Best Way to Invest a Three-year Old's Money?

[RandySF]

We have a lot of friends and family and, over three years of Christmas holidays and birthday, our son already has a lot of cash sitting in the bank. I know times are tough for the markets, but I don't think it will last forever and we are looking for the best way to invest his money. We are looking at stocks, mutual funds and even TIPS (inflation protected bonds). I was wondering how folks here are handling their kids' money.

[Warpy]

1. What a lucky kiddo!

Insured CDs are the way to go, IMO. No, the return isn't that good at present, but the operative word is "insured."

[sweettater]

2. Bonds?

[MercutioATC]

3. A 3-year-old? Equities funds (stock funds).

I'd stay away from financials right now, but with 15 years till college, I'd be in stocks.

[MercutioATC]

21. Ok, and if you DID invest in equities on February 23, now's the time to sell them.

An 18% gain is enough for right now...another big dip is coming.

[Veritas_et_Aequitas]

4. Bonds would be the best thing now if you're looking for security

Low-yield, but they're secure.

If you don't mind risking the kid's money, you could buy some stocks now while they're cheap. Ford is selling very cheaply right now and will probably recover from this. Bank of America is also cheap, but riskier.

Mutual funds are tanking right now. If you don't believe me, then look at your retirement funds. They're volatile and forecasts indicate they won't be settling down any time soon. Keep away for now.

[truebrit71]

5. Laddered CD's.

..

[ipfilter]

6. I use sharebuilder.com for my kids accounts.

They have free dividend reinvestment. When the dividends are paid out sharebuilder automatically buys fractions of shares in the same company. It's basically the same thing as a DRIP only through a broker instead of dealing directly with the company.

You could buy T-Bills directly from the Gov at treasurydirect.gov as well.

[Common Sense Party]

7. A lot of cash? With a 15-year horizon...

Probably a total stock market ETF and a foreign ETF. Then I'd plan on locking in gains in about eight to ten years from now and moving it into CD's.

That's what I would do. Your mileage may vary.

[SlowDownFast]

8. Shoes and clothes for the next 3-7 years.

That's how long a depression lasts.

[tama]

10. Tools

rake, hammer, watering can, secateurs, etc. etc. A compost bin. A garden.

[SlowDownFast]

12. Just give it to the gov't.

They're going to take it anyway.

[notesdev]

9. I'd go with TIPS

We'll be deflationary for a while, but when inflation will kick in with a vengeance.

[eridani]

11. What about an annuity?

Variable annuities preserve capital and still capture market gains, if any.

[InkAddict]

13. Teak Farm?

http://tropicalhardwoods.com/index.html

[ernestmanning922]

14. Best Way to Invest a Three-year Old's Money?

Investment is need thing for all of us. And in this hard time Investment is always a plus point.

[protect our future]

15. Gold. nt

[Old Hob]

22. and silver. Silver is used up.

[westerebus]

16. Candy!!!!!!!!!!!!!!!!!!

If he's got a bunch of cash in the bank, just sayin'.....

[leftofthedial]

17. alcohol, firearms and ammunition.

same as a 53-year old's money.

[westerebus]

20. Oh, toys! Good choice too.

:toast:

[offoffwallstreet]

18. Do you want to adopt me too?

Please? I can do a lot of work around the house.

[Paulie]

19. 529 plan

Tax deferred when used for college. Don't do prepaid tuition as it won't cover room and board. Www.ricedelman.com

[benld74]

23. Zeroes are ALWAYS Heroes! Zero Coupon Bonds