Investing in children may be a wise strategy to help them manage their money from a young age.  Start their 529 savings, UGMA, and more now to give them a good start on their financial path.

It may seem more difficult toeducate children to ride a bike than to dive into stocks, but there will inevitably be some bumps on the road!
However, with the finest investments for kids, it can be very satisfying to get your youngster started on their investing adventure, much like those first pedal pushes.
Saving money for the future isn't the only goal; it's also about igniting an early interest in how money may grow and investing time to give them a significant financial boost.
And who knows?  In your home, you may be raising the next great financial expert.
Let's now discuss how you may build wealth and invest for your children's futures before they even understand what money is!

Important Takeaways
Your children may now benefit from long-term growth from a variety of investment possibilities when you invest money for them.
Establishing custodial brokerage accounts for your children, such as UGMA/UTMA accounts or the 529 Savings Plan, sets the foundation for a sound financial future.
Steer clear of the dangerous world of penny stocks and cryptocurrency and add some diversity to their investing portfolio by combining mutual funds, index funds, ETFs, and other options.
Start making investing exciting for the kids by choosing stocks from well-known and entertaining companies like Nike, Mattel, Disney, Netflix, and Nintendo. This will make learning an exciting experience.
Well-liked Stocks for Children
Let's now discuss how to make investing enjoyable and approachable for children.
Investing in well-known brands that people are familiar with and like is one method to do this.
You may use Robinhood and other accounts to invest in stocks offered by several companies. The following stocks may be of interest to your children:
Enthusiastic gamers of all ages like this brand, which makes it a compelling investment prospect.
Purchasing Nintendo stock on behalf of a Nintendo-loving child might be a considerate and significant decision for a parent or grandparent hoping to offer them a meaningful present.

Mattel
Some of the most recognizable toys in history were created by Mattel!
Hot Wheels, Barbie, and a host of other toys likely brought happiness and perhaps even a little mayhem to your early years if you ever stepped on one barefoot.
Mattel is a potentially cool investment option.
Saying anything along the lines of "Hey, you love playing with Barbie, right?"  Guess what, though?  We have a little stake in the business that produces her! "
Disney
Walt Disney and Mickey monument in front of Disney World's Cinderella Castle
Disney is the ideal spot to educate your children how to invest.  Who doesn't like Disney, after all?  It resembles the perfect paradise for kids.
You choose to add some Disney magic to your child's investment portfolio and open a custodial account in their name.
Along with giving them a piece of the world's happiest place, you're also imparting important knowledge about investing and saving.
Netflix
You can binge-watch as much of your favorite TV series and films as you want with Netflix, that fantastic streaming service.
Why is Netflix a great investment for young children?  With a wealth of television series and films suitable for both children and adults, it's like the ultimate source of entertainment.
Additionally, they consistently produce exciting new content, such as captivating dramas and animated adventures.

Nike
In your child's custody account, purchasing Nikemay be like scoring a goal.
Does your child have a strong interest in sports?  They have that competitive mentality whether they're kicking a soccer ball or dribbling a basketball.
It's similar to playing for the team, except you're earning possible returns on investment rather than goals.
Children's Investment Accounts
Do you believe that the stock market is just for "adults"?
Guess what, though?  Kids can totally get in on the action, too, and it’s never too early to start setting aside money for their livelihood.
Think what would happen if you put $1,000 into some stocks for your little one right when they’re born.  Fast forward to their golden years, and bam!  They’ve got funds for college and more!
That tiny investment could balloon into a whopping big number, kind of like planting a teeny seed and watching it shoot up into a giant tree.
I’m talking about setting up an investment account that’s just their size- yep, a brokerage account or a custodial account where they can start building their fortune, bit by bit.
So, let’s go into all the alternatives you have to put your kids up for financial success:
529 Savings Plan
Beautiful young girl depositing penny in a piggy bank with her family in backdrop
The529 Savings Plan is a particular sort of investing account that’s all about saving up cash for your kiddo’s school days down the road.
The truly amazing thing is that you’re in the driver’s seat.  You can modify things, alter around who’s going to profit from this pot of wealth, and truly make it work for your family’s requirements.
And you know what?  It comes with several great tax incentives that make it even more amazing.
Pretty much anyone can add money to it, making it a team effort to fund your child’s education.
You get to pick from a bunch of different baskets of goodies, like a low-cost index fund or ETFs, to make sure this treasure chest gets bigger and better over time.
You can open a 529 by using an online investor such as Betterment or Upromise:
Bettermentis a robo-advisor that rebalances the portfolio and offers tax benefits, making it an excellent choice for hands-off investing. For more information, see my Betterment Review!
One unique service offered by Upromise is the ability to link your cards, round up your purchases, and invest the difference.

