Thursday, November 18, 2010

How to Get Rich Slowly DRIP by DRIP: Gifts to Children

For your own investments you have many choices besides DRIP accounts. Starting with an employer-sponsored 401k plan and including Traditional and Roth IRA accounts available from just about every financial institution of any type. Even life insurance and annuity contracts are investment options.

However, for your grandson or your niece your choices are limited. The amount of money you can afford to invest for them is also likely more limited. The limitations make DRIP accounts an attractive choice.

With a series of one-time investments of $25.00 in any month you can invest annual amounts ranging from $25.00 to $300.00. Of course, you can invest significantly more than $300.00 a year. But the more money you can commit to the child’s investment the more investment choices you have.

DRIP’s are perfect for the grandparent of modest means. With low periodic contributions completely under your control, you can make a huge difference in a child’s financial outcome.

Accounts for minor children can be set up as “custodial” accounts. For adult children they can be set up in the name of the adult child and, with the cooperation of the adult child, managed by you – the contributor.

In the next post I’ll review the DRIP accounts I set up for my adult children.

Link to Topics in the Special Report - How to Get Rich Slowly DRIP by DRIP

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