Help with kids' investments please!

[MomofFour]

I am thinking about letting our kids have the money we will be getting for them from the stimulus. I would like to invest the money in either a mutual fund or individual stock and let it grow for their future. Does anyone have any suggestions on where is a good choice, especially considering it's only $300?
By the way, we already have a 529, I'm looking for something outside of that.

[Broken Arrow]

Again, I'm going to have to advise against individual stocks. Unless you really want that, and depends on what you specifically have in mind.

However, if the children don't have a Roth IRA yet, I would look into that first, and stick with ETFs and mutual funds instead....

[noppenbd]

However, if the children don't have a Roth IRA yet, I would look into that first, and stick with ETFs and mutual funds instead....

I think you can only do the Roth route if the children have earned income this year exceeding the amount of the contribution.

I agree with the ETFs/mutual funds in a regular taxable brokerage account. As for which ones, it depends on the timeline for using the money. If further than 10 years out (first car purchase?) I would suggest

VTI (total stock index ETF) $150
VB (small cap value index ETF) $75
VEA (europe/pacific index ETF) $75

Less than that requires more diversification and less risk.

When dealing with this small amt of money, be careful about trading costs, so open with a low cost brokerage.

[disneysteve]

noppenbd is correct. You can only contribute to a Roth if you have earned income.

I'm curious about investing for kids, too. My daughter will have her Bat Mitzvah in September and gifts will probably total a few thousand dollars. We're trying to figure out what to do with that money.

[aida2003]

A few years ago I thought I'd invest for my kids then I changed my mind. I'll have no control over the money after they reach the majority age (is it a correct term? ) and then tax preparation issues.....

[disneysteve]

A few years ago I thought I'd invest for my kids then I changed my mind. I'll have no control over the money after they reach the majority age (is it a correct term? ) and then tax preparation issues.....

True. In our case, though, it will actually be her money being invested.

And age of majority is a proper term.

[jIM_Ohio]

I would make it a contest- see which one has more money after X time, then tell them they get to choose the investment for the other $300. I would keep this money in adults name in one brokerage account like scottrade or sharebuilder.

$300 is less than the minimum for most mutual funds.
Look at ETFs or stocks.

For stocks I would look at MSFT, GE, PG and maybe a few other blue chips. Stick with stocks in the Dow for starters to teach the kids- about the company, their products and how they make money.