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Investments in Your Children's Future Are the Best 'Gifts' You Can Give Them This Holiday Learn about four investments you can make to protect your kids long-term.

By Eran Roth

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With the holidays upon us, chances are your children are clamoring for that new toy or video game. But there's another gift you can give even if Junior won't appreciate it for years to come.

Related: How I Used Real Estate to Pay for My Newborn Daughter's College Education

That gift is an investment in your children's future. As a parent and an entrepreneur, you likely already have a retirement fund under your belt, but have you considered alternative and traditional ways you can invest your extra cash to protect your children? In fact, it's easier than ever to invest these days, thanks to advancements in technology; and you can start a new investment fund with as little as five dollars. Think of that fund as a more sophisticated way for you to save yet still enjoy impressive advantages.

Of course, all the investment opportunities available can be overwhelming. So, to help you filter out the noise and make good decisions, here are four investment options parents should consider as great places to put their savings:

Commercial real estate

We often think of real estate in terms of home ownership or maybe "house flipping," but there are lucrative opportunities too in the commercial side of the industry that are no longer exclusive to ultra-wealthy investors. Online real estate platforms make it possible to invest in commercial real estate without ever stepping foot inside a property, and crowdfunding options create even more access.

A recent survey from LendEDU asked participants to choose how they would invest $10,000, and real estate was the second most popular choice among millennials, Generation X, and baby boomers. Nearly 23 percent of those surveyed said they would pool their $10,000 with money from other investors.

When you're first starting out, a smart strategy is to focus on one type of investment, whether it be apartments, offices, retail, land, etc. A popular type of commercial real estate is student housing units -- the very places you might be paying rent to when you send your kids off to college. Student housing transaction volume, according to AXIOMetrics, totaled more than $9 billion in 2016, a 62 percent increase from 2015.

So, use all of the tools at your disposal and find a mentor who's been successfully involved in commercial real estate investing. Getting involved with online platforms is a great way to get started in this space and connect with like-minded investors. Using these platforms helps investors to grow and diversify their portfolios with commercial grade real estate properties.

Related: 2-Minute Tax Tip: What's an Educational IRA?

A 529 savings plan

College is expensive and costs will continue to rise. That's why considering a 529 plan is more important than ever. Also known as a qualified tuition plan, a 529 allows you to put away money for your child's college education that grows tax-free. Total investments in 529s reached a record $328.9 billion this year, meaning more people understand the benefits.

American parents with children under 18 have an average of $18,135 saved for college, and 30 percent of college savings are in 529 plans, with the average amount saved in such investment plans nearly doubling from 2016, according to SallieMae/Ipsos data.

The 529 plan is another way to let your money work for you, because your investment earnings compound tax-free..But, as with all investing opportunities, you should start early. If you start a 529 when your son or daughter is born, you have 18 years for that money to grow. Set up the same system you use for your own retirement accounts so that deductions become automatic.

The stock market

Stocks are one of the most traditional places to invest your money and bolster retirement funds; yet a quarter of Americans stay out of the market because they don't understand how it works. Novice investors can research and download mobile apps to simplify the investment process, but it helps to know a few fundamentals.

First, it's important to think about the big-picture trajectory of stock instead of panicking over short-term movements. Short-term trading can be lucrative, but it's more risky than classic buy-and-hold strategies. A $1,000 investment in Apple ten years ago, for example, would be worth almost $10,000 today, CNBC reports. So, adopt a long-term perspective and accept that market volatility is part of the process, just the way raising a moody teenager is an inevitable part of parenting.

Another tried-and-true tip is to diversify the companies you invest in to protect yourself from major losses in one sector. If you put all your money into technology stocks, for instance, you'll be more vulnerable to macro effects out of your control. Instead, vary your portfolio by investing in companies that differ in size, sector, and growth patterns.

When choosing stocks, do as Warren Buffet suggested, which is invest only in industries you understand. This will have no correlation to profits, but at least you'll feel that you understood what happened when your investment goes up or down.


It sounds cheesy, but investing in yourself, whether that means going back to school or starting a business, is something we often neglect, as parents who put our kids first. As the future of work evolves and skill sets change, continuing your education is both an investment strategy and a safety net for when labor markets shift.

The stigma against older students is changing. Over the next decade, the number of students older than 25 years of age will increase by 8 percent, according to educational data. Going back to school can increase your earning potential and provide a good rate of return on your tuition investment.

Today, 70 percent of soon-to-be retirees say they want to keep working. The report, 2018 Small Business Trends for Baby Boomers, from Guidant Financial, found that entrepreneurs over age 50 make up more than half of America's small business owners, and 67 percent of business owners over 50 say their companies are currently profitable.

As a parent, you know that raising a child is no easy feat, and that starting a business isn't any easier. But, with the odds stacked in your favor, starting a business could end up being a huge source of new income.

Related: Why You Should Hire Your Kids This Summer

Watch your money grow.

While putting your money away is tempting, keeping too much in a savings account will erode its value through inflation. Understanding the basics and using the right investment tools will give you peace of mind as you look to invest even during periods of market volatility. Do your research and know that not all investment opportunites are created equal. Some offer more layers of protection than others to ensure that you don't have major losses. Once you learn to let your money work for you, your children's future will look brighter.

Eran Roth

Founder and CEO, Iintoo

Eran Roth is founder and CEO at Intoo. Roth has over 20 years of experience in the real estate investment arena, where he has achieved an impressive track record, which consists of over 250 investments transacted, over $500 million raised from individual investors and management of nearly $2.5 billion worth of assets.

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