I got really excited and am currently looking where to begin 😀 Thank you for your content!
Rose, talk about perfect timing. I literally emailed my tax advisor yesterday regarding custodial account benefits. Thanks for providing us with invaluable knowledge.
Great video, thanks! I have UGMA/UTMA account for my young kids because it's their own money that would otherwise be sitting in the bank not doing anything. This way it teaches them first-hand about investing from a young age without any strings attached such as withdrawal restrictions. And they hopefully will not withdraw unless for a future house down payment, if they appreciate what the investment benefits do for them. Good life lessons. Wish my parents taught me about investing when I was a kid.
Im stuck between this and the Roth for kids. The advantage of the ugma is no withdrawal penalty downfall may be that they blow it. Roth advantage is tax break and set them up for their own retirement however downfall is can't touch it until 59 1/2 ....smh I wonder can they take contribution amounts just not gains like a regular Roth for adults.
@@vickyy.9880 Why not create both for them? The Roth really sets them up for tax free growth, but probably somewhat uninteresting to kids. The brokerage account is more tangible and easier to appreciate.
Great video and very informative as always. I opened my kids UTMA account from their 1st birthday money and in very happy with the return but I didn’t know that it could affect their financial eligibility later. Glad I learned about it now so I can roll it over to 529. We like the no restrictions on UTMA but if it affects some eligibility then it’s best to roll it over.
Linking this video in the description of our ‘Which Junior ISA?’ video as our subscribers in the US have asked for more details and this is the best, most comprehensive one I’ve found on here. Thanks for such a detailed video 💖
Hi Rose, please do a 529 plan video. Thank you in advance! I have 3 children under 6 who are very close in age and I really want to know if it is wise to have an account for each of them or if I have other options which are better suited for our situation. Thank you for making these videos! You inspire me
We have the same in the UK. It's called "Junior Stocks and Shares ISA". There's a generous annual limit and it's all tax free. Do not go for the "cash ISAs" you definitely want to be able to invest the contributions.
Thank you for the information! I have a 3 year old and have been seriously considering all of this as I was never taught about investing from my parents and I want to pass that give to my daughter. Thank you again!
Thanks Rose! You’re an awesome teacher. So clear, concise and straight to the point! I’ll open one of these for my 5 year old son this year. Thanks again, Rose!
Thank you, Rose! This is a great video and very helpful. This is a good breakdown and explanation of all these different account types. I have a UGMA/UTMA account for my son that was started a few years ago thanks to a gift from my father-in-law. My son now has more assets in his account than I have in my IRA. I seem to do better with his money than my own! Lol!
I just open 529 account yesterday for my newborn. And a normal brokerage account for her savings and investment. Thank you so much for all the hard work you put in this channel.
Been watching you for a while now love the content still! I opened up UGMA/UTMA accounts for my kids last year so I'm glad to see this video and boost my confidence that I did the right thing. They are 8 and 5 so plenty of time to teach them how all this works! :)
It's too risky. Open a Roth ira. 529 had to be used for college while Roth can be used for anything. What happens if your kid doesn't want to go to college after high school? 529 you will have to pay a hefty penalty to pull out the money when your kids won't go to school.
Most likely Kids this days don’t think that school system is failing them so most likely kids going to have business or something. Internet related like a app So 529 is not really. Worth it but if want you can do both of you want Roth IRA / 529
Caveat on Kid Roth IRAs: If the limit on contributions is tied to the child's Earned Income, I'm guessing that had to be income declared on a tax return for the IRS. A lot of babysitting, lawn mowing, dog walking money is often not declared, and thus probably won't be eligible for IRA contributions.
If you invest $2,545 into the S&P, then assuming a 10% annual rate of return, your child at the an early retirement age will be a Million plus rich, excluding every other income channeled to this. We need to invest much more.
I opened up brokerage accounts under my name for kids. I was thinking to keep the account under my name and transfer those accounts to them in the future. (maybe for their house downpayment). I know im not getting any tax benefits but it gives full control until I decide when to hand over the money. I hope this works out lol
Has anyone set up a UTMA for their kid and not told them about it and once they’ve reached an age where you felt like they would be responsible with it you were like “SURPRISE!”?
