Securing Your Baby's Future
by
Gregory Grant
As every parent knows, it costs a lot of money to bring a child to adulthood. Not just the usual expenses of food clothing and shelter, but also the mega-bills of college that loom on the horizon. So when do most experts agree is the best time to start investing on a child's behalf? The answer is right from the beginning.
"We're making investments in her name and we are taking investments from her grandmother and great-grandmother and placing them in her name as well," says Wendy Fuentes, a mother.
That sounds easy enough, but once the maternity ward is left behind, what's next?
Setting Up an Investment Account
"A couple when they have a newborn baby and they're thinking about setting up an investment account for the baby, has to do several things," says Michael Gabay of Merrill Lynch. "One is immediately get a Social Security number, then think about the investment vehicle that they're going to use, the third thing is to determine the risk since there's a longer time horizon they can afford to have a little more diversified portfolio."
When a child is a babe in arms, it may seem like there's plenty of time to start an investment program. But lost time is lost money.
"It's important for the couple to start this process early because you have more time to build up the investment returns for that child's account," says Gabay. "If you get a ten percent return you double your money every 7.2 years, so if you do the math, you start early you're better off."
New parents have plenty of things to think about: midnight feedings, nap schedules and lots of diapers. But experts agree that starting to plan for that baby's financial future from day one, makes the most sense and will assure the baby's first steps will be secure and in the right direction.
In recent years, companies have flocked to the web to set up dot.com sites. Initially retail companies caught the attention of investors and consumers alike.
When to sell a stock is as important as when to buy a stock. The investor that goes beyond just looking at the financial pages will find that this kind of in-depth research will pay off in helping to make wiser investment choices.