Accounts for UGMA Custodial Brokerage
UGMA Custodial Brokerage Accounts combine the usefulness of a financial planning tool with an elegant approach to introduce a kid to investing.
You're opening a brokerage account so that children may learn about mutual funds, stocks, and other things while being closely supervised by a guardian until they're old enough to handle things themselves.
Using M1 Finance's pre-made investment pies, you may start a UGMA (plus a UTMA below!) and discover some reliable, long-term investments that can help your child's money grow.
These investment accounts are attractive from a tax perspective.  With fewer tax spikes, contributions up to $18,000 may be made in 2025, enabling more efficient growth of the savings.
Because this investment account is in the minor's name, it may influence the financial aid calculations when it comes time to apply to colleges.
Custodial Brokerage Accounts for UTMA
A young couple using a financial advisor to invest
When you think about it,UTMA Custodial Brokerage Accounts are very awesome.  They’re not just about dipping your toes into stocks, bonds, or mutual funds.
Nope, they open the doors to investing in tangible stuff, too, like real estate, collectibles, or even art.
It’s like giving kids a real-world tour of investment possibilities beyond the usual and putting more eggs into other potentially profitable baskets.
Learning about market ups and downs is one thing, but learning the real value and growth potential of tangible assets?  That’s next-level education for any young investor.
By the time they’re prepared to take over their UTMA account, these young persons are going to be all set to sail their own path in the huge ocean of wealth-building.
Custodial Roth IRA
Setting up a Custodial Roth IRA for the young ones in your life may blossom into a full-blown money tree by the time they’re thinking about retirement.
With a Custodial Roth IRA, an adult- such a parent or guardian- may start investing in stocks, bonds, or other long-term assets on behalf of their kid.
All of the account's growth—I'm referring to dividends, interest, capital gains—occurs tax-free.
Every year, there are donation limits.  In 2024, the annual contribution cap is $7,000, or $8,000 if you are 50 years of age or older.
Additionally, your kid may withdraw funds for other eligible needs or when it's time for them to retire without having to pay any taxes on their earnings.
Empower can be used to create a Custodial IRA. We had previously registered for the app to manage our finances and create a budget, but it has now allowed us to invest for our children!
The Best Software for Personal Finances

Traditional Custodial IRA
How to Save Money Quickly A young person wearing business attire, carrying a large amount of cash in bags
Giving children a head start on saving for their golden years is the main goal of the Custodial Traditional IRA, but with a twist.
Although a traditional IRA follows different tax regulations, it is fairly comparable to aRoth IRA.
With this account, the money saved can grow without the tax collector having to touch it until it's time to withdraw it.  Taxes then become relevant.
Establishing one entails establishing a solid foundation at a financial institution that may eventually enable their funds to grow significantly.
Additionally, you work on getting them an investment growth journey and teach them about it as they get older because you are the adult in charge until they are 18 (or 25 in some states).
Various Investment Choices
Learning how to open a brokerage account or a youth account is crucial if you intend to open a custodial account for children with the stock market.
Purchasing stocks for children and building a diversified investment portfolio through mutual funds and index funds encourages children to invest in a variety of investment accounts.
ETFs
Your youngster may experience the whole stock market at once with Exchange Traded Funds (ETFs).
Consider investing in a large basket that contains a variety of stocks or assets.
This is an effective approach to begin teaching your kid about investment management since it allows them to own a portion of all those businesses or bonds with a single investment made via a custodial account.
There are several advantages to investing in ETFs.  They’re known for:
Diversification: Because ETFs hold many different assets, they spread out risk more than investing in a single stock might.
Safety: While all investments have risks, spreading them across various stocks or bonds in an ETF can offer a safer route compared to putting all your in just investing in individual stocks.
Practicality: ETFs are easy to buy an Exchange Traded Fund and also sell them, much like stocks on the stock market, making them a straightforward option for getting your child interested in investing.
Comprehensive coverage of the market: You can cover whole sectors or the entire market in one investment, giving a broad exposure that would be hard to achieve otherwise.
Cost-effectiveness: Generally, ETFs come with lower fees than buying many individual stocks, making them a cost-effective choice for investment choices.
You can invest in ETFs using a platform like Robinhood– where it’s commission-free investing!

Index funds
investing baskets portfolio
Index Funds are a smart pick for getting a big piece of the market pie with just one investment.
For parents or guardians eyeing investment choices, index funds offer a low-hassle way to help kids’ savings grow over time.
By mirroring a specific market index, these funds offer a straightforward route to broad market exposure and diversification.
What’s nice about index funds is how they manage to keep prices down.
They’re recognized for having minimal management costs since they’re passively managed- no need for a staff of analysts choosing companies, which also means less expenditures passed on to investors.
They’re a fantastic match for custodial accounts, where you’re hoping to develop a foundation for future financial awareness without the steep learning curve or the expensive fees that may cut into progress.
Mutual Funds
Mutual funds in a custodial account are a terrific method to introduce youngsters into investing.
They’re like a giant pot where everyone pours in their money to invest collectively.  This fund is then utilized to acquire a lot of various assets, like stocks or bonds.
They stretch out the investment to decrease the risk and are managed by specialists, making them a smart alternative for helping youngsters increase their funds over time.
This way, with just one investment, you have a piece of a number of different areas, spreading out the risk.
When you create a custodial account for a youngster, it is set up by an adult for a juvenile, and it may store mutual fund investments until the kid is old enough to handle it themselves.
Plus, it’s managed by specialists who select and choose the best areas to put the money to work, so you don’t have to worry about the minutiae.
Large Dow Companies
When it comes to exposing youngsters to the financial market, choosing out large companies from the Dow Jones Industrial Average might be a wise decision.
Why?  For someone who is just starting out, investing in big, well-known organizations may provide both the opportunity for development and some stability, which is very wonderful.
These large corporations, such as the manufacturers of iPhones or the most well-known brands in software, healthcare, drinks, and payment processing, have been in business for a long time.
Here are a few instances of large Dow companies where you may purchase stocks:

