All Life Insurance Tips - if anyone knows about investing money, could you tell me what would be good for me?

if anyone knows about investing money, could you tell me what would be good for me?

I have a 2 yr old & a 9 yr old and I'm pretty strapped for cash but I would like to put a little bit of money aside for them for when they're older. I have heard of the Gerber Grow Up Plan whole life insurance plan and that looked pretty good to me but I really have no idea about any other options I have.

Public Comments

It sounds like you already have a plan. In addition, you could consider a Custodian account, it is often called Uniform Gift to Minors Act (UGMA) or you could just look at putting aside a little money in a coverdale education plan
Bonds are a safer bet for long term. ANd May be you can invest in hig dividend paying stocks like MSFT. Note; This applies if you are thinking of investing for ur children, with a window of 15 yrs.
I'm not a fan of insurance for young children. Part of your money pays for insurance that you very likely will never need, and if you do will not begin to compensate. Instead, I'd suggest a positive investment plan. Think about mutual funds to start with...these can be held through a Custodial account. As your investments grow, you could consider individual stocks in the future, but perhaps the portfolio won't be large enough before they reach college age. Alternately, you might consider a 529 plan to save for their college education. Check the link below. Best of luck to you.
I agree, you don't need life insurance on your children, you might consider insurance for accidents where they don't die, and you need to look after them for the rest of your/their life. However, I gather you want to invest, and not insure. The best thing you can do is to invest in your financial education. And I don't mean a college education, but a street smart education like that in the Rich Dad Poor Dad series of books. Then set up a detailed plan of what your investments must achieve - school/ tertiary education for the kids, a big holiday for the family, a safe secure retirement for you? Or any combination of the aforementioned. DO IT IN WRITING!! And then work out a plan to get to that. Anybody CAN do it, very few people WILL do it unfortunately.
First of all let me congratulate you for being an excellent mother. In fact, if more women were like your we won't have crime in the United States of America. First, let me tell you how millionaires do it. They open an account for their babies as soon as they are born (It's called a Trust) and they keep saving money in that account and that money is invested by Portfolio Managers (Very Expensive) and by the time the baby is 18 years they don't have to work anymore because they already have millions of dollars in their accounts. The best thing you can do is send your to Babies to Harvard. You will need at least $500,000.00 for both babies to send them to Harvard. If you don't raise enough money (Which is almost impossible if you let me help you) you can always apply for a loan or a scholarship. You could open a 529 These accounts are for College Education setup by your State or by Colleges. Some States offer prepaid plans but I don't recommend those plans unless you live in MA. Some States offer savings plans but I don't recommend those unles you can use the money send them to Harvard. Why send them to a Local School when you can send them to the best School on the Planet? Currently there is a 529 Plan called Independent 529 but I am sure in the future more plans will appear. This plan supports many prestigious schools like MIT, George Washignton, Loyola, Princeton and hundreds more. Harvard is not supported so I suggest you not to use that plan for now. More Schools are joining every year. Contact your State for more information about the 529 in your State and contact Independent for more information about their plans too. The 529 plans have some advantages but considering your children are still very young you have other options. I suggest you to open a brokerage account for both of them. You can open a brokerage account at Scottrade in less than 15 minutes with just $500.00 Once your account is setup you can arrange for automatic deposits taken from your bank account every paycheck or you can make the deposits every paycheck yourself. Setup a budget and decide an amount to save for them every paycheck. You don't need to deposit too much money but you need to deposit every paycheck. With the help of a Financial Advisor that money will grow over the years to hopefully $500,000.00 which will be more than enough to send them both to College. Asuming you make $5.15 per hour and asuming you deposit at least $50 per week and asuming you make a return on your investment of 25% per year you will have over $100,000.00 by the time your oldest children goes to College. Not enough to pay for their entire education but still a good amount of money. You could take half the money and apply for a loan for the rest. Your second baby will have a lot more money because he will have more time to invest the money. I don't know how much money do you make, perhaps $50 per week is too litle. If you can afford to save more each week then you could make enough to pay for their entire College Education. Either way, it's a lot better than apply for a loan for the entire amount. If you need more detailed information you can drop me a line. If your grandparents are still alive and they don't have life insurance it would be wise to buy them life insurance and place your both babies with 25% each of the money. If you have brothers and sisters with children perhaps they could help with the payments of the policy too and include their children as well and increase the money too. I don't know how old they are but asume they are going to live 85 (If they don't smoke) or 75 (If they smoke) perhaps they will still be alive by the time your first children is in college but maybe not by the time your second children is in college. You do the math! Top 3 Answerer in Business & Finance. (Vote for me)
