Investment Accounts for Minors

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Investment accounts can be set up in the name of a minor, although their guardian retains the rights to buy, sell or remove money from the account. Teach kids about investing by guiding them through the process with help from a portfolio manager in this free video on money management and personal finances.

Part of the Video Series: Investing & Money Management
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Video Transcript

Have you opened up an investment account for your child or grandchild? Hi, this is Roger Groh at Groh Asset Management. If you have, what you've done is to title an account in that child's name but retained the sole right to buy or sell or take money out. It protects the child a little bit because they probably don't have enough lot of experience in order to make solid investment decisions. What does it really mean though when you setup an investment account? Well if it's a trust, there may be some tax advantages where the tax rate of the trust is less than yours. There may be some gifting incentives for you at the state and federal levels if there's a trust involved. And from a financial planning point of view, sure does help when you start thinking about how to pay for college especially if you start early. Last but not least, what about training? Once the kid is old enough to know the names of the companies in the portfolio, not the size, but the names of them, maybe they can begin to relate a little bit. For instance, most kids have a bicycle, frequently they are spray painted, well do you know the name of the company that makes most of that spray paint? Try RPM. I'm Roger Groh with Groh Asset, thank you very much for spending time with me.


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