CNBC's Jim Cramer explains the basics of saving money for your child as soon as you're pregnant. He recommends index funds and growth stocks with high quality.
Don't delay. He said that this must be done as soon as possible to give your new baby the maximum amount of time. No one has regretted saving too early for their children.
He believes that investors should begin saving for their children's future as soon as possible, whether they use index funds, individual shares or both.
Cramer recommends that parents create a Uniform Gifts To Minors Account (UGMA) for a newborn.
Cramer suggested that when a child was born, you should consider setting up an account for Uniform Gifts to Minors and adding index funds or stocks to it. Cramer said, "I like ETFs with low costs that mimic the S&P500. On the stock side, you should give your child at least one dividend-paying stock for income. A high yield could double the value by the time they turn ten."
Cramer noted that rules for these accounts vary by state and cautioned: UGMAs may affect the amount of financial aid a child receives if they decide to go to college. Cramer said that the rules governing these accounts vary from state to state. He also mentioned a caveat: UGMAs can affect how much financial aid is given to a child if they choose to attend college.
Cramer suggests that investors who choose to purchase individual stocks for their kids should buy high dividend stocks and growth stocks of high quality, which they believe will lead to large gains over the long term. Cramer also said that gold can be a "terrific investment insurance" for any portfolio.
Don't delay. He said that this must be done as soon as possible to give your new baby the maximum amount of time. "Nobody has ever regretted not saving early enough for their children."
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