How to buy 10 years of retirement for $3,650:
Some of the most popular articles I’ve written are about very-long-term investments for young investors, and today I offer you a new approach that’s relatively inexpensive and doesn’t require much work.Your cost as a parent or grandparent: $1 per day for as long as you wish to contribute. I’ll focus on 10 years, because that will let you create what I think is the very best long-term portfolio.
Since 1970, the combination of these 10 asset classes added about 1.9 percentage points annually to the return of the S&P 500. The day your grandbaby is born, open a brokerage account in your name, or in the child’s name with you as custodian, and deposit $365. Invest this money in a mutual fund that owns small-cap value stocks.
On her first birthday, invest another $365 either in the same brokerage account or in a separate one, whichever is more convenient for you.U.S. large-cap blend , U.S. large-cap value, U.S. small-cap blend, U.S. REITs, international large-cap blend, international large-cap value, international small-cap blend, international small-cap value, and emerging markets stocks.
When your granddaughter is old enough to understand what you have done, you’ll have a terrific teaching opportunity to acquaint her with whatever you want her to know about investing.
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