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Give them a head start!

How much money will he have when he retires at age 65?

An investment of $25 a month, in just one company ($300/yr) when a child is just 3 years old can grow to nearly $1.5 million over the 62 years until he reaches retirement age. Our calculations are based on an average return of 10% over the period.

 

How did we arrive at a 10% growth rate?

Ibbotson Associates, a well-respected Chicago-based research firm has calculated the long-term return of equity investments since 1926 to be about 10%, with dividend income included.

You may think that the companies you pick or the market in general will produce higher or lower results going forward. Use the DRIP Growth Calculator (located below) to calculate the return on your regular investments based on your own assumptions about the company or the market.

 

DRIP GROWTH CALCULATOR

The calculation below anticipates repeated investments to build holdings over time (rather than the growth of a lump-sum investment).

 

OPEN A DRIP ACCOUNT FOR YOUR CHILD

Buy a single share of stock to open the direct investment plan account. Then fund it regularly. When your child is old enough he or she can make the investments.

Click here for our top recommended stocks for kids.