As an adult, we know all about the things that would have made our lives easier when we set out on our own. Thanks to the vast number of resources available, you have access to putting together the baby gifts that'll increase in value over time that your parents or grandparents might not have known existed. Give the kiddos in your life a gift that'll keep on giving with these great options.
Financial Baby Gifts That Accrue Money
For generations, people have been passing down things like bonds and CDs as financial measures of securing their children's future. Yet, the financial market isn't the same as your grandparents was, and the way to gift money that'll keep accruing over time looks a bit different.
If you want to grow your cold hard cash for them to have a nest egg to use for future expenses like education, career, and home ownership, here are some of the most popular investment avenues today.
Certificate of Deposit
People have been using certificate of deposits (CD) for decades to pass money onto their children. With a CD, you put an allotted amount of money into a savings account for a fixed period of time and over that time, the bank adds interest to your fund. This isn't like your typical savings account where you can move money in and out. Rather, the money has to stay put for the full term or there's a penalty and potentially you'll lose all the interest.
These are great because they're not as risky as investing large sums of money, though there is a smaller amount of interest gained because of these safer practices.
529 Education Plans
If you hear that someone's creating a 529 plan, it's a fancy way of saying they're building a college fund. Although these are exclusive to U.S. residents, they're one of the easiest pathways to building finances for a future education.
In 529 plans, any adult can create one for another person, and the person who opened the plan will have the ability to control investment options and potential withdrawals. Additionally, anyone can contribute to the plan whenever they like.
The major difference between a 529 plan and a custodial brokerage account is that the person who opens the account has full control over the money until after it's been withdrawn.
For many people today, the term 'bond' calls up images of World War II advertisements asking people to buy bonds to support the war effort. They're not a thing of the past, though, and can be used to build money for a new baby in your life.
Essentially, with a savings bond, you give money to the U.S. government, who then agrees to pay you back what you gave them plus interest. Because they're backed by the U.S. government and not at the stock market's mercy, they're a safer way to build money over time. Currently, there are two different types of bonds (EE and I bond), each with their own requirements and benefits.
Custodial Brokerage Accounts
In simple terms, a custodial brokerage account is a fund of money that any interested parties can add to that belongs to a minor but is being traded and invested by an adult 21+. With an adult managing investments, there's an opportunity for the base amount to continue growing as the child ages, and children have the chance to learn about investing in a lower stakes environment.
Similarly, anyone can contribute to the fund at any time, meaning money can be set aside for birthdays, holidays, and special occasions to continue bolstering the fund's growth potential. There are many different institutions that you can open a brokerage account through, such as Fidelity.
Unique Baby Gifts Whose Value Grows Over Time
If you're not a numbers whizz and don't want to throw cold hard cash a new baby's way, then there are other gifts you can give that'll increase in value over their lifetime. Unlike financial investments and accounts, these do require large sums upfront and/or physical labor to keep their value.
Classic cars have a reputation for being one of the most valuable collectibles, and expensive ones to upkeep. Yet, if you love the auto world or have an older car, you might want to think about purchasing one to give your kids once they come of age.
Fundamentally, jewelry is as valuable as the precious and semi-precious materials that it's made of. This value's compounded by age and style. Antique jewelry can be worth quite a lot, especially if it's full of valuable gemstones.
You might have some family jewelry you'd like to pass on to your kids, or you can invest in buying luxury jewelry from places like Cartier and Tiffany and Co. Either way, your kids will be able to hold on to these pieces and watch their value increase as they age.
Steiff Bears have been around since 1902, and they're one of the most valuable antique teddy bears in the world. While the most expensive Stieff Bears have sold for hundreds of thousands of dollars, you can buy ones from their current inventory for about $50. Yet, their luxury bears (~$300) are the baby toys that have the best chance of accumulating value. So long as your baby keeps their bears for a few decades, chances are they'll find a collector to buy it in order to not only recoup their money but make a little chunk of change on the side.
Charlotte Clark's Mickey Mouse Plushies
If you're expecting a fan of the Mouse, try to hunt down one of the original Charlotte Clark Mickey Mouse stuffed animals to gift the newborn. These stuffed toys were first made in the 1930s and they're worth a few hundred dollars. Yet, as move farther and farther away from the 1930s, these delicate dolls are only going to be harder to find and more expensive because of it. So, get your baby one now and they should be worth much more in the future.
Granted, buying your kids property when they're born is a luxury most people can't afford, but if you're in the position, it's a viable option. Flipping a cheap property will give your kids the stability in their early adulthood to figure out their future without worrying too much about where they're going to live and how they're going to afford it. Or, if they'd rather use that money for something else, they can sell the property and take the profits.
Give Them a Gift That Keeps on Giving
For some, onesies and bottles don't feel like they measure up to the level of gifts they want to provide for the new children in their life. Yet, most people don't know that there are other gift options out there that you can get, which will increase in value over time. Think back to the things you wish you would have had when you hit adulthood and see if there's a way for you to gift that to kids in your life.