Investing with your child: Starting with a Piggy Bank

Have you ever seen the excitement and joy on the face of young child dropping coins, clinking and clanking, to the bottom of a piggy bank? If you haven’t experienced this, then I highly recommend you start here. Many parents ask me where I started. I bought my daughter a colorful ceramic piggy bank with a removeable plug on the underside. I would hold the bank and ask her to feed the pig. She would place the coin in the slot on the back and I would oink and giggle as I animated the pig like it was kissing her. She would laugh hysterically and it became a game. Anytime we would find random change around the house she would want to feed her piggy. This is where we began in the basics of savings in the eyes of a 1 year old. Anytime she got a Birthday card with money in it, or a dollar from Grandma we would deposit it into her piggy bank.

Now here comes the challenging part, removing the change and taking it to the bank. We collected the change in a Ziploc baggie and headed to our local branch. We filled out a deposit slip attached to her savings account.We easily set her. You will need their full name and social security number. You will be the custodian of this account until they are 18 years old. As we handed over the baggie of change to the teller I can not explain the look of despair on my child’s face. This is where the full blown meltdown occurred. I learned my lesson to not take her to the bank with me the next time. How do you explain to your 2-year-old that the money is still hers and that the bank is going to hold it and take care of it for her?

That’s where the confusion for me as an adult comes in. I am going to hand over this money and you are going to pay my child and average of .193% (as of 2017). You are telling me that if I deposit $100.00 into this account and let it sit here for 5 years that she will have approximately $101.00 and once adjusted for inflation she may have a whopping $91.00 in spending power. Wow what a return -insert sarcasm here ! Unfortunately, this is about as far as many parents get with their children in regards to saving for their future, if they even get this far.

The next step is to decide how you want to manage this money. Should you let it sit in the savings account? Do you invest it in bonds, stocks, etc? The choices are overwhelming to many parents so they just let the little amount of cash sit idle in a savings account losing value.

My husband and I decided that we would take the money and invest most of it into Cryptocurrencies. At the time of purchase Litecoin was trading at approximately $42.00. In less than 6 months the value had increased almost 400%. If you plan to hold this money long term I recommend a Paper Wallet to hold your child’s money or a Hardware Wallet. For a guide on Wallets click here. Whether you choose to go the route we did or invest something more traditional, please just choose something other than the savings account.

Can you imagine your own surprise if your parents told you as an adult that they had invested in this so-called ‘Internet’ concept and that they had purchased 45 shares of Apple in 1987 for you and had completed forgotten to tell you about it! With stock splits and dividend reinvestment an initial investment of $990 would now be worth over $420,000! I can only dream that my parents did that for me, but at my age who am I kidding.

My dream for my children is that we will be able to pass on some wealth by taking a little chance today with a new concept that will reshape how our financial system functions. It is never too early to start teaching your children to save. It is as simple as a piggy bank to get them interested. They will thank you later!