Over the past 13 and a half months we have a couple events for my son that resulted in cash gifts, specifically, we had his actual birth, Christening and his First Birthday.  At each of those events we received very generous gifts from his aunts, uncles, grandparents, friends and pseudo uncles and aunts.  Every time I went to do something with the money I came up against an internal struggle of, “What Should I do with Money my child has received for a gift?

What Should I do With My Child’s Money?

Until this post I have just moved those gifts into one of my ING sub-accounts titled “Son’s Money”, but at today’s interest rates it almost seems like I am doing him a disservice.   That sentiment struggles with, what type of risk should I take considering it is not my money and his risk tolerance can’t possibly be known yet.

So I have an idea of what I should do but would love to hear from everyone else:

  • Leave it all in cash as it isn’t mine and I shouldn’t touch it
  • Put it all in an index fund tracking the broad market as this is money he isn’t using for 20 or so years
  • Put it in a low cost dividend/fixed income fund so it would be low risk but more than just bonds or cash account
  • Put it all in bonds

Please let me know what you think