When I have my nephew in the car on a drive we pick up a real estate magazine and then he picks a house and we have to figure out the job required to make the payment. Then we talk about insurance, maintenance and utilities. I'm planting seeds.
Final point: Great Video: my grandson picked his own stocks (Disney) he likes the movies, Pepsi, he likes Doritos, Microsoft, he likes Mojaang, Apple, he likes his IPad, and Roblox, he likes the gaming app. Oh, and he’s up 15% in 2 months.
@@actnowordreamon6774 I am not kidding. We talked about things he liked. Who owns Mojaang he said I looked it up and said Microsoft. He said I want to own some of Mojaang. On Roblox, he specifically asked me to buy it, but the IPO hadn’t happened yet.
Hello Rose, very helpful information I can pass on to my siblings and maybe my future child/children. Please tell me where you got the dining set behind you.
Good video! I appreciate that you are calling out the “catch” with custodial type accounts. I personally don’t see the catch (parent not having control over the funds) as being worth it. From my perspective, It is better to open a separate brokerage account in your name/living trust name, Nick name it as XYZ College Fund so you don’t touch it, invest in diversified tax efficient investments and then designate the account to the child in your living trust (including who will take control of it if you pass away). Despite teaching kids the right thing, it is rare that an 18 yo can prudently handle getting a lump sum that they can legally do anything they wish with, myself included at that age...
@Investing With Rose Your welcome. I don’t have issues with trading. I trade A lot and used to work in investment management and understand how the small trading firms make money so have only dabbled in firms like RH to understand their impact on user experience.
This would be equivalent to just getting your kid a Roth ira correct except it will be a a taxable account. Will they be able to withdraw at anytime in the taxable brokerage account or is their a 10 percent penalty along with being taxed for capital gains?
Hi Rose, I made over $100,000 in daytrading in 2020. Have to pay about $37,000 in total taxes (Fed + CA), can you make a video on creating a LLC or other alternative? A youtube video suggested that doing a LLC, you can avoid some taxes. Your videos explain clearer. Also what does opening an LLC entails in addition to working a 8-5pm job? How much work to monitor a LLC? Thank you!
Love this. Totally how I think. Got all my nieces, nephews, brothers and sisters to open Fidelity accounts and contribute. Now, I just need my 2 year old to have earned income for a custodial Roth. Haha.
So you can't contribute anything into the Roth until your child has some sort of earned income? I was just thinking I could contribute long as it isn't over 6k year. My son isn't even 1 yet but I would love to start putting back for him. Is it more feasible to just do a taxable account and have a trust?
I like UTMA since the amount a parent/guardian can put in is unlimited, and better ETF selection choices. It also helps if your kid doesn't want to go to college out of high school and starts their personal investing journey early. There is also the option to convert it to a 529 plan at 16 years old if they do plan on attending college.
Oh, I like the option of converting to a 529 plan. Is there a fee/taxes to convert? Hmmm
@@Luckyboyee777 It varies by broker, but with Charles Schwab I wasn't charged.
Isn’t taxable??
I have a Masters degree, but I honestly feel that college is not the best path to take for most people. As such, I have to politely disagree with your belief (discussed around the 14 minute mark) that the Custodial Roth IRA is the best option. I think UTMA makes the most sense due to the wide array of investment options, unlimited contribution amount, and the resulting larger snowball created through compound interest.
Overall, excellent video! Just wamted to play devil's advocate a bit due to our differences of opinion on the importance of upper education.
Stay blessed! 🙏🏼☝🏼
Giving your children the power of compound interest early in life is an incredible gift.
I found an article on this and read it to my nephew at seven, then nine, then twelve. At thirteen he is ready to listen and I am happy for that as his household lacks financial literacy.
Mine was just born and I am putting $200 in monthly. $100 from dad and $100 for mom.
The fact that UGMA/UTMA accounts may affect your child's financial aid eligibility is an important consideration I wasn't aware of. Thanks Rose!
Yeah seriously
@@actnowordreamon6774 Please enlighten.
It’s best to start them off early!!! I wish I started earlier than I did
Thanks Rose! I have a 529 for both my kids I set up when they were born. I told our parents, buy them a matchbox car and contribute to their 529 for their birthday and xmas.. They are all set! amazing how much the accounts grow as time goes on!
I don't even have kids yet and I'm already thinking about this😅
Love your content Rose!
