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Posted: 9/22/2014 2:00:54 AM EDT
[#1]
Buy gold, it's down to $1,200!!!
Wait till it hits $2,500 and sell, you would have close to $80k |
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Posted: 9/22/2014 2:17:50 AM EDT
[#2]
last I heard silver was at 17. wait till its at $35 again? lol
Go back to 1991 and buy cisco systems stock?  |
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Posted: 9/22/2014 2:19:36 AM EDT
[#3]
I'm leaning towards agreeing with buying gold. Imagine how better off they'd be selling gold in 10-15 years when they want to buy a house or something instead of having 20,000 in a savings account.
It's a nice thought. Maybe invest it into something for them? |
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Posted: 9/22/2014 2:35:35 AM EDT
[#4]
What do the kids think they will eventually want to spend the money on? College in a few years, a house in a decade? Depending on when the funds were intended on being used, I would pick an investment vehicle which had appropriate risk for the term of the investment.
College, next year? CD/Savings. House, 5-10 years? A solid mutual fund. Retirement, 50+ years? Aggressive funds or PMs.
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Posted: 9/22/2014 4:50:38 AM EDT
[#5]
I say it's time to learn about the stock market.
What would I do if I were in your shoes? 1. Open accounts* at Vanguard (or other low cost investment firm). 2. Invest some of the $ now (S&P500 ETF would be my recommendation**): let them decide how much (competition of sorts between the two). 3. Have them watch the market and decide when/how much to invest. In the long run, they will most likely find that the one who invested the most, the earliest has the most $ and along the way they will learn about the stock market, economy, etc. * If you put the accounts in their names there will be no tax consequences for you and probably none for them anytime soon (hey, they get to learn about short and long term gains, too!). ** I would constrain them to the S&P500 initially; you don't want to get bogged down in picking individual stocks since you don't have enough capital to do so efficiently and commissions would eat you alive. At a place like Vanguard, mutual fund and ETF trades are free, so no commissions. As close as I get to individual stocks would be looking at the makeup of the S&P500, which is predominantly Apple, then watching how the index reacts to economic, political, etc. news. And yes, I shot post # 19,000 on this answer! |
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Posted: 9/22/2014 8:45:57 AM EDT
[#6]
Quote HistoryQuoted:
Buy gold, it's down to $1,200!!! Wait till it hits $2,500 and sell, you would have close to $80k And still have 21k worth of buying power!
But seriously this is a good idea. I would put 25% in gold and invest the rest in a index fund. |
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Posted: 9/22/2014 8:48:23 AM EDT
[#7]
Index fund or ETF like SPY.
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Posted: 9/22/2014 8:49:45 AM EDT
[#8]
What are their college plans and how is that going to be paid for?
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Posted: 9/22/2014 7:26:23 PM EDT
[#9]
Invest it in the stock market. If they let that compound until they retire. It will be millions.
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Posted: 9/23/2014 9:23:04 PM EDT
[#10]
Thanks for the investment ideas. If it were my $$$, I'd probably spend a chunk on PM's and the rest in and index fund as suggested as that sounds reasonable, but again I don't really know what I'm doing so...
Main thing I'm worried about right now is if the IRS will somehow think this money came to me since my name's on the checks. Then get taxed again and they lose more of their inheritance. So I'm still hung up on this. Might swing by the IRS building this week to see if they can give me the low-down... Kids are in high-school, Sophomores and Seniors. No college funds.  Oldest want to join the Army, go to ranger school and SF. I respect and may be partially responsible for that desire, but I'm pushing him toward college since he's smart. He's in the application process with West Point but a bit a little bummed after not getting selected for the summer leadership camp. With encouragement he's applying to Texas A&M and Norwich and for the Army and Navy ROTC scholarships... Youngest is smart like the first and express and interested in college, perhaps Veterinary school, but that's 3 years off. Also in or borderline top 5% of class.
