Investing For Kids (HOW TO GIVE THEM A HEAD START)
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- Опубліковано 19 чер 2024
- If you have kids in your life, do your part to set them up for a bright financial future and help them get ahead. In this video, I'm going to cover the 4 types of accounts you can open for your kids, and the pros and cons of each. I'll also touch on tax considerations, plus how these accounts effect eligibility for financial aid to pay for college. Lastly, I'll share some tips on how to start educating and encouraging kids to invest in their future
**ATTENTION: I have a new Instagram and TikTok handle @itsrosehan **
That's my official account, and I will NEVER message you about investment schemes, so please be careful and block & report any scammers posing as me.
TIMESTAMPS
0:01:24 - Terminology: Owner vs. Beneficiary vs. Custodian
0:03:28 - Roth IRAs for kids (aka custodial Roth IRA)
0:06:15 - 529 accounts
0:07:25 - Coverdell ESAs
0:09:45 - UGMA/UTMA brokerage accounts
0:11:40 - Pros & cons of each account
0:15:25 - Tips to encourage kids to save/invest
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**BOOKS I RECOMMEND 📚**
I Will Teach You to Be Rich (hilarious how-to book on personal finance for millennials)
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The Little Book of Common Sense Investing (Jack Bogle's classic advice on index funds)
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InvestED (step-by-step, millennial-friendly advice on how to pick stocks like Warren Buffett)
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Unshakeable (this book = courage. blast ALL the fears & misconceptions you have about investing)
amzn.to/2SKyklt
Rich Dad Poor Dad (#1 selling personal finance book of all time... need I say more?)
amzn.to/2SJ6vtx
Think and Grow Rich (the ultimate book on money mindset and wealth consciousness)
amzn.to/37N2adc
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**MY FAVORITE MONEY TOOLS 🖤**
YNAB (I literally can't live without this budgeting app, so obsessed)
www.youneedabudget.com/?ref=Y...
Wise (like Venmo but for international currencies - I use this app a LOT for my life in Mexico)
wise.prf.hn/l/413jE0q
Ledger Nano S (crypto storage hardware wallet, because "Not Your Keys, Not Your Crypto"!):
amzn.to/3Ne37jy
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DISCLAIMERS & DISCLOSURES ❤
This content is for education and entertainment purposes only. Rose does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.
This description contains affiliate links that allow you to find the items mentioned in this video and support the channel at no cost to you. Investing With Rose is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Thank you for your support!
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• Investing For Kids (HO...
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.
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 don't even have kids yet and I'm already thinking about this😅
Love your content Rose!
Your kids are lucky!!
I don't have kids yet but thinking about doing this for my younger sister (13 years old)
Rose, talk about perfect timing. I literally emailed my tax advisor yesterday regarding custodial account benefits. Thanks for providing us with invaluable knowledge.
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 👏
😂😂
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 💖
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!
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.
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.
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.
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.
How did I miss this video? Thank you Rose! I love all of your content!
Thank you for great information, Rose. I love the teaching format of your channel.
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， your video is EXACTLY what I am looking for. I leaned so much. Your comparison and explanations are so clear! Thanks!
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!
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!
Please do the 529 and paying for college video! 😊
Yes please Rose..I want to know more about 529. Thank you!
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)
Great video! Thanks for breaking everything down and thoroughly explaining!! 🙌
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 you make the best content! Thank you for this
Really appreciated this video. Put a lot of my questions in perspective.
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
Yes please make a COLLEGE video!!Thank you so much for making this video and sharing your knowledge 🙂
Love you hair! 😍thanks for all the tips!
This is so informative! I am looking to open my kids accounts. Didn’t know where to start until now :)
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
Very interesting! This is what I have been looking for, thank you Rose!
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.
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.
thank you Rose. I am glad you did something different this time :)
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.
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! :)
Thank you for this.. I already have two of the three and am glad we did just started last year
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.
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 for the great video.
We opened utma/ugma for our 8 and 4 yr old boys last year.
Hi Rose I love your vids and appreciate all the information 👍
College.
Also, sending this video out to friends/family. Thanks for the content.
Thank you so much for sharing! The information you share is priceless.
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!
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.
Love you and thanks Rose ! I learned from you again !
Thanks! Very informational! I’ve been looking for a video/resource like this online
This information is perfect for future parents 😍
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.
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.
Thanks for the timely video. I have a family member expecting a baby so this is great
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.
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! 🙏🏼☝🏼
Great video, I wanna start a Roth IRA for my 2 sisters when they start college. This video was very helpful !
Great knowledge by Rose Aunt note it down kids...
Love ur video
I recently opened the custodial Roth IRA and will definitely be opening the 529 for his college! My son has been a miser with his money since he was 2! I’m so proud of him! This kid is going to be a millionaire by 30! Thank you for your tips!! Love your channel!
Hey, do you mind sharing which company you went with and how to open one?
Any brokerage account . Fidelity or vanguard .
Very impressed with your videos . Thanks for sharing!
Thanks Rose! Love your content ☺️
This is super helpful! Thank you!! Easy to follow even for a super beginner :)
Thanks, Rose! This was super helpful!
Thank you Rose for this video!! Please do more videos about how to invest for kids?
What an amazing video! Thanks for explaining the differences
I was just thinking about how to invest my kids money thanks for posting!!
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!
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
Great quick summary video Rose.
Great video as always Rose! Thank you :)
Great Job/ This is one of the best videos of explaining, good job
Love the kids info! You should do a mini series 🤗😍❤️
Appreciate your review,do you experience difficulty Trading?Textme±1 7 7 4 6 4 3 0 5 9 4.
This was very informative. Thank you very much Rose😇
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.
Thanks! I knew you had to have a video for this back somewhere
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!
Great video! Clear, concise, informative... learned more in a short video than from my CFP! Lol
@@investingwithrose3055 awesome! Thank you
Thank you so much for this!
Yes, Rose! please making paying college video
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@@investingwithrose1839 stop using her name for scams, so annoying
Rose u r God sent. I learn so much from u
Awesome information Rose!!!! Thank you!!
Rose is back!!!
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 love this video thanks for sharing 💚
Great video Rose. Just posted a video about this..as we have a special needs son!
I really enjoyed this video! Thank you so much
Great Video! 👍 I also wish I would have known about investing earlier in life. However now I'm passing on what I know to my kids and being that mentor that you talked about to young adults. Thanks Rose!
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.
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.
I was thinking about getting my (future) kids started ASAP as well. Easy millionaire for their retirement!
Great and super understandable explanation!
great concise video...just what i was looking for
Yes I would love to know more about college accounts for kids
OMG Rose!! You’re killin me you little cutie pie!! 😘
Such a great informative video! Thank you 😊
Thank you, Rose! We appreciate your knowledge! Guess what? I open my son's Roth IRA :)
Great video just started watching u Awesome content Thanks
Hell yeah my kid as soon actually prior to having a job they will have an account set up ready to rock n roll
God bless you.!!!!! Keep up the good work. Thank you!!!!!
College plans please. 😊
Your content is always very well presented as well as informative thank you very much
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👍
Wow! Thank you for the educational videos.
Thank you that was very informative!
Can you explain the benefits of the UTma/and UGma. Not in regards to college but in regards to net worth and leveraging credit? Or the effects on credit for the custodian?