I don't have kids yet but thinking about doing this for my younger sister (13 years old)
Started a UTMA for my 6 year old last year. She's 7 now and has more money than me!
awwww, I'm a mother of 3, I'm wondering how much you put monthly
@@pa1986ful I put 250 each month
I did the same last year for both of my girls (6 & 4), one of the best decisions I've ever made.
If you dont mind me asking, what kind of investments did you put in since the risk tolerance can be pretty high for the long run
@@glegaspi510 I just put it in an index fund on fidelity (FNILX)
Thank you for the info Rose! I don't see why anyone would do a Roth IRA for their kids, unless all other options are already completed. $ at the beginning of your career is exponentially better than $ at the end of your career. If you are teaching financial literacy, you should be able to trust your kid at 18, 21, or 25 (UGMA/UTMA transfer depending on state). I know the fad is to scrimp and save until you retire, but I am still of the old school philosophy of enjoying every part of your life and retiring wealthy. Of course, not all kids will have the early opportunities to start a business or make take advantage of other early opportunities... but why would you hamstring them to start with until they were 59.5? With that startup capital, more opportunities are possible, but at worse, they can use that money for expenses and put more of their earnings towards their 401K/Roth IRA if they need a tax break. If you are really raising financially aware kids, they will be able to put your custodial account to far better use at 18, 21, or 25.
The 529 is a good idea, as it is locking in funds for a specific purpose. You can invest the money yourself for sure, but it is a great way to earmark that money. Plus, the 529 rules require the fund to true up your account if college rates don't keep up with expected growth. We planned to pay for 2 years worth of credits for each kid so they would have to work a little... college rates grew slower than expected, so they now have 3.5 years worth of credits paid for each and we only had to make monthly payments for less than 1/2 the expected duration.
UGMA/UTMA is what we have done in addition to a 529 for our kids. With both the 529 and the UGMA/UTMA, anyone can give to the accounts. Our family has made contributions to both and now we teach our kids about stocks and investing with their own accounts. Additionally, if you tell your kids "this is your money when you retire in 50 years" vs. "this is your money when you graduate in 10 years" is a far better incentive for them to learn about finance. If you are able to put money away in a 529 and have more for another option, you are usually above the Coverdell ESA limits, so that's why we did the UGMA/UTMA.
None of the options are wrong, and feel very blessed if you can contribute to any of them for your kids. My personal feelings about money early on, is just that... my opinion. I am just glad I saved my money and bought a home years before my peers, as it was 1/2 the price they had to pay for the same home and I wasn't paying rent. The equity allowed me to get a HELOC and buy a larger home for my family and rent out my smaller home before most others even bought their 1st home. Again, my perspective, as I live in a booming city, where home prices increase far faster than people's earnings.
Unfortunately investing isn't taught in school or by parents who don't know how, and the cycle continues. Break the cycle! Learn!
We cannot presume teachers know enough to be helpful. Maybe we could teach them 1/3 for investing, 50% for necessities, 1//6 for fun. After they have built an emergency fund.
@@actnowordreamon6774 I know a number of teachers. They have little financial savvy. Perhaps if we could have a central trainer at the school districts responsible for educating them on a broad range of financial topics so they could give an overview. But this is the same group of people who tell us George Washington said “I cannot tell a lie.” And yet he was one of the more savvy Generals in US history when it came to misdirection ploys during the revolution. Either the cannot tell a lie story never happened or he very quickly learned how to lie after taking command.
I started with my son when he was just shy on his 1st birthday. He have NYLife (mutual/ETF) that his grandmother is doing for him. He also have a college fund investment (529 plan). Also he has few stocks like Disney, Tesla and Corsair. He be turning 3 in few months. He already learned to go through my pockets or find loose coins in the house and put it inside his piggy bank (It's almost full). I was more focus on my son future and I kind of drifted away from being serious in my own retirement. Now his mother took over on our son investment so I can focus on my own retirement investment (I have around 15 years left). Thank god I have no bills except the mortgage and utility's. Now I'm already thinking about paying off the mortgage early and get another property so I can take the previous one and turn into a rental.
Definitely agree! My Dad started UTMA accounts for my kids after my Mom died. They came to me after he passed, and now that they are teenagers, we are actually discussing what is in there, and they have some say in what I buy with the dividends. One has started adding on her own, and now that she is thinking about her license, she is using dividends to build her emergency fund faster.
