Taking care of and growing your money is an important life skill. However, learning the art of investment can be a daunting job. I didn’t learn much about investing and stocks until about a year ago. Prior to that we were in debt and I was so confused about how any of this worked.
One of the main reasons for selling our home and buying an RV was to pay off debt and build generational wealth. I did not come from money, but my son will. I may never be a millionaire but my son will be . And I am making all the right financial moves now so that I can secure a solid financial future for Aiden.
So, when I began to get the hang of it, I decided that introducing my son to the concept of stock investment as early as now will help him learn the importance of money management. I also decided that I would make sure to share my knowledge with anyone and everyone interested in learning more.
In this blog post, I will be sharing exactly what stocks and index funds are in Aiden’s accounts and why I chose them.
Please note that this is NOT financial advice. This is only an account of my personal experience. You must do your own research and/or seek help from a financial advisor before making any investments.
Types Of Investment Accounts
There are 3 main types of investment accounts you can open for your kids to ensure that you’re setting them up to be financially independent and successful when they are older.
- Roth IRA
- Custodial UTMA / UGMA
- 529 College Savings Plan
Aiden has all 3 of the accounts listed above, and I opened them online with Fidelity.com. You can see the link for each one below.
1. Fidelity Roth IRA
This account can be opened and managed by any adult—parent, grandparent, aunt, uncle, family friend—on behalf of a minor earning income.
2. Fidelity UTMA/UGMA
A Fidelity custodial account, sometimes called a UTMA/UGMA account, is a brokerage account for investing in stocks, bonds, mutual funds, and more. It can be a great way to save on the child’s behalf, or to give a financial gift. The money in this account belongs to the child.
3. Fidelity 529 College Savings Plan
529 plans are flexible, tax-advantaged accounts designed specifically for education savings. Funds can be used for qualified education expenses for schools nationwide.
Make sure to open a Roth IRA and Brokerage Account for yourself while you’re at it too. Although investing for your children is important, it is still important to invest in yourself too. It is so important for us to think about our own retirement as well. Below are the accounts that I have with Fidelity. I’ll need to do a detailed post on this as well.
Other reputable and well known, reputable and recommended banks that offer the same accounts for kids are Vanguard and Charles Schwab. I chose Fidelity because of ease of use and really good customer service. However, all of them are just as good. I have no ties to them whatsoever, just really enjoy using them.
I have a very detailed post about each of these accounts and you can read that here – “The Best Way To Save For Your Child’s Future“. Make sure to read it first as that’ll help give you a general idea of what to do and what to expect when investing.
Long Term Stock Investments For Your Kids
Owning a stock in a company simply means owning a piece or fraction of said company. Below are the exact stocks in Aiden’s account. Every time I put money in his accounts, I buy one or two of these stocks below.
1. Nike (NKE)
Buying shares from Nike can be a good option. Though interrupted with minor lapses, Nike stocks have a strong portfolio and seem to perform well when invested for the long term.
2. Coca Cola (KO)
Though I don’t have the expertise of a professional financial advisor, I can say from its reports that Coca-Cola stocks will help your kid secure steady growth of their money for future expenditure.
3. Disney (DIS)
Walt Disney stocks are known to offer stable and steady revenue to its investors. If you are a rookie in money management, investing in Disney stocks can be the ideal starting point for you. It has a diverse portfolio and offers low risk.
These stocks are suitable for long-term investment plans. Walt Disney experienced its first hard setback in 40 years in 2020 due to the pandemic. Nevertheless, its share value has soared high again this year.
4. Mattel (MAT)
I am sure your kid owns toys from Mattel subsidiary brands like Barbie and Fischer Price. It is one of the most popular Toy brands that I’m sure your kids love to play with.
Much like Hasbro, this brand, too, had seen some setbacks in 2020. But Mattel has shown signs of improvement in its online sales this year.
5. McDonald’s (MCD)
Who doesn’t love McDonald’s? This company has a stable portfolio and has increased its dividend value for the last four decades. Though it has experienced a setback during the pandemic, you can trust them to revive quickly and prove to be a reliable income-generating asset for you.
6. Procter and Gamble (PG)
Procter and Gamble is one of the most renowned hygiene and healthcare companies. It has been in the industry for a long time, and investing in its shares will provide you with a promising, long-term asset.
7. Hasbro (HAS)
From the classic board games to much-loved GI Joe figurines, Hasbro has been a part of everyone’s childhood. The company has also diversified its business in the field of digital entertainment recently. Hasbro also collaborates with renowned brands like Disney and is known to generate high-value revenue.
Though the brand has seen some rough patches in 2018, you don’t have to be a professional to infer from its current growth pattern that Hasbro stocks have the potential to do well in the long run.
