Investments as Gifts

Discussion in 'Business, Careers & Education' started by speedy4500, Jan 31, 2012.

  1. speedy4500

    speedy4500 Senior member

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    My aunt gave me one share of IBM stock when I turned one year old. When I cashed it out to help pay for college, it was worth $800-- through dividend reinvestment, splits, and increase in share price. I think it is a great idea that I would like to use for the young children that my close family and friends are popping out now.

    I'm wondering if anyone else has done this, and if they have recommendations for services to use, or specific shares to give-- I'd imagine any blue-chip stock would be a decent choice, but what about buying shares of an ETF or say a PIMCO Fund? I'd think a managed fund with some diversity would be a better choice than a single company in terms of long-time horizon yield.

    Thoughts?
     


  2. imageWIS

    imageWIS Senior member

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    Facebook IPO :laugh:
     


  3. Concordia

    Concordia Senior member Dubiously Honored

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    If you don't wish to be too clever, Vanguard has a lot of products that will simplify your life.

    You could buy one of their index funds (like the Total World Stock fund), or if you want to go active, there's a Dividend Growth fund that isn't a bad thing to do right now.
     


  4. Nereis

    Nereis Senior member

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    +1 for Vanguard. When most of the world's fund managers cannot manage to beat them ex-fees you know they are good with their products. Plenty of variety to choose from too. Depending on how well the index you invest in goes, it could end up paying for the deposit on the kid's first car. Now that's favourite uncle territory.
     


  5. Joffrey

    Joffrey Senior member

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    always a good idea. better than toys or shitty clothes. Also, what about a college investment thingy?
     


  6. gettoasty

    gettoasty Senior member

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    Open up a 529 through UGMA/UTMA
     
    Last edited: Jan 31, 2012


  7. speedy4500

    speedy4500 Senior member

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    I'm just a small player, pretty much no chance on getting in on that. Besides, I have my doubts as to the long-term prospects for social media type shit.... but that's just me.

    To be honest, I'm not sure some of the kids will be going to college. Also, even though I have an advanced degree, I don't think college is appropriate for everyone and I don't want to limit or force them that way.

    Vanguard is definitely a company I've been considering-- besides their great returns, I enjoy hearing what Bogle has to say about anything under the sun, and I used to work just down the street from them. Unfortunately, many of their funds have minimum account requirements that exceed what I'm looking to do for these kids. I'm young and well-off, but far from wealthy.
     
    Last edited: Feb 1, 2012


  8. kwilkinson

    kwilkinson Having a Ball

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    Interesting. Does anyone know what the penalties are for cashing out a 529 if you don't use the funds for post-secondary school?
     


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