My cousin recently had a baby, and I was considering some sort of small investment towards her college fund. My family has historically sucked at college savings, which is likely the reason for our low college attendance rate.
Back when I was younger U.S. Savings bonds were a popular gift. My grandfather would buy bonds for his retirement. But the rates the bonds offer today don’t even keep up with inflation.
And obviously the market is not where I want o put anything right now. It feels like investing now is a good idea, but go only knows where things will be 18+ years from now. Even a good mutual fund at this point seems like something that would have to be watched carefully.
I considered a CD, but that has to be constantly rolled over. I wouldn’t want to have to hand over the responsibility to her parents, that just seems like more hassle for them.
I did also consider an investment with some social significance, like wind energy investing. I figured it might provide a good return, along with investing in the future of the planet she will be inheriting. But from a purely financial standpoint, nothing seems so secure in the alternative energy space right now.
So I considered other alternative investments. I thought about investing into gold, or possibly another precious metal. I actually purchased a Krugerrand for another cousin as a high school graduation gift. What could be better than gold as as gift?
I started to do some research online, and I was unsure of how to best proceed. I had purchased the Krugerrand from a local store, and I’m sure I got screwed on the price. Buying online seems like an even more dangerous place to buy coins. I found some interesting articles, but was still a little unsure.
I decided to check out an online coin dealer that has a good reputation, and seems incredibly stable. Obviously if I’m sending money to someone for gold, I would like to know they are legit.
While there I got a little side tracked. I started checking out U.S. Morgan Silver Dollars, and U.S. $20 Double Eagles. I’m actually more confused now about what I should be looking for. Obviously these coins are made of precious metals, which outpace inflation, and often the Dow (especially the past couple years), but they have investment significance on their own due to the rare, collectible nature of the coins. But on the downside, you pay for the rarity now as well.
Am I looking simply for precious metals, or am I looking for an investment grade coin? It seems like the precious metal would be easier to deal with. I don’t want to have to worry about what condition the coin is in, and I’m certain they don’t want to worry about that. I just want them to be able to liquidate the thing when they need to pay for her college.
If anyone has any experience in investing in rare coins, or precious metals, let me know what you think would be best. I’m looking for a gift for a newborn that will outpace inflation, is secure, and not something that her parents would have to spend any time maintaining.