How to Turn Baby Gifts into $25,000

Posted by M.S. on May 9, 2009

When our children were born and people wanted to get a gift for the baby, we asked everyone to give the baby the gift of money that we would invest for them.

We knew the immense power compound interest would have over time and wanted our offspring to take advantage of that fabulous wealth builder.  Most people honored our wishes!  We set up a stock index mutual fund along with a general stock mutual fund for each child and start investing.

When the children were old enough to start working, we wanted to really encourage their frugal living and investing, so we made them an offer they could not refuse!  We said for every dollar they contributed to their savings, we would match it–so they would double the amount of money they had to invest!

We set up a spreadsheet that we reviewed with them periodically to demonstrate how much richer they were getting.  They became much more enthusiastic about saving their hard earned money after they started to see how their investments were earning them “free money” they didn’t have to earn by working.

On the day our children graduated from college, we switched the entire portfolio into their name!  They EACH had a nest egg of over $25,000 to begin their adult lives at 22 years of age!

That’s a whole lot better than a bunch of smashed up old toys and NO money!

Wouldn’t that be a fabulous graduation present for your child too?