What would you buy a newborn
Jeffnlu
Posts: 284 ✭✭✭✭
Our daughter had a baby on January 1st of this year. Our first grandchild. I was planning on opening an account for her at my local credit union. Nothing serious, I am thinking maybe $250 - $350 per year. Interest rates are low however, the CD rates are around three percent.
Then I thought maybe I should spend that on coins for her and gift them every birthday. That would seem a gift where maybe in twenty years she would think old Gramps was a pretty cool guy. Even something from the mint each year plus something(s) or other slabbed. Gold, Peace dollars, semi keys?
Any suggestions?
Thanks
PS: although this is our first I will do the same for all of the future grandchildren.
2
Comments
If you want to give money, I've been thinking along the lines of a brokerage account and giving her shares of a stock like Amazon or Google, or an index fund tracking the S&P 500. I think it's much more important to educate children on investing than having a savings account these days.
For coins, I've thought it would be neat to give them a coin and have it engraved with their name and date, similar to what was done 100+ years ago.
Shares in a fairly aggressive growth fund. I've gifted some coins now and then and the grandkids and kids are not interested. Worth a shot tho, might become a common interest one day. .
1,000 shares of Amazon with dividend reinvestment.
Silver eagles would be a fun adventure. Maybe even a silver brick!
I'd either open an UGMA account or a 529 plan if you want the proceeds to go to the child's education. Vanguard is a good choice since their funds are amongst the lowest expense ratios in the industry and you can't go wrong with the S&P 500 for a long term investment.
Amazon doesn’t pay a dividend.
College fund. Coins secondary
I’d go with an aggressive growth fund. Too risky for your taste? Try assembling a small portfolio of solid dividend paying companies and reinvest the dividends in more shares.
I think he was being a wiseguy.
Maybe so. But when it comes to people and their money.......
DO NOT BUY HER ANY COINS! It is unlikely she will have any interest in them. Buy her some shares in your state's college tuition program if your state has one.
Buy her a gold coin each year? Can't hurt.
My 1866 Philly Mint Set
I gave my one year old grandson a silver eagle and a silver mint set from the mint for Christmas and will do something similar for his birthday and next Christmas. If he doesn’t get into collecting then he can sell them.
DiggerJim
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Education fund
https://www.pcgs.com/setregistry/quarters/washington-quarters-major-sets/washington-quarters-date-set-circulation-strikes-1932-present/publishedset/209923
https://www.pcgs.com/setregistry/quarters/washington-quarters-major-sets/washington-quarters-date-set-circulation-strikes-1932-present/album/209923
I’m also in the equities camp. However, I’d also recommend buying the coolest looking antique “treasure chest” you can find, filling it with old circulated raw coins, and keeping it in a place where it will be seen at family get-togethers. Play it right and it could lead somewhere.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I've bought my grandson a 1/4 oz Proof Gold Eagle every year for Christmas and a Proof Silver Eagle every year for his birthday. Now that he's almost 9, he still doesn't pay much attention, but his mom does.
I knew it would happen.
Actually - an aggressive growth fund from one of the major fund managers would include Amazon and friends.
As to the stock itself - one day it might pay a dividend so best to be on board with reinvestment. Also, the trustee can reinvest mutual find dividends automatically. There will probably be no tax due for a long time so there would be no cash needed for withdrawal.
I bonds
Education fund - see your financial advisor to see if you can shelter taxes on it.
I'd skip anything related to coins and bullion until you have funded your education responsibility.
Edited to clarify: I did not mean to say that a grandparent had educational responsibility for grandchildren - my mistake. But I do believe that saving for educational expenses ought to be a high priority.
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
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Diapers?
@Jeffnlu Congratulations Jeff n Lu!
Being grandparents is a wonderful thing. You can spoil them rotten... then send them home to mom and dad.
What we have done for our grandchild was to setup a joint savings account with me, my spouse, and grandchild (will need a SSN) as owners. This is where you can sock away whatever amount of $$$ without worrying about the gift tax limitation and you can turn around and invest it into anything you want for the grandchild, such as CDs, stocks, etc. Your risk tolerance will be your guiding light on what to do with these monies.
Separately, we send various gifts, such $$, PM (ASEs), clothes, toys (and more toys and more clothes) etc. to the parents for the grandchild.
Enjoy the moments! The little ones grow up so quick!!
Shower her (or him) with love. The world seems to have a shortage of that and it costs nothing but selflessness. On a side note: it can't be bought.
Birth year proof set. Other than that, 529 plan.
A binky (pacifier). Edit to say just kidding, gold binky, No 1/4 oz gold Eagle each year would add up over time.
We always say "You can't spoil a child with Love."
Congratulations!!! A girl and she is a Capricorn too!! It doesn't get better than that!!
I personally would go with a birth year coin, proof ASE, 1/10 platinum Eagle, 1/10 AGE and start an account. The interest on a savings account would be lucky to keep up with inflation. Everything goes in cycles and precious metals is only part way through the up cycle that started in 2000 IMHO.
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Born in January, How about one of these Canadian 1/4 ounce .999 silver coins with crystal.
https://online.kitco.com/buy/31076/2018-1-4-oz-Silver-Coin-Birthstones-January-9999-31076
Then each new grandchild can get one for their birthday month. Not too expensive and limited mintage. But you may have to get a crystal ball to know which other months you will need before they sell out. LOL.
Or this is pretty nice, It is a 2018, but the love started before she was born
https://online.kitco.com/buy/31074/2018-1-4-oz-Silver-Coin-Celebration-of-Love-9999-31074,
Chances are they will have something similar for future years.
The rest of the funds is probably best in education fund or similar to many above recommendations.
