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Financial gifts for 1 year old babies?
Old 02-07-2013, 02:03 PM   #1
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Financial gifts for 1 year old babies?

I have a niece and nephew who are turning one pretty soon (they are cousins, not twins). I used up all my brain power to figure out Christmas toys just two months ago. I'm sure a 1 year old won't remember getting a gift, so I want to do something practical and useful.

I saw this UGift thing - were you can donate money towards college, but it's still confusing me. I don't think either have any 529s set up yet.
https://thegiftplan.s.upromise.com/c...ml#whatisugift

Then there's this which buys stock as a gift through One Share:
Gift Ideas for a Baby

Savings Bonds? To cash out when they are 18?

So maybe you get where I am going with this - what should I give? Also I have a 6 year old nephew, and I kind of missed the boat on him. Do I make up for it to make it even by getting him something similar? I"m sure he'd rather have a Nintendo 3DS game.
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Old 02-07-2013, 02:15 PM   #2
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Based upon what I have read it was last year that paper bonds were ended, it now looks like a mutual fund in that every thing is electronic. The treasury site did not talk at all about not selling them electronically. Of course they earn .2% right now so not a great investment.
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Old 02-07-2013, 02:23 PM   #3
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We gave silver coins. I made each child a silk pouch with their name embroidered on it that can store the coins over the years.
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Old 02-07-2013, 02:26 PM   #4
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I just asked my sisters if they have a 529 open yet (if they did they'd be really on the ball!).

This Ugift allows you to put money towards another's college plan as a gift.

"Ugift is a new way to invite family and friends to celebrate a child's milestones with the gift of college savings. This easy-to-use service lets the special people in your life make gift contributions directly to your 529 plan account."

That would be so great if that would work. I'd make it a regular birthday contribution.

RetiringAt55 Do the Silver coins appreciate? I know nothing about them other than my mom has a few in a pouch herself!
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Old 02-07-2013, 02:32 PM   #5
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How much were you planning on spending? My initial inclination was that you could open an account with Vanguard in each of their names but the lowest minimum is $1,000. We used the STAR fund for our kids and were quite happy with it.
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Old 02-07-2013, 02:35 PM   #6
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How much were you planning on spending? My initial inclination was that you could open an account with Vanguard in each of their names but the lowest minimum is $1,000. We used the STAR fund for our kids and were quite happy with it.
That sounds pretty cool and along the lines of what I was looking for (something that just grows). Although I was thinking more like $50-100.

I missed the boat on the other nieces and nephews 1st birthdays (they are 3, 4, 6 right now). Don't want to go too big since I didn't do that with the others.
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Old 02-07-2013, 02:37 PM   #7
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They were actually "silver bullion" so they should go up as silver does.
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Old 02-07-2013, 02:48 PM   #8
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You can set up a 529 for them. Maybe even get a State tax break depending where you live.
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Old 02-07-2013, 02:51 PM   #9
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You can set up a 529 for them. Maybe even get a State tax break depending where you live.
I can set up a 529 even if I don't have kids?
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Old 02-07-2013, 02:52 PM   #10
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See https://investor.vanguard.com/what-w...llege/overview and https://uii.nysaves.s.upromise.com/c...andfamily.html

It looks like you could set up a Colorado, Missouri or NY 529 that has Vanguard funds backing them with lower minimums ($25). I took a quick look at the NY version and you do not have to be a NY resident to set up an account.

YMMV.
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Old 02-07-2013, 03:03 PM   #11
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See https://investor.vanguard.com/what-w...llege/overview and https://uii.nysaves.s.upromise.com/c...andfamily.html

It looks like you could set up a Colorado, Missouri or NY 529 that has Vanguard funds backing them with lower minimums ($25). I took a quick look at the NY version and you do not have to be a NY resident to set up an account.