So, the cash could be helpful in many ways in the next few years as well as long-term. It's not going to pay for a big-name college. I can swing Jr. College if it comes to that, but I'd like my kids to do better than I have. Texas A&M Aggies are known. Richland Thunderducks, not so much. In any case, I'm going to do my best convince them to lock the bulk up so it doesn't get pissed away. Thanks again folks. |
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Posted: 9/23/2014 9:32:08 PM EDT
[#11]
Quote HistoryQuoted:
I say it's time to learn about the stock market. What would I do if I were in your shoes? 1. Open accounts* at Vanguard (or other low cost investment firm). 2. Invest some of the $ now (S&P500 ETF would be my recommendation**): let them decide how much (competition of sorts between the two). 3. Have them watch the market and decide when/how much to invest. In the long run, they will most likely find that the one who invested the most, the earliest has the most $ and along the way they will learn about the stock market, economy, etc. * If you put the accounts in their names there will be no tax consequences for you and probably none for them anytime soon (hey, they get to learn about short and long term gains, too!). ** I would constrain them to the S&P500 initially; you don't want to get bogged down in picking individual stocks since you don't have enough capital to do so efficiently and commissions would eat you alive. At a place like Vanguard, mutual fund and ETF trades are free, so no commissions. As close as I get to individual stocks would be looking at the makeup of the S&P500, which is predominantly Apple, then watching how the index reacts to economic, political, etc. news. And yes, I shot post # 19,000 on this answer! They are quite competitive and this does seem like a good learning opportunity... Teach a man to fish... ETA: congrats on 19k. I have about 182 more years before I get there. ;) |
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Posted: 9/23/2014 9:41:48 PM EDT
[#12]
Get him a decent used corvette.
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Posted: 9/24/2014 10:04:56 AM EDT
[#13]
I think you should seek advice about this topic on bogleheads.com there is plenty of investment gurus there that can give you various advice related to how this can affect their eligibility for possible financial aid, tax implications and a bunch of other things you may have not considered.
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Posted: 9/24/2014 3:51:49 PM EDT
[#14]
Quote HistoryQuoted:
Get him a decent used corvette. Hell Yes 
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Posted: 9/24/2014 3:57:28 PM EDT
[#15]
PMags and Lowers.
But seriously, I would take $21K and break it down as $5k to a Roth IRA, $10K to a College 529 Plan, $5k in gold and let them have fun with $1k. |
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Posted: 9/24/2014 4:10:31 PM EDT
[#16]
Mini 5K -10K in Gold in 10 years this should be a 30% return minimum. I would say stock market, Index Fund but still risky. CDs are not paying anything now.
But guess what 10 years ago the closing price of gold was $435 so if you sold that today $1216 that looks like almost 200% profit margin. 179% to be more precise. Could have jumped out when it was $1800 would have been over 300% Let me know how that 2% CD over 15 does. So buying gold they should have over 60k in ten years. |
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Posted: 9/25/2014 6:33:30 AM EDT
[#17]
Gold and Silver, historically, have returned far less than stocks (and even bonds). The precious metals are good for trading, but they make terrible investments.
Gold's primary function is to protect purchasing power when the monetary system is in danger of collapse...it's like life insurance for your portfolio: you hope you don't need it. If you look back over the past 200 or so years, that's (almost) exactly what it has done: $10K invested in gold 200 years ago would be worth $26K (inflation adjusted, of course) today. Sounds pretty good...that is until you look at what $10K in bonds would be worth ($8M). How did stocks do? Your $10K would now be worth $56M. So even if the numbers are off a little bit, Gold was still a terrible investment. That's not to say one couldn't have made a lot of money trading Gold and Silver over the years (and all that requires is knowing when it is the right time to buy and the right time to sell  but if you believe that our monetary system is in danger of imminent collapse (like the bears have been predicting for the past 5 or so years, that as the monetary system sustained and then recovered from a fairly substantial shock) then Gold and Silver aren't really the right answer.
So should you have some precious metals as a hedge? Of course. But it should be the 5-10% that is protecting the other 90-95% of your portfolio. |
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Posted: 9/25/2014 6:54:01 AM EDT
[#18]
Quote HistoryQuoted:
Mini 5K -10K in Gold in 10 years this should be a 30% return minimum. I would say stock market, Index Fund but still risky. CDs are not paying anything now. But guess what 10 years ago the closing price of gold was $435 so if you sold that today $1216 that looks like almost 200% profit margin. 179% to be more precise. Could have jumped out when it was $1800 would have been over 300% Let me know how that 2% CD over 15 does. So buying gold they should have over 60k in ten years. LOL. If it worked like that, EVERYONE would be in gold. Gold was $240 or so in the first half of the 2000's. It can very easily go to THOSE levels again too, not just "highs". OP, read up on mutual funds and diversify into the market over a longer period of time to alleviate your risk. |
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Posted: 9/25/2014 2:59:08 PM EDT
[#19]
Open a Roth IRA for each kid, max it out for this year, wait a couple months till next year, max that bitch out again. 10k left spend on stuff for college, car, school shit, guns, tools and/or buy gold/silver. With gold/silver it's not an investment. We all may get lucky and sell it if it explodes in price, but it's meant to be a physical investment for when the dollar his the fan.
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Posted: 9/25/2014 4:31:30 PM EDT
[#20]
Quoted:
My minor teenage children each received an inheritance of $21,000. Checks were cut to me as their custodian. All estate tax obligations were paid on their 2013 tax returns. We’re in Texas if that matters. What estate tax obligations did you pay on their 2013 returns? |
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Posted: 9/25/2014 4:34:35 PM EDT
[#21]
Do they know you have it?
