How to Invest for Your Child’s Future

Yes, your child might be able to get a scholarship and work his way through college, but wouldn’t it be a whole lot easier if you could help out? Even parents with limited incomes can help their kids. It just takes some planning from the beginning and knowing how to invest. Take a look at some ways you can invest in your child’s future.

Open a Savings Account

Savings Account

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The most common way you can invest money for your child is through a standard savings account. You can set it up to automatically withdraw a certain amount of money from your personal account each month. For instance, if you contribute $50 per month to your child’s account, he will have $10,800 by the time he turns 18. The more you contribute each month, the more money your child will have when he is old enough to go to college. Every little bit helps, so this is a good way to invest even if it is only $10 per month.

Switch to a Money Market Account

Money Market Account

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Money market accounts are better than standard savings accounts because they have a higher interest rate. The catch is that you have to maintain a minimum balance in order to open one. This means you’ll have to start with a standard savings account and switch over to a money market once the balance is high enough. $5,000 is typically the amount needed to open a money market account, but the rules are different at every banking institution.

Consider Gold Investment

Gold Investment

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Just like money, gold also fluctuates in value–though it tends to rise more than money does. This means you can purchase gold as an investment and watch the value increase. Gold is one commodity that has continued to rise in value throughout history. It is still a fairly safe investment today. One great thing about gold is that you have something tangible that can’t be destroyed overnight by the stock market or a banking breach.

Open Mutual Funds or Bonds

Mutual Funds

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These are typically known as the safest investments because the likelihood of losing money is far lower than in the stock market. However, there are a lot of rules and stipulations placed on mutual funds and bonds that prevent you from withdrawing money whenever you want. The mutual funds and bonds usually have to mature before you can get to the money. Keep this in mind when investing for your child’s future because you want to make sure the money will be available when you need it. Also remember that the bonds that take longer to mature usually have better interest rates.

Play the Stock Market

Stock Market

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One of the fastest ways to make money is through trading stocks — it is also the fastest way to lose money. If you are willing to take the risk, find a stock broker to help you out, especially when you are new to this type of investment. The stock broker will be able to lead you toward smart stocks that are more likely to pay off.

Even if you only make a little extra money each month, you should invest it for your child’s future. All parents want to see their child get through school and be successful, and you can make this easier by providing money upfront to get your child started. Pick the method that fits your goals the best and get started today. Do you have any other ideas for investing in your child’s future?

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