Easily the most helpful video on the subject. Thanks a bunch. Definitely doing a 529 now for my toddler and matching the Roth when they reach working age
This is actually my first time here. Rose makes the best content, you're such an inspiration. I opened a Roth/IRA account for each of my kids(3) on their 10th birthday and now they are very glad with their weekly return. They are able to buy their needs without them disturbing either me or my husband. I'm happy for them
Unfortunately lnvesting isn't taught in school or by parents who don't know how and the cycle continues. Break the cycle!
My son will be 7 next month and I've been thinking about how I can set them up for greatness. Honestly you're a good mother ❤️
You're a very good mom. I have a 6 and 4 years old kids and to be sincere I have not considered all of this as I was not taught about lnvesting from my parents and I want to pass that give to my kids
I want them to be able to pay their fees like yours do. I don't want them to get dinged on taxes. Can you please share some tips please?
@@oliinvestiert3060 Thanks dear, you're also a good mother by trying to gain some tips on how to make their life easier for them okay👍
I always insist my 5 year old saves 20% of what she earns at the sheet metal factory
I do the same when mine gets home from the salt mine.
lmaooooo... not Rose liking this comment i-
@@jarc492 a nickel an hour’s good money for an 8 year old who skips school.
@@michaelswami that's just good parenting 👏
😂😂
Hey Rose! They really should have financing classes back in elementary school! I’ve started my 2 teenage sons since they were 5. It was so tough not giving in but they need to learn between wants and needs!! Great topic btw!
My first kid is due this August and I can't wait to start contributing to her accounts!
How? Hey keep talking me I need w2 from a 14 month old
@@erikahernandez3848All they need is an SSN which should be issued within a few weeks of birth
Omg!!! This video just came in at the right time. My best friend is having a baby in the next couple of months. We were talking about her baby’s future. This video will help us plan for this baby’s future. Thank you for making this video.
Thank you so much for this! I’ve been wanting to set up accounts for my children but had no idea how. I just recently found your channel and it’s been amazing. Thank you!
Rose - excellent! One additional comment about Roth IRAs. The principal is always available without penalty. Hence it can be a good emergency fund. Not that I'd share that with the child.
Keep up the amazing content!
I think this is important to note because many feel like they don't want their child waiting till 59 1/2 to withdraw that money but they can withdraw the contribution just not the gain if you get the a 529 its possible they may not attend college and with the ugma they could possibly blow it if their irresponsible atleast with the Roth they can see what they have to look forward to and if push comes to shove they can pull whatevers been put in.
True. And very important because it really would be better if they can start using the money while they’re younger than wait till almost 60. All contributions(principal) can be withdrawn anytime without penalty.
I’ve researched this same dilemma and I’ve came to the conclusion that if you’re 100% sure your child will go to college, than a 529k is best. But IMO, in any other scenarios, a low cost index or mutual fund in the parents name is best. Yes, you have to pay tax on it, but at least you won’t pay a 10% penalty if the withdrawals aren’t going to eligible education expenses. I don’t have a crystal ball to see if my child will have the desire to go to college and I won’t force them. I also don’t like any sort of custodial account that gives the child immediate control of the account once they become legal adults. You’re relying on their good faith and smarts to leave the money alone. But what if you don’t get along with them when they become and adult? Sure you’ll have to pay a penalty for withdrawing on a Roth IRA before retirement but young adults do stupid things and don’t care. With a low cost index or mutual fund in your (the parents) name, you maintain full control of the account and can award it to your child at the age you see fit and the account remains flexible.
So would this be considered a regular taxable account or Roth ira
What is the name of the accounts that are low cost index/mutual funds?
I'd like to know what to look for my daughter
@@truthandbeautyco A great one is Vanguard's VOO index fund. It mimicks the S&P 500. Historically it has returned 10% annually. It also has a low expense ratio 0.03. UA-cam the fund.
Please do the 529 and paying for college video! 😊
Yes please Rose..I want to know more about 529. Thank you!
Thanks for the easy to understand explanation. I just had my first child in January, so I'd love to hear more about 529 accounts. After doing a little research I opened up a 529 under my own name as soon as we decided to start trying to get pregnant last year. In hindsight I wish I had thought to do that about 10 years earlier.
