A blueprint to set your grands up for retirement.

[RSKY]

Land is the only thing that is limited, no more will be made, yet the population doubles at an ever increasing rate. I think that is an excellent legacy.

I agree. But it takes a large investment to buy land. You can't buy a thousand dollars worth of land and let it sit idle for fifty or sixty years. And it takes an effort to maintain that land. What I am suggesting is to start when the grandchild is born, put the money in an account so that you have control but they will receive it on your passing. And forget about it. Well check on it every year or so. Let it ride thru the ups and downs of the market. Maybe change to a different mutual fund, or split it between several, but let it sit and grow.

What I am suggesting will only cost you $1000 for each grandchild.

RSKY

 

[RayIN]

Food for thought. I once worked with a man who was very frugal and planned everything out. He retired at 65, took monthly payments from the company retirement fund and SSA.
He retired at 65, and was found by his wife, dead in the front yard; with his first retirement checks in his shirt pocket.

 

[CH4Ohio]

I was commenting on the first paragraph of your post about this "government program".
I assume that responsible people will make provisions for their own families with their own money as they see fit.

 

[ultrarunner]

You have left out the cost of inflation. Here is a response from CoPilot AI

AI Overview

In 30 years, $1,000 will be worth much less in buying power due to inflation (potentially $2,000-$3,000+ depending on rate), but if invested, it could grow significantly, maybe reaching $10,000 to $20,000+ (or much more with monthly additions) depending on returns like 6-8% annually, highlighting how saving and investing protects against inflation's erosion
.

If you just keep the cash (Inflation Effect)

• With average inflation (e.g., 2.5-3%): $1,000 today might only buy what $2,000-$3,000 buys in 30 years, meaning its purchasing power is cut in half or more.
• Example: Using a 3% inflation rate, $1,000 today could be worth around $2,427 in 30 years in terms of future purchasing power, but its real value (what you can buy) drops significantly.

If you invest the $1,000 (Growth Effect)

• Conservative (e.g., 5% annual return): Could grow to around $4,322.
• Moderate (e.g., 7% annual return): Could grow to about $7,612.
• Strong (e.g., 10% annual return): Could grow to over $17,000.
• With monthly contributions: Investing $1,000 monthly for 30 years at 6-8% could see you end up with well over $1 million, showing the power of consistent investing.

Key Takeaway

• Holding cash loses value over time.
• Investing $1,000 once, or even better, monthly, dramatically increases your future wealth and combats inflation's negative effects, making it essential for long-term financial goals.

People use to joke about the $20 loaf of bread but I think I may live long enough to see it…

 

[RSKY]

I'd like to see financial concepts like the power of saving, compound interest, and not borrowing money taught in schools since parents clearly aren't doing it. I'm all for government programs like 529Bs, IRAs, and 401Ks that encourage saving but I'm on the fence about about giveaway programs like the one proposed. I don't think it sends the right message for a government that is $38 trillion in debt to be giving away money.

I believe the program is being financed by the Dells and will cost the government nothing. Well it may cost some administrative fees. But the bulk is privately financed.

RSKY

 

[ultrarunner]

I realize that there are many alternatives to this but it is a fairly cheap easy way to put some money aside for a grandchild. It can serve as a tool to teach them about financial matters as it has with my 16-year old granddaughter. I misspoke above when I said none of the grands knew about the funds in their names because I let it slip when she was working with me on something else on my computer. She is now paying more attention to money matters and has it in her head that she will go to school studying finance instead of pursuing some worthless degree. My daughter has remarked a couple times that the grand is becoming as stingy with her money as her granddaddy. (Makes me proud!).

My whole point of this post is to encourage TBNers to start an account in their name with their grands as the beneficiary to help them in the future. Heck, the US may not exist by the time my 2-1/2 year old grand reaches her fifties or sixties. But at least I have made the effort to provide for her in the future. I just hope that she remembers me when she receives her inheritance.

I wonder how this could impact paying for higher education which is often asset/income based?

 

[ultrarunner]

Food for thought. I once worked with a man who was very frugal and planned everything out. He retired at 65, took monthly payments from the company retirement fund and SSA.
He retired at 65, and was found by his wife, dead in the front yard; with his first retirement checks in his shirt pocket.

I might end up that way… men in my family all ended up on the losing side with social security being they basically died on the job… makes me wonder how it can go broke when many never collect and many more only a few years?

 

[Jstpssng]

I wonder how this could impact paying for higher education which is often asset/income based?

It's only asset/income based if you want somebody else to pay for it.

 

[EscapedSuburbia]

I believe the program is being financed by the Dells and will cost the government nothing. Well it may cost some administrative fees. But the bulk is privately financed.

RSKY

The program was created by the Big Beautiful Bill and is government funded. Private organizations and parents are allowed to contribute, but the seed money comes from government borrowing.