If not, wait until they buy a house and then surprise them with it. |
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Posted: 9/25/2014 7:40:36 PM EDT
[#22]
Quote HistoryQuoted:
I'm leaning towards agreeing with buying gold. Imagine how better off they'd be selling gold in 10-15 years when they want to buy a house or something instead of having 20,000 in a savings account. It's a nice thought. Maybe invest it into something for them? For a store of wealth that is designed to hold value, not grow value, I'd guess probably not much better off than they are today. I'm not going to argue the short term, but over the long term gold has a horrendous track record compared to investments. Keep in mind that gold generated a negative return for a 25 year period starting in the 80's after a big run up in the 70's. No appreciation, no dividends, and it actually lost value to inflation. It's rational that this would be the case because the day that holding gold made more sense than investing in some kind of business model, is the day that the capital markets go bone dry, every capital intensive business closes up shop and the smart money redeploys to the shiny stuff. Said another way, if gold made more sense as an investment (as opposed to a store of wealth) why would banks be lending money, why would companies have IPOs, and why would anyone bother to risk their capital to set up a business? If there are greater returns in simply holding precious metals, there is no point to doing any kind of economic value add activity. Short term speculation is another thing all together and it's a fine store of wealth, but not appropriate for teens with 50 years of compounding ahead of them. |
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Posted: 9/25/2014 7:56:55 PM EDT
[#23]
Quote HistoryQuoted:
Mini 5K -10K in Gold in 10 years this should be a 30% return minimum. I would say stock market, Index Fund but still risky. CDs are not paying anything now. But guess what 10 years ago the closing price of gold was $435 so if you sold that today $1216 that looks like almost 200% profit margin. 179% to be more precise. Could have jumped out when it was $1800 would have been over 300% Let me know how that 2% CD over 15 does. So buying gold they should have over 60k in ten years. Quote HistoryQuoted:
Mini 5K -10K in Gold in 10 years this should be a 30% return minimum. I would say stock market, Index Fund but still risky. CDs are not paying anything now. But guess what 10 years ago the closing price of gold was $435 so if you sold that today $1216 that looks like almost 200% profit margin. 179% to be more precise. Could have jumped out when it was $1800 would have been over 300% Let me know how that 2% CD over 15 does. So buying gold they should have over 60k in ten years. The phrase "Past Performance is Not Necessarily Indicative of Future Results" couldn't possibly be more appropriate than here. The reason that phrase gets tossed around is because most people don't bother to understand what their investments are designed to do or the fundamentals of what they are looking at. Presuming that gold will go up 30% per year in the next 10 years because it has over the past 10 years ignores everything that gold is and actually does when it is being treated as an investment. It's frankly a ridiculous assumption. Let me know how that 2% CD over 15 does. The beauty of a CD is that you actually know the answer to that question. Gold on the other hand gives you no so such certainty. People that bought Gold in 1980 had to wait over 25 years before they broke even and that's ignoring inflation. If you include inflation, they are still down big. It could double in value over the next 15 years but it could always stabilize at $600 and ride out another 25 year lull. Gold is so short on anything that resembles fundamentals that you'll never know ahead of time. For equities, you can look at an index fund with a particular earnings yield (earnings, not dividends) and projections regarding GDP growth and make a pretty reasonable assumption about what kind of returns you can expect over the long term. |
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Posted: 9/25/2014 10:23:20 PM EDT
[#24]
Quote HistoryQuoted:
What estate tax obligations did you pay on their 2013 returns? Quote HistoryQuoted:
Quoted:
My minor teenage children each received an inheritance of $21,000. Checks were cut to me as their custodian. All estate tax obligations were paid on their 2013 tax returns. We’re in Texas if that matters. What estate tax obligations did you pay on their 2013 returns? All the kids that received a part of the estate were were issued form K1's to pay their share of the estate's income taxes... CPA said it was all good, and filed returns for them and that there's would be no inheritance tax here in Texas. |
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Posted: 9/25/2014 10:33:30 PM EDT
[#25]
Quote HistoryQuoted:
Do they know you have it? If not, wait until they buy a house and then surprise them with it. They know, but that though did cross my mind especially after I found out it was that much. I have one about to enter military service, wants to go Infantry... Proud father, scared father. He's squared away and not looking to spend it, but instead save it, but if the worst were to happen I'd hate for him to miss out on something that would've brought a little more joy to his life. Kid wanted to pay to fix mom's car since it's not in the budget right now... Good kid, but that's not his responsibility. The twins have a couple of "trinkets" they want, but wish to save the rest as well. Oldest is in college and working part-time... He has a few bills to pay but we have discussed the Roth idea to get him started on retirement, a small secured loan with auto-payback to generate credit and mutual funds. |
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Posted: 9/27/2014 7:00:37 AM EDT
[#26]
I like the Roth idea, but they can only contribute an amount equal to their earnings up to the limit. No earnings = no contribution
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Posted: 9/27/2014 8:45:41 AM EDT
[#27]
I have been through this.
