Advice from Nashville's Financial Guru Dave Ramsey
Dave Says
By Dave Ramsey
Author of Financial Peace and The Total Money Makeover
10/26/2004
Mutual fund as a wedding gift?
Dear Dave,
I have a 20-year-old grandson who is getting married soon and is somewhat of the same mind as we are about finances. So, instead of giving him a cash gift of $500 for a wedding present I wondered if it is possible to give him a mutual fund? And if I do, what would it be worth in 20, 30 or 40 years. I want to give him a reason to keep it.
Linda
Nashville, Tenn.
Dear Linda,
It is possible. I would suspect you could open the mutual fund account for him as long as you have a social security number. At the very least, you could give him the paperwork with a check stapled to it.
To answer the second part of your questions, what would $500 turn into if it averaged 12%? Thirty years would put him at 50, as an example. If he never adds anything to it, the $500 would grow to about $18,000 at that point. If he leaves it alone 50 years, it would be worth $200,000 at age 70. That's amazing. That's a heck of a wedding present.
Dave
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