 

[Jstpssng]

The program was created by the Big Beautiful Bill and is government funded. Private organizations and parents are allowed to contribute, but the seed money comes from government borrowing.

This is what I came up with also. Yet the OP's point is still valid, using your own money. I do disagree with him on one point. If the kid is made aware of the fund at an early age he/she will learn by watching it grow. That lesson is more important than the money itself.

 

[ultrarunner]

It's only asset/income based if you want somebody else to pay for it.

What I found disturbing is the nephew and nieces, all university grads or soon to be were required as part of the admission process to produce family financials…

Brother and his wife said we are not applying for any assistance and paying full freight but university said it is required for University Admission as the data affects funding…

North Eastern in Boston was the most tenacious.

 

[ultrarunner]

This is what I came up with also. Yet the OP's point is still valid, using your own money. I do disagree with him on one point. If the kid is made aware of the fund at an early age he/she will learn by watching it grow. That lesson is more important than the money itself.

Did the same with youth credit union accounts that pay 7% on the first $1,000.

3 of the 5 really took an interest in interest and it was the younger 3 which surprised me.

There eyes popped seeing $70 added to the account and even the 9 year old was all in for having her money work for her.

The accounts offered lots of options including checking and debit card, atm, online access, etc.

 

[bigtiller]

I believe the program is being financed by the Dells and will cost the government nothing. Well it may cost some administrative fees. But the bulk is privately financed.

RSKY

That is the way it was explained to me.
And the reasons for my questions in post 16.

 

[RSKY]

Maybe commodities and rural land with water and fertile soil for a self sustaining lifestyle?

I’ve seen profitable business after business leave my state, some with very long history here.

The only losses I’ve realized have been market related company stock.

How many commodities and how much rural land with water and fertile soil can you buy for $1000?

Mutual Funds do not invest in single companies but in many companies. An S&P 500 Mutual Fund by definition invests in 500 companies.

I too learned my lesson investing in single company stocks and now only invest in mutual funds.

RSKY

 

[RSKY]

What is the point of this exercise?

The point is in the title of the post. Setting up your grandchildren for their future many years after you are nothing but dust. I am merely showing a way to provide for them without spending a lot of money. ONE THOUSAND DOLLARS is all you need to invest. Don't say anything about it to anybody. Just let it keep building and check it once a year on their birthday.

RSKY

 

[RSKY]

I was commenting on the first paragraph of your post about this "government program".
I assume that responsible people will make provisions for their own families with their own money as they see fit.

That is what I am advocating. Spend a little now and set up young children for the future. The "government program" giving $1000 to newborns just got me thinking, thus the post. This is something I have already done for my grands and they will have much more than my figures show. I will check on their accounts and adjust them if they need to be adjusted but they will stay invested as aggressively as possible.

RSKY

 

[ultrarunner]

How many commodities and how much rural land with water and fertile soil can you buy for $1000?

Mutual Funds do not invest in single companies but in many companies. An S&P 500 Mutual Fund by definition invests in 500 companies.

I too learned my lesson investing in single company stocks and now only invest in mutual funds.

RSKY

Precious metals?

 

[grsthegreat]

By the time a new kid reaches 65, $500,000 will purchase a new car…..maybe

 

[RSKY]

I wonder how this could impact paying for higher education which is often asset/income based?

The way I have my grands funds set up it should not. Well.....as long as my wife or I am alive it is still in our name. Only after we kick the bucket will the funds go to them. Judging from the way our parents, aunts, and uncles have survived we have planned everything out for us to live to our nineties. We are both 71 and if we live twenty more years the youngest grand will be 22. Both that one's parents have very good paying careers and she will not have to worry about money. Her dad is an only child and his mother is definitely not hurting for money.

RSKY

 

[RSKY]

This is what I came up with also. Yet the OP's point is still valid, using your own money. I do disagree with him on one point. If the kid is made aware of the fund at an early age he/she will learn by watching it grow. That lesson is more important than the money itself.

HA! I agree to some point. At first I didn't want any of them to know and let it be a shock when we passed. But the interest the sixteen year old has shown has been outstanding and has changed my mind. I may show the others when they also turn sixteen. Don't think any of them will knock me off to get that inheritance. Plus I can show them how taking money out early will lower the end result by a huge amount.

But kids tend to talk and the middle girls, ages 12 and 10, cannot keep a secret. I don't want this blabbed all over a middle school that they will inherit a million dollars. By the time I pass it won't be anything near that amount but you know how kids talk and brag.

Oldest of my grands is very artistic. She is making spending money by making posters for people. Plus she is in demand for babysitting. The next three are very good at math. I believe all three tested distinguished in math in school.

The little one wears a crown and proclaims that her name is 'Queen Ro Ro' (her name is Rosie) so I don't know what her strength will be. She is as manipulative as can be gettin her siblings and cousins to do what she wants so she will probably be a politician.

RSKY