Apple Inc.
   ●  Microsoft Corporation
   ●  Johnson and Johnson
   ●  TheCoca-ColaCompany
   ●  Visa Inc. 
Penny stocks should be avoided, particularly by novice investors.  These stocks carry a lot of risk since they are usually extremely cheap and may be quite volatile.
They may seem appealing due to their cheap price points, but their value is subject to abrupt and erratic fluctuations.
Additionally, because of their low trading volumes, penny stocks are vulnerable to market manipulation, which reduces their dependability and increases their vulnerability to abrupt price fluctuations.
Steer clear of cryptocurrency
Despite their popularity, cryptocurrencies may not be the best way for children to ensure that their investment portfolios provide a consistent income—stable being the key!
They are a dangerous option because of their very erratic historical performance and unpredictable market worth.
Young investors may find it difficult to negotiate the rapid market swings, which may result in possible losses as soon as profits.
It is often advised that novice investors choose more dependable and intelligible investment possibilities, such as those I mentioned above.

FAQs
What investments may I make for my child?
How to handle Money: As a couple starts to handle their finances more effectively and quit living paycheck to paycheck, they budget their money at the table.
There are many alternatives available to you when it comes to saving for your child's future.  Custodial accounts, such as IRAs or even a 529 Savings Plan, are options to think about.
To choose which of these accounts best suits your child's requirements, it's worthwhile to take the time to investigate each one since each has unique features and advantages.
When making investments for your child's future, it's critical to consider the long term.
Think about long-term investments that have the potential to increase in value over time by using compound interest.
Explaining to your children how investments operate and the value of saving for the future is a terrific method to educate them about money and stock market investing.
Can my kid purchase stocks?
Yes, parents may use custodial accounts or other investment accounts intended for young investors to purchase stocks for their kids.
Until the kid reaches majority age, parents may use these accounts to oversee stock purchases and other assets.
What ought I to put money into?
Your financial objectives and risk tolerance will determine what you should invest in for your children.
Below is a summary of some choices to think about:

ETFs
Index funds
Mutual Funds
Specific Stocks (Disney, Nintendo, etc.)
You may create a well-rounded portfolio with consistent growth over time by spreading your children's assets throughout these categories.
Additionally, it's always a good idea to speak with financial consultants or brokerage services that may provide investing advice suited to your objectives and requirements.
Additionally, investing has never been simpler thanks to internet brokers, and features like fractional shares let you purchase exchange-traded funds with smaller sums of money.
Which equities are suitable for children to invest in?
Finding a balance between stability and future growth is crucial when you first start investing and selecting stocks for children.
Well-known, reliable businesses like Disney, Apple, and Nike shares, as well as diversified index funds and exchange-traded funds (ETFs), are good investments for children.
Purchasing stocks that pique your child's interest may also add enjoyment and knowledge to the investing process.
Which stocks are the greatest for children to purchase?
best investments for children: a happy youngster sitting at a table with a lot of cash, isolated on white, wearing a black hat and tie.
It's crucial to take into account aspects like the company's capacity for innovation, revenue growth history, and historical performance when purchasing stocks for children.
Additionally, it has never been simpler to buy in companies like Disney, Nike, and Mattel thanks to the growth of online brokers.
Just keep in mind that before making any selections, you should do your homework and take your child's hobbies and investing objectives into account.
What is the appropriate investment amount?
Your unique financial objectives and situation will ultimately determine how much money you should invest.
There is no one-size-fits-all solution, whether your goal is to educate your children about investing, save for their education, or create a nest egg for the future.
The power of compound interest allows even a little investment to grow dramatically over time.  Therefore, if you are only able to make little investments at a time, don't give up.
Every dollar matters, and in the long term, getting started early may have a significant impact.
How can I invest a thousand dollars for my child?
Making a $1,000 investment for your child's future is a great idea, and there are a few ways to maximize that investment.
Opening a custodial account with a free brokerage platform is one option.
You may invest your $1,000 in these accounts without worrying about extra expenses reducing your investment returns since they usually don't charge account or membership fees.
A 529 plan, which is intended especially to assist families in saving for educational costs, is an additional choice to think about.
What is my earning potential?
Returns on investments may vary depending on a number of factors, including the performance of stocks or other assets you choose, the amount you invest, and the length of time you remain engaged.
Any account or subscription costs related to your investments should be taken into consideration since they may affect your total returns.
You may retain a larger portion of your investment profits by reducing fees and expenditures.
Investing regularly and starting early can help you reach your financial security and personal finance goals by maximizing your potential for growth over time.