Investing childrens accounts new money

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moneybz
Posts: 2
Joined: Tue May 22, 2018 1:32 pm

Investing childrens accounts new money

Post by moneybz » Tue May 22, 2018 1:48 pm

I have 3 childrens accounts set up and ready to go. I plan to make contributions every year. I have done some investing in Dimensional for 9 years and did something like a 7% IRR as of some time last year and they they still had to rebalance it and owned capital gains about a year or two ago.

I am considering doing index investing myself this time. I thought of doing the spy with 2/3 of it and leaving rest in federated gov't bonds and goldman gov't bonds which yields .75BPT. Problem with SPY is it is loaded with FANG kind of like in 98' and 99'.

They had a barrons article where bogle himself said he was invested 60% in total stock market fund. Twins are less than 1 year old and we have a 10 year old. I also lived through long period when it took over 10 years to recapture highs on S&P 500.

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FiveK
Posts: 5141
Joined: Sun Mar 16, 2014 2:43 pm

Re: Investing childrens accounts new money

Post by FiveK » Tue May 22, 2018 3:52 pm

moneybz, welcome to the forum.

What type of account (e.g., taxable, or 529, or...) are we discussing here?

mega317
Posts: 2470
Joined: Tue Apr 19, 2016 10:55 am

Re: Investing childrens accounts new money

Post by mega317 » Tue May 22, 2018 4:34 pm

I think you need to define the goals for these accounts. For example, is it possible the 10 year old will use this money for something like a school trip in the next few years?

What bonds are at 0.75%? I think you can do better.

delamer
Posts: 5478
Joined: Tue Feb 08, 2011 6:13 pm

Re: Investing childrens accounts new money

Post by delamer » Tue May 22, 2018 8:51 pm

Defining your goals for the money is important.

Mr. Bogle is 89 years old. Your twins are 1. It is possible that their time frames are very different.

moneybz
Posts: 2
Joined: Tue May 22, 2018 1:32 pm

Re: Investing childrens accounts new money

Post by moneybz » Wed May 23, 2018 3:02 pm

The accounts are Crummey Trust. There is 30K in each of them, I anticipate we will add. I believe the tax rate on income is very high. In other words, tax free income or dividend and capital gain income would be preferable. The 10 year old and or 1 year olds may use funds for college, house, or other piece of direct real estate. I would want to build them up before putting them in real estate.

Thanks in advance for help.

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