There's been some incredibly bad advice so far, so I will try to set the record straight and help you out. Bonds are not a better long term investment for someone who has young kids or for someone who IS a young kid. What bonds are, principally, is a safer, lower-yielding alternative to stocks. What they SHOULD be, is part of anyone's, at any age's diversfied portfolio. Secondly, in no universe is Microsoft a big-dividend stock. It has a yield of 1.56, which you might recognize as being less than your savings account. Considering the S&P AVERAGE dividend is 1.8, that makes Microsoft a BELOW-average dividend stock. Bad avice there as well. UGMAs and UTMAa are fine if you're okay with your kids buying a motorcycle or whatever else they want when they turn 18 (or 21, depending on your state). They are in irrevocable gift to the minor, and they can spend it as they see fit. Some parents would rather keep some control over it, and put it towards college. A 529 plan would be the best way to do this. In addition to a wide variety of fund choices, if used towards post-secondary education, any and all proceeds are federally tax free, and in some cases, state tax free as well. But how to invest? What to buy? You can start for as little as $100 a month at most firms, investing systematically, month after month, which is the smartest way to do it by the way, whether you have $100 or $100,000. Actually, I know at Edward Jones you can start with mutual funds for as little as $25 a month, and that counts for 529 plans as well. What to invest in? I'd suggest buying a diversified series of mutual funds. If you want to keep it simple, most 529s have age-based allocation funds that get more and more conservative as your child gets older. If you want to get a little more actively involved, then make sure you hit all the asset classes, like Large cap stocks, small/mid cap stocks, international stocks, emerging markets stocks, government debt, corporate debt, hi-yield debt, foreign debt, emerging markets debt, real estate, commodities, and precious metals. That's 12 categories right there, and there are good mutual funds that allow you to invest in all of those. Again, an asset-allocation portfolio could be a simpler way of accomplishing the same thing. Then sit back and rebalance each year, back to your original percentages. This is called asset allocation. The thinking being, what's BEEN hot is more than likely not going to STAY hot. No one can predict what's goigto be big next, no matter how much they say they can. Cause if they could, they wouldn't be saying, they'd just be doing it. This sort of portfolio should average 8-12% per year, so just split the difference and say 10%. Will it do 10% EVERY year? Of course not. I'd be surprised if it ever did EXACTLY 10%. That's an annual average. With that average, your money should double roughly every 7 years. So, if you start with $1000 and never add to it ever again, in 7 years you should have about $2,000 in 14 years you should have about $4,000 in 21 years you should have about $8,000 in 28 years you should have about $16,000 in 35 years you should have about $32,000 in 42 years you should have about $64,000 in 49 years you should have about $128,000 in 56 years you should have about $256,000 in 63 years you should have about $512,000 in 70 years you should have about $1,024,000! A long time to wait to become a millionaire, impressive as that compounding is! Of course, if you keep adding money in systematically like I suggested earlier, say $100 a month, you'll become a millionaire MUCH sooner. The key is discipline, and sticking in when markets are up OR down. Don't try to time the market--you'll NEVER get it right. Here's a handy formula: $100/month x 12% return x 20 years = $100,000. So if you want $500,000 20 years from now, just save $500 every month, and go with that diversifed portfolio. If you only average 10%, you'll only end up with $450,000, not bad either way! Oh, and if you do this all in a 529 and use it for college or technical school or some other post-high school education? Then every penny will be 100% TAX-FREE. That's a deal that's too good to pass up. Same goes for a Roth IRA, if you qualify, and it sounds like you might. That's why I tell all my under-30 clients--if you make under $90,000, and therefore qualify to do a Roth, you'd be a fool not to. Just having the power of youth (and therefore time) on your side is such an advantage, to squander it would be such a waste! A Roth is also a great back-door college savings vehicle for a couple of reasons. One, any money you've put in can be taken out at any time with no taxes and no penalty. Two, if you've had it open for at least 5 years, then you can take money out for college without paying the under 59 and a half penalty. College is one of the famous "7 exemptions". You'd still pay the regular tax of course. The other benefit being that a parent's IRA is not included for financial aid purpsoes to the same extent that a 529 is, and certainly not to the extent that an UGMA or UTMA is. A nice way to have your cake and eat it too! If you need any further info, just contact me. Hope this helps! --J.
I would setup an IRA with one of the financial institutions (stay away from banks) and invest in a aggressive growth fund and a couple of Growth and Income funds. I invested in Legg Mason Partners (LMP) Aggressive Growth Fund, LMP Fundamental Value Fund, and LMP Appreciation Fund. Why? To lower my risks to the market. I would invest $100 to $200/month into the IRA (if you understand the concept of Dollar Cost Averaging, you would know why). After that, if you still have some money left over, I would start a college fund for the kids, using either a 529 Plan or the Coverdell Plan. Now about the Gerber life insurance. Those are the worst kind of life insurance for a child. A little fact about Whole Life insurance: 1) They are very expensive 2) Rate of return on cash value are very low (less than 3%) 3) If you would like to use the cash value, you will have to borrow it and pay the company interest (any loans due will decrease coverage amount). 4) If you die, you will only get the death benefit. Many life insurance agents own Term insurance. They do not own any other kind of life insurance like universal life, variable life, or whole life. Why Term? For the same amount of premium you pay for your life insurance, you can easily triple or quadruple your coverage amount with term. OR For the same amount of coverage you currently have, you can cut your premium amount by almost 50%. Anyway, if you need a financial game plan and need to put your finance in order, I would go to Primerica Financial Services. They provide free financial need analysis and have solutions to help increase your assets. For more info, go to http://www.primerica.com