Quote:
Originally Posted by lukeh
You mean because it teaches kids how not to invest money? Putting money at .7%for 30 years is foolish. Deferring taxes until you're in a higher bracket is foolish. His mutual fund he can follow day to day on-line or in the paper. He will see and learn about the ups and downs of the market. That will teach him about economics and making sure his fund is a good one will teach him about responsibility. His bonds would have sat in a safety deposit box for 30 years so I don't see that teaching him much of anything...other than how to get a bad rate of return and pay more taxes.
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It gives you the chance to say, "Hey junior, if you put this away, someday it will be worth...."
It is a seguay to have a financial conversation with your child. IMO, it is a very good tool for that purpose, and while the investment is not first rate, it will never depreciate (which in and of itself is a very worthwhile reason to look into bonds IMO), and it does earn some modicum of interest.