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So my kids (3 and 7) are getting some reasonable amounts of cash built up in their savings accounts. Not huge money, but I'm a total chode and haven't bought them any toys with a single cent that anyone has given them for baptism, birthday, Christmas, whatever.
So it's currently in a savings account earning dickall. I'm fairly strong in getting it into some kind of investment account, question is to what?
I know the trendy thing to do is a 529 plan, but there is a real discussion to be had about the future of college and my kids opportunities there. Unless something changes, probably structurally, I think there are very real chances my kids won't go. As a guy with a graduate degree, I hope they do, but it isn't in their best interest to go blow 100K on something they're not going to get a return on. Nonetheless, some flexibility might be a little better.
A standard investment account might be prudent, and probably what's going to happen, but if they indeed use it for college, paying, you know...TAX when they're in their second semester isn't appealing.
I tossed it to the wife that maybe we should start a Roth for the kids, even if they don't put any more in it until after college, they should have serious gains and a hell of a head start. She wasn't thrilled about the idea, thinking they couldn't get it out if they needed it. After 5 years they should be able to borrow the basis. Plus, I think there is some value in the fact there are barriers to exit. If my kids suck (hey, my sister exists), and I can't pass on anything, they'll still have something come retirement.
Anybody have any thoughts on this?
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