[USER]

Hello good people. I have a question I would really appreciate some insight on. I have 3 kids (7,4,2). They currently all have a CD with a combined total of $33k.

My question is, should I keep the money where it is, or reinvest it somewhere else?

Me and their father are vets, and they will be able to attend college for free.

I just want to make sure I am investing the money where I will get the best return, and also it’ll be most beneficial when comes time to gift them with it.

Thank you!!

[Aaron]

I’d consider something like putting a portion in the stock market now (VOO or similar broad etf) and put in most of the remainder when there is a major correction, like 20- 30% plus.

[Brad]

Your kids are young!! Their risk tolerance should be the max
I would put it in a growth focused ETF like VBK or VUG.

Something even more aggressive than an S&P tracker like VOO
Go big!

They’ve got one to two decades at least

[Tom]

Given the potential time horizon, I’d be 100% S&P500 or Total Market Index Fund/ETF.

Balance withdrawal timing and current market forces.

[Sandy]

What do you hope they will spend the money on? Seems like they likely have a long time frame so would think you may want to think about investing the funds in the stock market.

Although that will come with some volatility and potential for losses (especially over the shorter term), over the next 10-20 years stock market investments will most likely provide a much higher return than CD’s.

[Mark]

Put it in the market. A cd = certificate of depreciation. It will never even keep up w inflation.

U need to beat inflation + taxes just to break even

[Russell]

Two options:
1) A 529 account. Even if they don’t use it for college, it can now be rolled into an IRA.

Get them a head start on retirement saving in a way that will show them the growth potential of investing but is somewhat shielded from youthful indiscretion.

Even if you’re both vets, two GI Bills would only cover two kids, right?

I know some states waive many in-state costs for dependents of disabled vets, but that’s not completely free so they’d need the GI Bill benefits or a 529 to help pay the remaining costs.

2) a custodial brokerage account. This is just straight investing for them.

It’s on you to teach them to use the funds responsibly, but it has a lot more flexibility.

Note: you own the 529 account with them as beneficiary, but you can change that beneficiary at will.

You do NOT own a custodial brokerage account…your kid does, with you as custodian on their behalf until they become an adult.

[Molly]

Congratulations on asking Now! I’d open stock portfolio for each kid, and put up to half in Tech ETFs because the world is still expanding use of AI and Internet and the rest in ETF based on the major indexes.

[Author]

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