My suggestion would be to open a custodial account at Vanguard, and invest in mutual funds, like Index 500. If you call them, they will be very helpful in setting this up for you. I don't think you can open a roth with it, as it is not earned income. As far as tax consequences, there should be none for you. Just keep a good accounting of the funds, ie got check for $21K, deposited into vanguard, etc. Now for the bad tax part, though it probably won't impact you, if their unearned income from their investments exceeds $2000, they will pay your tax rate. |
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Posted: 9/27/2014 9:30:53 PM EDT
[#28]
My opinion, forget precious metals.
Index funds are fine. Woodsie gives good advice. Keep fees low, and don't worry about risk. A young person who re-invests dividends benefits from market volatility. Time is your friend in the investment world. |
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Posted: 10/17/2014 12:28:00 AM EDT
[#29]
Quote HistoryQuoted:
Open a Roth IRA for each kid, max it out for this year, wait a couple months till next year, max that bitch out again. 10k left spend on stuff for college, car, school shit, guns, tools and/or buy gold/silver. With gold/silver it's not an investment. We all may get lucky and sell it if it explodes in price, but it's meant to be a physical investment for when the dollar his the fan. You can't contribute to an Ira unless you have earned income. I don't know their age but unless they are working that won't work. |
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Posted: 10/17/2014 12:41:40 AM EDT
[#30]
College fun
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Posted: 10/18/2014 1:04:28 PM EDT
[#31]
But maybe 1-2 ounces of gold. Stick the rest into a 529 college savings account.
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Posted: 10/18/2014 1:12:41 PM EDT
[#32]
Don't buy Gold. Metals are a hedge, not a primary investment. The returns on metal are tiny.
Go to USAA and open a 529 plan for each kid. Put it all in. Select your goals and risk...or just do a year number at which they intend to go to college or tech school. Money invested wisely in the market will double every 7 years or so... If they are already in college, do a Roth IRA and invest aggressively. |
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Posted: 10/19/2014 12:00:56 PM EDT
[#33]
Open up a Scottrade or Vanguard account.
Put money into mutual funds or ETFs. Give them 1K for fun money. At an average return of 8% over 8 years $20K can turn into $37K. That would be a nice college fund for them. 12% average return would be about $49K in 8 years. |
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Posted: 10/21/2014 1:36:19 PM EDT
[#34]
Quote HistoryQuoted:
Open a Roth IRA for each kid, max it out for this year, wait a couple months till next year, max that bitch out again. 10k left spend on stuff for college, car, school shit, guns, tools and/or buy gold/silver. With gold/silver it's not an investment. We all may get lucky and sell it if it explodes in price, but it's meant to be a physical investment for when the dollar his the fan. This is what I would say except that I think Roth contributions have to be from W-2 income. Do they have jobs? Grove |
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Posted: 10/21/2014 1:47:22 PM EDT
[#35]
Talk to a lawyer in your state. Money from a settlement or inheritance for a minor in some states may have to go into a trust account or into a Uniform Transfers to Minors Act account. They will know more that I, I'm just a paralegal in VA.
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Posted: 10/26/2014 12:06:01 PM EDT
[#36]
Quote HistoryQuoted:
Open a Roth IRA for each kid, max it out for this year, wait a couple months till next year, max that bitch out again. i don't think you understand how an IRA works, and moreover what factors determine eligibility and limits. ar-jedi |
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Posted: 10/26/2014 12:10:03 PM EDT
[#37]
I'd probably put it towards their college funds, school is getting expensive these days.
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Posted: 10/26/2014 12:12:20 PM EDT
[#38]
Quote HistoryQuoted:
Mini 5K -10K in Gold in 10 years this should be a 30% return minimum. lol. you guys and your crystal balls. e.g. http://www.ar15.com/forums/t_10_17/676681_The_best_way_to_buy_large_amounts_of_silver_gold_without_compromising_your_OPSEC.html&page=5#i11574395 ar-jedi |
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Posted: 11/4/2014 7:56:47 PM EDT
[#39]
Be aware that with the Dodd-Frank Act, savers are no longer savers but unsecured creditors at their banks.
Also be aware that most brokerage agreements allow the brokerage firms to re-hypothecate dedicated client funds. Look up MF Global and PFG Best. No one went to prison for their thefts. |
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