I have a savings account for my daughter that isn't making any money. I was wondering what is the best way to invest this money so it can make some money. The goal is to use this for college or possible a vehicle. I still contribute every week to the account so that will not stop.
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Wait for the coming correction before investing.
I heard people say the same thing last year, and the year before....could have made a lot of money in the meantime.Originally Posted by d'Wayne
Start with looking into the different online brokerages and see what they have to offer. I'm not sure what the rules are for a 529, college savings plan, but that might be an option if the money is to be used for college only. If the money is going to be used for whatever, whenever, then just open a brokerage account and buy what you want, stocks, bonds, ETF, funds, its all there. If your new to investing on your own, just be mindful of commissions and any fees. Always ask questions if your'e unsure.
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If you put it in your name you pay the taxes as you go. If you put it in her name as a minor it becomes hers at age of majority. She can then use it as she pleases. I would open a scotttrade or similar account and buy AOA. Low cost and good allocation in one investment.
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Vanguard index 500 fund. Very low fees. Make your Iinitial investment and keep adding to it each week.
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Another option, if you are certain you want it for college, is a prepaid tuition plan if your state offers it. Rising tuition seems to be a certainty like taxes. I bought my kids a plan when they were young. It covered tuition, local fees and dorms for a year. Paid around $16,000.00 (you can pay over the years also if you wish). The same plan today is in the upper 40k.
+1 on this. Hard to be a good S&P 500 index fund (like Vanguard).
Do not take your half in the middle ....
Look into the tax benefits of a 529. It can make a nice chunk of extra money to invest. The benefit is on state taxes and varies by state. In Indiana it was a 20% tax credit which was a huge deal. Put in $5000 and bank an extra $1000 for the tax credit right away.
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One of the cardinal rules of investing is to "build a position ". That means don't buy all at once. With 5k, you could buy a fund in 2 steps, half now and half later, ideally after a correction has occured.
Go into a edward jones office, maybe visit 2 or 3 near you and see who you like.....
The 529 for college is a good way to go. Ive got one and have had it since my son was born 17 years ago, its over 100k with myself putting in approx 25k total.
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