I’m a small business owner and my 15 yo wants to help me with it. Once I learned about custodial Roth IRA I got really excited and am currently looking where to begin 😀 Thank you for your content!
Rose, talk about perfect timing. I literally emailed my tax advisor yesterday regarding custodial account benefits. Thanks for providing us with invaluable knowledge.
Great video, thanks! I have UGMA/UTMA account for my young kids because it's their own money that would otherwise be sitting in the bank not doing anything. This way it teaches them first-hand about investing from a young age without any strings attached such as withdrawal restrictions. And they hopefully will not withdraw unless for a future house down payment, if they appreciate what the investment benefits do for them. Good life lessons. Wish my parents taught me about investing when I was a kid.
Im stuck between this and the Roth for kids. The advantage of the ugma is no withdrawal penalty downfall may be that they blow it. Roth advantage is tax break and set them up for their own retirement however downfall is can't touch it until 59 1/2 ....smh I wonder can they take contribution amounts just not gains like a regular Roth for adults.
@@vickyy.9880 Why not create both for them? The Roth really sets them up for tax free growth, but probably somewhat uninteresting to kids. The brokerage account is more tangible and easier to appreciate.
Great video and very informative as always. I opened my kids UTMA account from their 1st birthday money and in very happy with the return but I didn’t know that it could affect their financial eligibility later. Glad I learned about it now so I can roll it over to 529. We like the no restrictions on UTMA but if it affects some eligibility then it’s best to roll it over.
Could you explain what you mean when you say affect their financial eligibility?
@@vickyy.9880 She explains at the @15:11 mark
Quickness's question: Does my son have to taxes if we just buy and sell anything in his UTMA account? thanks.
@@AidanAkhmetov yes, you will need to file your son’s taxes in the year that you sell from his UTMA account.
Yes, Rose! please making paying college video
Appreciate your review,do you experience difficulty Trading?Textme±1 7 7 4 6 4 3 0 5 9 4
@@investingwithrose1839 stop using her name for scams, so annoying
How did I miss this video? Thank you Rose! I love all of your content!
Linking this video in the description of our ‘Which Junior ISA?’ video as our subscribers in the US have asked for more details and this is the best, most comprehensive one I’ve found on here. Thanks for such a detailed video 💖
Hi Rose, please do a 529 plan video. Thank you in advance! I have 3 children under 6 who are very close in age and I really want to know if it is wise to have an account for each of them or if I have other options which are better suited for our situation. Thank you for making these videos! You inspire me
Rose， your video is EXACTLY what I am looking for. I leaned so much. Your comparison and explanations are so clear! Thanks!
We have the same in the UK. It's called "Junior Stocks and Shares ISA". There's a generous annual limit and it's all tax free. Do not go for the "cash ISAs" you definitely want to be able to invest the contributions.
Thank you for the great video.
We opened utma/ugma for our 8 and 4 yr old boys last year.
This is so informative! I am looking to open my kids accounts. Didn’t know where to start until now :)
Love you hair! 😍thanks for all the tips!
Really appreciated this video. Put a lot of my questions in perspective.
This information is perfect for future parents 😍
Thank you for the information! I have a 3 year old and have been seriously considering all of this as I was never taught about investing from my parents and I want to pass that give to my daughter. Thank you again!
Great topic rose.... this is the kind of info we arent taught in school but everyone should know.
Thanks but I haven't worked my way up to crypto yet
Thanks Rose! You’re an awesome teacher. So clear, concise and straight to the point! I’ll open one of these for my 5 year old son this year. Thanks again, Rose!
Thank you, Rose! This is a great video and very helpful. This is a good breakdown and explanation of all these different account types. I have a UGMA/UTMA account for my son that was started a few years ago thanks to a gift from my father-in-law. My son now has more assets in his account than I have in my IRA. I seem to do better with his money than my own! Lol!
Great video. Thank you so much for the information ! My daughter is 8 and I am just setting up a 529 for her.
Thank you for great information, Rose. I love the teaching format of your channel.
Great knowledge by Rose Aunt note it down kids...
Love ur video
Thanks! I knew you had to have a video for this back somewhere
Thank you for the great roll-over tip from UTMA to a 529 later on... Your wealth of information is greatly appreciated! 🤗
yes I loved this tip as well! I was not aware! TY!
