Best Way to Invest For Your Kids

I want to share with you my take on investing for my kids' future. Buckle up because we're steering away from the conventional 529 accounts, and I'll walk you through the two investment strategies I've embraced for my three children – aged 15, 12, and 8.

Let's address the elephant in the room – 529 accounts. Sure, they have perks, but the drawback that caught my attention is the rigid use of funds solely for education. Given the uncertainties about whether my kids will choose college, I felt the need for investment avenues offering more flexibility.

So, what's your alternative? A brokerage account through Morgan Stanley. I'm all about dollar-cost averaging, chipping in $150 per month for each kid. Monthly contributions compound over time, demonstrating the power of consistent investments. But it doesn't stop there.

My 15-year-old has a gig keeping score for the park and rec, earning a bit on the side. I'm teaching her the ropes of financial responsibility – a portion for tithe, a slice for investment, another for savings, and the rest for her personal use. She snaps a pic of her check, invests it in the Morgan Stanley brokerage account, and gets to witness her money growing. It's hands-on financial education in action.

Now, onto the second part of my strategy – an infinite banking concept or whole life insurance policy for each kid. I decided to pay my kids through our family business, turning their earnings into a tax-deductible expense. The money flows into an insurance policy with cash value, offering not just security but also flexibility.

This money also grows TAX Free, and I can teach her in the future how to borrow from the cash value and put that money to work in other areas as well. But, I can go into those details in another article. 

This unconventional move allows me to use the accumulated cash for various purposes – from real estate ventures to unforeseen opportunities. It's about making the most of the money beyond the confines of traditional educational expenses.

The Bottom Line?

I'm not just stashing money away; I'm investing with purpose. While I appreciate the benefits of 529 accounts, I crave the flexibility to use capital for a broader range of financial endeavors. My kids may or may not follow the traditional college path, and I want their funds to be adaptable to whatever future they choose.

So, there you have it – my two cents on steering clear of 529 accounts and opting for investment strategies that empower my kids for a future filled with opportunities.

If you're pondering how to navigate your kids' financial journey, consider flexibility and adaptability – because, in my book, those are the keys to true financial success.