National Commemorative Medals of the U.S. Mint:
https://www.pcgs.com/setregistry/u-s-coins/medals-tokens/national-commemorative-medals-united-states-mint-1940-present/alltimeset/195526
Birth year proof set. Plus something else. My father was born in 1921, Wish they had put away a set of new coins.
@Jeffnlu
Those telling you to put the money into her education (e.g. a 529 plan) are well meaning, but you should consult an expert before you do. I don't know what current financial aid regulations are or what they will be when your grand child becomes an adult, but about a decade ago for every $1 you saved in one of those plans, you would lose more in potential financial aid and grants. Obviously that doesn't apply if your family is rich and doesn't need financial aid, but if you do, you may be undermining your purpose.
I would avoid coins or stick to bullion if you must. There are other options like mutual funds, inflation adjusted bonds, ETFs, etc., that offer better opportunities (although with a building housing bubble, I would probably go with the second for at least the next couple of years but I am a pessimist).
Congratulations! Our first and only granddaughter (9) is the most precious thing we can ever hold.
What do you give a gift?
Just for fun: If you use this projection as a guide, maybe Gold and Spam.
Amazon doesn't pay dividends.
Great transactions with oih82w8, JasonGaming, Moose1913.
Roger's post clearly in jest. It would take $1.6+ million to buy 1000 shares of Amazon, and dividends are a joke as well. The OP said $250-$350 a year. LOL
National Commemorative Medals of the U.S. Mint:
https://www.pcgs.com/setregistry/u-s-coins/medals-tokens/national-commemorative-medals-united-states-mint-1940-present/alltimeset/195526
At 250 to $350 per year, a full diversified portfolio. 1/10 oz gold coin and balance in stock leaning towards real estate.
Bob Sr CEO Fieldtevhs
1 share SPY/VOO/IVV
Gold (size of your choice) or Platinum eagle proof each year from the US Mint.
The downside to stocks is the fact that they will have to be held so long (or constantly monitored/traded) for a newborn. Good Alternative is an ETF that invests in short term t-bills that reinvests itself.
Another alternative is an annual payment into a pre-paid college tuition fund through your state if they offer such a thing. I did this for our daughter in Florida and was glad I did.
The only way to make an economic system truly stable is to permit the free market to take over.
Good suggestions all, I like the idea of a yearly proof set or Eagle. Along with an account, I'll check with my financial guy about funds versus cash and maintenance needed.
Meanwhile, here is the lil cutey.
Well, that is what life is ALL ABOUT. Give her the gift of your time and attention. Other than that, something set aside for college or marriage or whatever is the best plan. If you must do coins, do a yearly 1/4 oz AGE that can be easily liquidated isn't a terrible idea.
@Jeffnlu ..... she is a cutie indeed Congratulations!
This maybe a good set from US Mint .... 2019 dated proofs.
With the exception of family love/unity, hands down a higher education is one of the best things you could give her. Sorry to say I think the coins would eventually be tossed aside and forgotten.
"A dog breaks your heart only one time and that is when they pass on". Unknown
Wow! She is so wonderful! Holding her head up at 7 weeks is a great sign. Enjoy every second of time you get to be near her.
She definitely deserves a little silver or gold.
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My grandkids' education is their parents job.
My job as grandfather, as I say, is to have fun with the grandkids. If at anytime they're not having fun I turn them over to their parents to fix.
To the OP; I like @MrEureka's thought on this topic.
When I asked a similar question here over ten years ago 'big and shiny' was suggested and that was a fruitful suggestion.
Congrats on your granddaughter @Jeffnlu
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The post above is the most practical advice in this whole thread.
How about putting together a 1/10oz gold eagle set. Buy a 2019 and a 1986 this year, a 2020 and 1987 next year, until the set is complete, etc...
We did birth year sets for the grandkids.....another one on the way the way this St. Patrick’s Day.
Because of long distance we only see them about every two months or so. Really stinks believe me.
I’m not sure if there still around but our family always bought US Savings Bond at births and baptisms. My kids cashed them in for college useages.
Most kids I knew cashed their savings in before college. Well before. Me included.
Unfortunately I have seen grandparents ruin grandkids by spoilage and interfering with the parenting of the parents. Not saying this would be the OP’s case.
Best advice I could give would be that you include them in a will or trust with stipulations.
Congratulations on your first grandchild.
Diapers.
Then a 528 savings plan, with an eye toward college. Try Utah state.
I asked the same exact question for my daughters when I first joined this forum. I ended up with two completed silver proof sets and two completed sets of ASE .
But in the end, they were happier with two completed sets of my little ponies toys collection instead. One set we played with while the other set I kept in the closet as spare.
As an investment , the value of our silver collection went down . But if we sell some of our extra my little ponies toys that are still in mint package on amazon or ebay, we would earn 10 times more than we put in.
If you want to gift some Coins, get a new roll of Lincolns each year. Get them from your Bank at face value.
Anything above 50 cents, do it in Cash , Stocks ....... anything but Coins at a premium.
A growth account for future education is a great idea... Along with that, I give all the newborns in the family an ASE the year they are born. Cheers, RickO
My grandfather gave me some indian cents and a few Peace dollars he pulled from circulation; they have little value but I remember him every time I see them. So I would suggest you give her a silver eagle every year and put the money into an equity index fund.
Had I understood the rising line of the S & P index chart, along with the value of staying in the market through down times, I would be have had beaucoup bucks today.
Commems and Early Type
I'd echo the suggestion for a 529 tax-deferred college fund for each grandchild as they come along.
Every Christmas, I've also given each grandchild since the year of their births the annual proof American Silver Eagle, just for the cool factor.
Here's a warning parable for coin collectors...
High dividend ETFs such as KBWD, MORL, or MRRL. Over the years the compounding from reinvesting will be very worthwhile.