How To Guarantee That Your Kids Will Be Rich (529, Custodial Account and More )

I think the majority of us watching video, didn’t receive a crazy amount of money from our parents, not for a down payment on a home, car or even going to college. So this video is how to make sure you set your kids up for success and they actually get the headstart you never got.

However I am personally a strong believer that you set your kids up for success but not give them enough to were trying to be successful is not needed. Thiers a difference from helping someone and just doing the entire thing for them.

So in this video, Im not going to tell you how to make sure you’re kids have a million dollars by age 18, but instead how to make sure they have enough to graduate without student loans, Get a home they can afford and get to financial freedom a lot faster than you ever could.

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Chapter:
0:00 Intro
1:54 What App Do You Use
5:01 What Type of Account Should you Open
16:42 Rules Before Saving for Kids
17:45 What To Invest Into
19:05 Outro

1. What app do you Use
– I know you seen the ads for Acorns, M1 Finance and all the other flashy apps that promise you the ability to invest for the generation ( for a small fee )
– And those apps are fine, they really are but theirs no need to pay a monthly fee to do it
– I use M1 finance, and I have enough money in the account to have the annually fee pay itself ( they give 1% on a saving and the cost is $125 a year or $10.42 a month or $7,362.46 if invested for 18 years at a 11.47% return ) you need $12,500 in the account to get the membership for free it could be your emergency account

But Other Options that are Free:
– Fidelity
– Vanguard
– Charles Schwab
– Td ameritrade

My Personal Favorite: is Charles Schwab
– They are getting very good with the tech and its like an M1 finance with a few limits but still solid and free
– Vanguard no fractional shares, fidelity no comment and TD no comment

2. What Type of Account Should you Open ( Pros and Cons )
– I don’t have any kids, but the saying says, every parents sees the best in their kids
– But if all kids grew up to be amazing adults we wouldn’t The Zodiac Ki**and we wouldn’t Bernie Madoff

Education Account Options:
– ESA: Education Savings account or CSA Coverdell Savings account
– Similar to an IRA with a limit of $2000 a year in contributions
– And if you single parent make more than 110k you cant do it or if you married parents make over $220k you cant do it either
– 10% penalty

529 account: State specific ( if you want to invest more than $2000)
– Penalty of 10% and income tax
– 15k per person

Retirement Account Options:
Custodial Ira or Roth Ira: they require some income from some job even part time, they cant contribute more than they make either. ( example of How wealth can add up ) – Matching Technique
– Limit of 6k a year

Other Options:
UGMA ( Uniform Gift Minors act ) or UTMA Uniform Transfer to Minor act ( incase they don’t go to taxes)
– 15k per child
– Not limited to education

Normal Taxable Account:

3. Rules Before Saving for Kids ( take Care of yourself and Past on Good Money habits )
– Take Care of yourself first: Debt Free, Emergency account, Invest while you pay off the mortgage ( this where you’re about to set aside 5% for kids )
– No good habits and they will destroy it

4. What to invest into and how to switch when your getting close
– You can have 100% index fund stock portfolio
– But as you approach 2-3 years I would switch to 50-50 or 80-20 bonds being more ( incase the market switches )

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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