Chap 5 Make Grandchildren Rich

Chap 5 Make Grandchildren Rich - You can make your...

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You can make your grandchild rich Monetary gifts now can grow into millions over the years 08:30 AM CDT on Tuesday, September 14, 2004 By SCOTT BURNS / The Dallas Morning News Want someone in your family to be rich? You can make it happen with a mixture of affection, forethought and relatively small sums of money. The mixture can be turned into millions of dollars if that "someone" in your family is a grandchild. The magic ingredients, of course, are compound growth and time. Suppose, for instance, you have a newborn grandchild. You're not so well off that you can make that child wealthy today. But you'd like to do something to assure financial security in a distant tomorrow. It can be done. Give $11,000 a year (the annual gift exclusion) for five years. Let it grow while invested in a low-cost equity index fund. Your grandchild will have over $5 million at age 56 and nearly $16 million by age 69. Spoilsports will be quick to point out that $5 million 56 years from now might not be enough to cover a major Starbucks habit. We keep losing purchasing power to
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