What is Custodial Account?

It is same as regular brokerage, but opened by parents when kids are minor. parent can deposit and invet money on kids behalf and can transfer the account after kids are adult. Also known as UGMA/UTMA account.

Why should you open Custodial Account?

Custodial account can be a powerful way to set them up for long-term financial success for children.

• Great way to directly transfer wealth

• Transferred to the minor at a certain age (between 18 and 25, depending on the state)

• Friends and family can contribute

Visualization Created for Lisa's daughter Amy: As soon as Amy was born, Lisa started a custodial account for her. She put $500 in to get things going, and then she decided to add $500 every year on Amy's birthday. i) Lisa only plan to invest from 1 to 18 years of age ii) Upon Amy's 18th birthday, Lisa will transfer ownership of the account and advise Amy to continue investing $500 annually until she reaches the age of 60. How much money Amy will have when Amy turns 60?

With 11.03% return, Amy would have close to two and a half million and with 14.56% return it will be close to thirteen and a half million dollars when Amy will be celebrating her 60th birthday.

The above table is the projection of the balance by the age considering different lifetime return percentage of four (4) Fidelity Funds which are in existence for more than 30 years.

Thank you and keep building your legacy through Generational Wealth! Take care and don't forget to enjoy the journey and take care of your health.

Note : Please note that the calculations are estimates based on certain assumptions, such as variable annual returns. This blog post is intended to illustrate the potential long-term benefits of consistent saving and investing, not to provide specific financial advice. The information presented on this blog, including any visualizations or projections based on average historical data, should not be considered financial advice. Investing involves inherent risks, and the value of investments can fluctuate significantly.

Call To Action : Open a Custodial Account for your child NOW!