What an amazing video! Thanks for explaining the differences
I was just thinking about how to invest my kids money thanks for posting!!
Yes please make a COLLEGE video!!Thank you so much for making this video and sharing your knowledge 🙂
I'm super excited right now, I can now pay my bills and take good care of my family. Thank you for bringing happiness to my home. Benjamin Albert
Telegram @banalbert
I just open 529 account yesterday for my newborn. And a normal brokerage account for her savings and investment. Thank you so much for all the hard work you put in this channel.
What you mean by Normal Brokerage account? You mean UGMA/UGMT
Been watching you for a while now love the content still! I opened up UGMA/UTMA accounts for my kids last year so I'm glad to see this video and boost my confidence that I did the right thing. They are 8 and 5 so plenty of time to teach them how all this works! :)
I was thinking about getting my (future) kids started ASAP as well. Easy millionaire for their retirement!
Hell yeah my kid as soon actually prior to having a job they will have an account set up ready to rock n roll
College.
Also, sending this video out to friends/family. Thanks for the content.
Thanks for the timely video. I have a family member expecting a baby so this is great
Please do the 529 and college video! I'm planning to start one for my baby brother and want to hear your take on it!
Will do! Yay for baby brother!
It's too risky. Open a Roth ira. 529 had to be used for college while Roth can be used for anything. What happens if your kid doesn't want to go to college after high school? 529 you will have to pay a hefty penalty to pull out the money when your kids won't go to school.
Most likely Kids this days don’t think that school system is failing them so most likely kids going to have business or something. Internet related like a app So 529 is not really. Worth it but if want you can do both of you want Roth IRA / 529
Nice video👌my son is 16 now and I have been max out his roth ira since he was 13. Teach your children to save and build wealth at early age.
This is impressive and such a head start for your child!
Hi Rose I love your vids and appreciate all the information 👍
Please make a video on how does 529 affect college financial aid. Thanks !
Appreciate your review,do you experience difficulty Trading?Textme±1 7 7 4 6 4 3 0 5 9 4
She said the UTMA will affect financial aid.
I like the UTMA. I can spend a little on longshots. A little bit on their microsoft, roblox, and mcdonalds, then nice chunks on index funds.
I love this topic. Currently looking to see what the best options are for younger siblings, worried about financial aid impact and all that though.
Caveat on Kid Roth IRAs: If the limit on contributions is tied to the child's Earned Income, I'm guessing that had to be income declared on a tax return for the IRS. A lot of babysitting, lawn mowing, dog walking money is often not declared, and thus probably won't be eligible for IRA contributions.
So timely Rose, now I have to decide which one to open for my child. Thank you for the video 🔔🤗
Beautiful - he/she is a lucky child!
Thank you for this.. I already have two of the three and am glad we did just started last year
Great video, I wanna start a Roth IRA for my 2 sisters when they start college. This video was very helpful !
If you invest $2,545 into the S&P, then assuming a 10% annual rate of return, your child at the an early retirement age will be a Million plus rich, excluding every other income channeled to this. We need to invest much more.
@@samowens9015 I do. Lucy Maria Koss.
@@samowens9015 Yeah she is highly respected. I guess you googled her.
Why would you assume 10% cagr? Isn't the historic returns in the 8-9% rate? That'd be a 12-25% higher.
This will not generate to a million dollars even if you assume letting it sit for 40 years. You have to consistently invest in it.
Rose you make the best content! Thank you for this
Great video! I was looking for this information a little over a year ago. I opened an UTMA for my kid on their 11th birthday.
I opened up brokerage accounts under my name for kids. I was thinking to keep the account under my name and transfer those accounts to them in the future. (maybe for their house downpayment). I know im not getting any tax benefits but it gives full control until I decide when to hand over the money. I hope this works out lol
thank you Rose. I am glad you did something different this time :)
Thank you Rose for this video!! Please do more videos about how to invest for kids?
Rose u r God sent. I learn so much from u
Great video Rose. Just posted a video about this..as we have a special needs son!
I don’t even have kids yet and I’ve been thinking about how I can set them up for greatness.
Spam!!
Great quick summary video Rose.
Rose is back!!!
Very interesting! This is what I have been looking for, thank you Rose!