8. Apple (AAPL)
In a world of ever-evolving technology, the name Apple is recognizable to most children. I was impressed by its performance rate and invested in Apple Stocks for my son. Apple is one of the world’s largest companies that manufactures premium hardware, software, and innovative gadgets.
Judging from its continued dominance in the market, I can predict that Apple stocks will come with a promise of longevity and offer your kid a secured source of income to cover his expenses.
9. Microsoft (MSFT)
If your kid uses a computer, whether at his school or home, he must be familiar with Microsoft. As the company continues to evolve, its stock prices have reached impressive heights. It has also diversified its business portfolio in the past few years, providing you with ample opportunities to grow your money.
I recently invested in Microsoft stocks on behalf of my son, and judging from its growth pattern, I believe it will do well in the future.
10. Costco Wholesale Corporation (COST)
If your kids like to go shopping with you, it is impossible that they haven’t heard of Costco. Costco is one of the largest wholesale shopping center chains that has about 809 wares worldwide. The company has built a strong reputation with its customers over the decades and offers powerful revenues to its investors.
Though its stock prices have spiked during the pandemic, it has come down to a stable rate now. If you choose to invest in these stocks, it is recommended by financial experts to keep them for a minimum of five years to earn the best returns.
11. ConocoPhillips (COP)
ConocoPhillips is an upstream crude oil and natural gas company. It has a strong presence across 16 countries and offers a significant and profitable investment opportunity.
The COP stocks are cost-effective and have relatively low risk than most single stocks. The company anticipates generating strong revenue in 2021 and beyond. This is one of the stocks recommended by Warren Buffet.
Other Stocks In Aiden’s Account
Aiden has these other stocks in his portfolio, and there’s not much research on whether they are going to be good long term or not, however I bought a few shares for him. This may be a hit or miss, we’ll see as the years go by.
12. Tesla (TSLA)
Due to its prominence in the electric vehicle industry, Tesla has become a well-known name among the youth. Elon Musk, the founder and CEO of Tesla, has been very active in the past few years in promoting the concept of a sustainable future. Tesla exhibits an excellent prospect of share value improvement in the near future.
13. Nio Inc. (NIO)
In fact, Nio Inc. is one of the fastest-growing electric vehicle companies, much like Tesla. Though the stocks from this brand are not as popular as Tesla’s, they do have impressive growth potential.
According to experts, the NIO stocks will see a great boost in their value very soon. Recently its price has declined considerably, making it a more favorable investment.
Other Stocks I Want To Purchase
I want to, but I haven’t purchased these stocks below because of how expensive they are. If you do a simple google search you can find the price. These are really good long term stocks too.
- Amazon – (AMZN)
- Google – Alphabet Inc – (GOOGL)
Long Term Index Fund Investments
Though your child might not fully comprehend what Index funds are, they are one of the best ways to secure their future. It will give you a broader exposure to the stock market at once, without the need to buy multiple single stocks.
Every time I put money in Aiden’s account, I purchase one or two stocks for him. After that, I put ALL of the rest into purchasing index funds. Index funds are the safest way to go when investing long term for your kids.
Basically, he has more invested in index funds than he does in single stocks, however I still wanted to make sure he had a few solid single stocks with long term growth.
14. Fidelity Total Market Index Funds (FSKAX)
FSKAX has more than 3400 holdings, each company constituting not more than 4% of the overall portfolio. These funds are ideal for long-term investment and can give you an impressive annual return. In addition, you would have to face a much lesser risk than buying single stocks.
15. Fidelity 500 Index Funds (FXAIX)
The FXAIX Index funds are one of the most accessible and best-performing Fidelity funds. The fund holds shares from renowned companies like Microsoft, Apple, Amazon, Facebook, and Google. Though it poses a higher risk than other fidelity funds, your investment portfolio will be exposed to better growth chances.
Watch this video below with your kids. It’ll help you and them understand why index funds are so amazing and why I invest the majority of Aiden’s money in index funds and just a minority of it in stocks.
Other Index Fund Investments
Here are some other safe long term Index funds that are recommended and I plan to slowly invest in for Aiden.
- FZROX – ZERO Total Market Fund
- FZILX – ZERO International Fund
- FNILX – ZERO Large Cap Fund
My Thoughts On Generational Wealth
I hope this article has helped you to get some ideas about how you can begin an investment portfolio for your kid and what stocks you can buy for them. These companies are highly reputable and trustworthy and are known to provide their customers with high-yielding stocks ideal for long-term investments.
You can teach your kids the art and science of investing in assets right from a young age to ensure they are ready to make their own investment decisions when they are of age! So make sure to discuss their investments with them.
Talk to your kids about growth and everything so they can get an idea of what to expect along the way as well as learn how to be financially savvy themselves. This will help them a lot when they are older so they’ll be cognizant about money management and more.
