Getting an early start saving and investing for your children's or grandchildren's future has never been more important. Whether your goal is to save for college or invest a little extra each month to help prepare for a child’s future, it's never too early to start.
As you know, the cost of college tuition to a four-year university has skyrocketed over the last decade. And social safety nets such as social security are likely to look much different by the time a child born in 2011 reaches retirement age. Direct investing with DRiPs is a simple and affordable way to give your child a head start for both college and retirement.
Let’s take a look at how you could have prepared for your child’s education if you had invested just $100 a month for child who would be going to college in 2012:
$40,143 in H.J. Heinz (HNZ)—a gain of 85.1% – with no broker fees!
$39,123 in Hasbro Toys (HAS)—a gain of 80.2% – with zero broker fees!
And an impressive $61,869 in Limited Brands (LTD)—a gain of 189%. That’s an average gain of 10.28% annually.
Now, we’ve heard people say “Well, 10.28% isn’t that impressive.” We disagree. And here’s why…
These numbers point out a very important key to DRiP investing and dollar-cost averaging: It’s not a get-rich quick scheme. In fact, it’s the opposite. It’s a safer, long-term way to build wealth that experts from Suze Orman to Kiplingers agree on.
The figures above represent profits that accumulated despite the 2008 meltdown and the so-called “recovery” we’re mired in. So no matter what the market is doing – bull or bear – you’re slowly accumulating wealth in safe, secure blue chip companies (not “hot stocks of the week” that turn sour weeks or months later).
Plus, you save on broker fees. If you had gone through a broker those same purchases would have sapped your earnings and interest accumulation $2000 or more.
DRiP Portfolio for Kids
Now you can get started building wealth for your child’s or grandchild’s future. FirstShare has put together a starter portfolio especially for children. Each DRiP stock in this portfolio represents a company that we feel will be engaging to children, offer a stable dividend and maintain little-to-no DRiP fees.