Has anyone set up a UTMA for their kid and not told them about it and once they’ve reached an age where you felt like they would be responsible with it you were like “SURPRISE!”?
College. Fidelity 529 vs others options. How to assess performance for 3, 5, and 10 years out
Please make a video about paying for college. My son is 2, but I'm a single mom and would love to give him a great start.
When I have my nephew in the car on a drive we pick up a real estate magazine and then he picks a house and we have to figure out the job required to make the payment. Then we talk about insurance, maintenance and utilities. I'm planting seeds.
Final point: Great Video: my grandson picked his own stocks (Disney) he likes the movies, Pepsi, he likes Doritos, Microsoft, he likes Mojaang, Apple, he likes his IPad, and Roblox, he likes the gaming app. Oh, and he’s up 15% in 2 months.
@@actnowordreamon6774 I am not kidding. We talked about things he liked. Who owns Mojaang he said I looked it up and said Microsoft. He said I want to own some of Mojaang. On Roblox, he specifically asked me to buy it, but the IPO hadn’t happened yet.
Thanks! Very informational! I’ve been looking for a video/resource like this online
Hello Rose, very helpful information I can pass on to my siblings and maybe my future child/children. Please tell me where you got the dining set behind you.
Good video!
I appreciate that you are calling out the “catch” with custodial type accounts.
I personally don’t see the catch (parent not having control over the funds) as being worth it. From my perspective, It is better to open a separate brokerage account in your name/living trust name, Nick name it as XYZ College Fund so you don’t touch it, invest in diversified tax efficient investments and then designate the account to the child in your living trust (including who will take control of it if you pass away).
Despite teaching kids the right thing, it is rare that an 18 yo can prudently handle getting a lump sum that they can legally do anything they wish with, myself included at that age...
@Investing With Rose Your welcome. I don’t have issues with trading. I trade
A lot and used to work in investment management and understand how the small trading firms make money so have only dabbled in firms like RH to understand their impact on user experience.
This would be equivalent to just getting your kid a Roth ira correct except it will be a a taxable account. Will they be able to withdraw at anytime in the taxable brokerage account or is their a 10 percent penalty along with being taxed for capital gains?
Nice I had that question too I have a Roth IRA for me and a brokage account to
I enjoy making money online,there is this good feelings it gives me
Yes everyone knows what makes sense to them
For me stock is outdated,I enjoy crypto with my best broker that makes huge profits
Good investment brings a good
Satisfaction, good write up they don't understand...The reason for investment
You're all right
For me employ what brings gains...I employed
Cryptocurrency trading
Great video! Clear, concise, informative... learned more in a short video than from my CFP! Lol
@@investingwithrose3055 awesome! Thank you
Great video! Thanks for breaking everything down and thoroughly explaining!! 🙌
The biggest advantage that youngsters have against experienced investors is TIME. Time is your biggest asset in investments and life! ⏰📈
Thanks Rose! I was thinking about doing this for my nephew!
Hi Rose, I made over $100,000 in daytrading in 2020. Have to pay about $37,000 in total taxes (Fed + CA), can you make a video on creating a LLC or other alternative? A youtube video suggested that doing a LLC, you can avoid some taxes. Your videos explain clearer. Also what does opening an LLC entails in addition to working a 8-5pm job? How much work to monitor a LLC? Thank you!
Thank you for the video. Can I open 529 and Coverdell at the same time?
Great Job/ This is one of the best videos of explaining, good job
Yes paying for college and saving for kids please! thank you!
Love you and thanks Rose ! I learned from you again !
Yes I would love to know more about college accounts for kids
Love this. Totally how I think. Got all my nieces, nephews, brothers and sisters to open Fidelity accounts and contribute. Now, I just need my 2 year old to have earned income for a custodial Roth. Haha.
Oh spammer, leave Rose and her peeps alone. Come on. Be a good human. 🤦🏼♂️
So you can't contribute anything into the Roth until your child has some sort of earned income? I was just thinking I could contribute long as it isn't over 6k year. My son isn't even 1 yet but I would love to start putting back for him. Is it more feasible to just do a taxable account and have a trust?
Yes please! 529 plan video request! I cant decide 529 vs UGMA/UTMA. And I didn't know you can transfer UGMA/UTMA to a 529 later!