This year I have decided to give my nieces and nephews cash to invest in growth and dividend ETFs. I will be granting them $500 with the intent that they open a brokerage account, deposit the money and buy shares that I recommend to them.
Of course, it’s their money and they can spend it however they want but it’s become clear to me that young people are going to have an endless struggle for the next decade. The invention of AI is wiping out many jobs and that problem will only grow.
Wages have not kept pace either and with new AI automation, it’s highly dubious if that will be corrected as well. There may be other opportunities that open up but the struggle will continue for them at least for a while.
Honestly, this past Thanksgiving with the family was a bit depressing, it seems all the young people in the room were struggling. Their parents are doing ok and many are nearing retirement but it’s a big question as to how much those parents are going to be able to help their kids.
A gift of $500 isn’t earth shattering but if they invest the money in an ETF that can return 10% over 30 years it will grow to $8,725 assuming they don’t add additional shares. If they can add $500 worth of shares each year on top of that it will grow to $91,000.
My own kids have had brokerage accounts for a while and I will be adding funds to their accounts as well with the same instructions. Fortunately, they will hopefully inherit nice sums of money down the line so I’m not too concerned about them at the moment.
Share The Wealth
Are you giving your friends and family a fish or teaching them to fish this Christmas? Let me know in the comments below.