Extra savings for Children

[ZZJ]

Question...

Have 3 young children (<3 yo) and saving for each of their college educations with 529c, contributing yearly with 10K each. Additionally, I am currently stashing away $100/month into a online savings for each. That money in the online saving is making little interest ~ 1.2%. I was thinking about opening brokerage accounts for each child and investing that money into an ETF like SPY, QQQ, or VOO. Thoughts? Any other ideas on what to do with that cash.

Thanks

[G]

Do you want to adopt me?

Where/how you invest obviously depends on your financial goal for that money.

[WallStreetPhysician]

ZZJ wrote:

Question…

Have 3 young children (<3 yo) and saving for each of their college educations with 529c, contributing yearly with 10K each. Additionally, I am currently stashing away $100/month into a online savings for each. That money in the online saving is making little interest ~ 1.2%. I was thinking about opening brokerage accounts for each child and investing that money into an ETF like SPY, QQQ, or VOO. Thoughts? Any other ideas on what to do with that cash.

Thanks

Click to expand...

How about just putting that money into the 529 as well? This assumes that you contributed 10K because that maxed out your state tax deduction. Do you think that you will likely send your children to private colleges, or is there an excellent state college where you live? Given that you are a physician, at least one your children will probably go to grad school, so that 529 money will eventually get used (and if not, the grandchildren / nieces / nephews can get the money).

[VagabondMD]

I have done all of the above (529, Brokerage account, and savings account) for the children, now (2) teens. I think that your savings and investing strategy and commitment will serve them well and afford them  lots of options.

[FIREshrink]

our kids have:

an "emergency fund of around" $100 each in a local credit union;

the rest of their funds invested in UTMAs at Vanguard, in the Target Retirement 2060 fund;

separately, 529s.

The options you mention - SPY, QQQ, VOO - are not diversified enough in my opinion. Kids should have some international stocks, and some fixed income.

The Vanguard Target Retirement funds have a minimum of only $1000 and are very inexpensive.

[Kamban]

ZZJ wrote:

Question…

Have 3 young children (<3 yo) and saving for each of their college educations with 529c, contributing yearly with 10K each. Additionally, I am currently stashing away $100/month into a online savings for each. That money in the online saving is making little interest ~ 1.2%. I was thinking about opening brokerage accounts for each child and investing that money into an ETF like SPY, QQQ, or VOO. Thoughts? Any other ideas on what to do with that cash.

Thanks

Click to expand...

Once I felt that I have made sufficient contribution to my daughter's 529 plan I started a UGMA for her ( we don't have UTMA for our state) at Vanguard and started contributing for it. I have it invested in a mix of large, mid cap and small cap index funds. I plan to contribute for another 6 years and hope that at her retirement in 40+ years, it will be a good sum.