YMMV.
Very cool! I will look into this further now. I would plan to donate maybe $50 on each birthday at first? I have 5 nieces/nephews so I probably should do that for everyone on all their birthdays.
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Old 02-07-2013, 03:07 PM   #12
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Very cool! I will look into this further now. I would plan to donate maybe $50 on each birthday at first? I have 5 nieces/nephews so I probably should do that for everyone on all their birthdays.
Note that some states offer residents a tax credit for a 529 contribution, but only if you place it in one of that state's plan offerings.
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Old 02-07-2013, 03:08 PM   #13
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You can set up a custodian account with Schwab ( I think they probably have similar account with Fidelity , Vanguard etc) if you do not want it restricted to educational use only. The minimum to open is $100, and there is no monthly fee, and you can invest in Schwab no load mutual funds with a minimum of $100 in those accounts.

Custodial Savings Account: Schwab Brokerage: Custodial Account

Mutual Funds

If you put a $100 each in a S&P index fund and let it grow for 30 years, it may amount to a tidy sum for them.
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Old 02-07-2013, 03:11 PM   #14
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Note that some states offer residents a tax credit for a 529 contribution, but only if you place it in one of that state's plan offerings.
That would be a bonus!

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You can set up a custodian account with Schwab ( I think they probably have similar account with Fidelity , Vanguard etc) if you do not want it restricted to educational use only. The minimum to open is $100, and there is no monthly fee, and you can invest in Schwab no load mutual funds with a minimum of $100 in those accounts.

Custodial Savings Account: Schwab Brokerage: Custodial Account

Mutual Funds
I did not know about Custodial Accounts! Lots of investigate now.

If you were a baby what would you want for your 18+ year old self? Just kidding!
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Old 02-07-2013, 03:23 PM   #15
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That would be a bonus!



I did not know about Custodial Accounts! Lots of investigate now.

If you were a baby what would you want for your 18+ year old self? Just kidding!
All I can say is that when I was 18 or 19 and took all those EE bonds my grandparents had given me over the years and cashed them I was one happy camper!
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Old 02-07-2013, 03:26 PM   #16
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All I can say is that when I was 18 or 19 and took all those EE bonds my grandparents had given me over the years and cashed them I was one happy camper!
I cashed in some too when I was 18 and I recall it being $850 or so (for a $25 bond) which went right to my tuition at the time. My mom said it was no where near that much however. I remember it being such a cool idea (so I think it was $850). I would not remember $25.
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Old 02-07-2013, 03:30 PM   #17
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I can set up a 529 even if I don't have kids?
I have them for both my Grandkids. Check out the program in your State.
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Old 02-07-2013, 03:36 PM   #18
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I bought an I-bond earmarked for my godchild in my own treasury direct account. She'll get the proceeds on her 18th birthday.
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Old 02-07-2013, 03:43 PM   #19
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Agreeing with the suggestion for 529's.

My dad started our boys 529's. And since he did the work, I just contributed to that one... and inherited it when he died. (Kids are beneficiaries... but ownership transfers seperately.)

My step mom gives $50 contributions each year on their birthdays, as she does for all her grand kids.

Whenever someone asks what the boys need - I suggest contributions to the 529.

The nice thing about 529's vs some of the other suggestions - no taxes to worry about for your kids. A friend had a relative gift the kids with stock - now he has to file taxes for them. (It's a dividend paying stock.) Another friend's parents set up trusts for the grandkids - and it took him longer to do the kids taxes than his own. Ironically, his dad was a tax attorney - and he's the one that set up the trust.
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Old 02-07-2013, 03:53 PM   #20
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I cashed in some too when I was 18 and I recall it being $850 or so (for a $25 bond) which went right to my tuition at the time. My mom said it was no where near that much however. I remember it being such a cool idea (so I think it was $850). I would not remember $25.
Probably you did not get that much. To double your money, it requires 7 years if times are good. So it was unlikely $25 will grow to 850 on saving bond interest alone. You may get that 3 doubles in 21 years with $100 in a stock index fund and get to $800.
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