Investing for the Next Generation: The Top Assets for Investing for Your Kids

Credit: jcomp via Freepik

Investing for your retirement can be tough. You want to make sure that you can live comfortably without having to work when you become a senior, and that means setting aside a healthy portion of your income and investing in assets that will grow exponentially over time, provide you with an investment income, and offer a sense of security.

Your savings goals may not end with your retirement, though. You may also be thinking about leaving something for your adult children. The assets that work for leaving an inheritance may not be the same as the ones you need to grow your own retirement fund.

When you’re trying to create wealth that you can pass on to future generations, these are some of the best assets for the job.

#1 Real Estate

Real estate has long been one of the primary ways that people pass along wealth to future generations. The value of land can change a lot over time. It doesn’t always appreciate, as real estate markets and land use changes can alter its value, but good real estate is usually a safe bet for passing along to future generations.

The main disadvantage of real estate is that it is not liquid, and your heirs would have to either rent it out or sell it in its entirety to turn that asset into cash.

#2 Bullion

Alongside land, precious metals have been used to pass along wealth for millennia. Gold has long been used as a store of wealth, and it fulfills that function even today. Many investors like gold bullion because it provides a sense of safety and security. It’s a long-term investment and one that has historically competed with inflation.

Investing in physical bullion that you can store at home or with allocated storage is one of the most cost-efficient and secure ways to invest. A bullion dealer like Global Bullion Suppliers can walk you through all the basics of investing in bullion and preparing it for an inheritance.

#3 Bonds

Security is often a top priority for investors who are thinking along generational terms. Bonds tend to be a low-risk asset. With a bond, you become the lender to a company or government, and the income generated by bonds is the interest that they pay. Bonds tend to be very stable, and you can choose the length of the term.

The downside is that bonds tend to have smaller returns than stocks, but they can keep your wealth safe for future generations.

#4 Cash

If you want your heirs to have zero risks, cash can fill that role. The issue with cash is the low returns of a savings account, and it can lose value due to the slow erosion of inflation. However, there may be tax reasons for leaving part of an inheritance in cash, and your children can use it immediately.

#5 GIC/CD

The name of this financial tool depends on where you live. In the U.S., it’s usually called a Certificate of Deposit or CD. In Canada, a very similar tool is called Guaranteed Investment Certificate or GIC.

These low-risk assets provide a guaranteed return. They’re typically sold by banks and credit unions which take on the risk of the investments they make with the certificate, while guaranteeing a return for you.

Returns tend to be modest, but long-term GICs/CDs can be a great way to create security until you’re ready to pass that money on.

*This is a collaborative post.