These high-growth sectors can make the most of your money.
The average tuition cost at a private college is more than $38,000 a year? A four-year program, could cost you more than $152,000 for just tuition. Public schools are more affordable, however, they still cost thousands of dollars a year. Investing and saving money the day your child is born can make these expenses manageable when the time comes.
A good option for this investment type is a high-growth emerging sector that will grow along side your child. Even though it might be hard to choose winners in a fast changing industry, that is where EFTs can work for you. Two of the top ETFs that are suitable for investing long-term are the Digital Health and Global X Telemedicine ETF (NASDAQ:EDOC) and the Artifical Intelligence and Global X Robotics ETF (NASDAQ:BOTZ).
How a $500 investment each month can grow to $1 million
The key is beginning early with investing long-term, definitely if your hope is to build up a big nest egg for your kid before they reach adulthood. These ETFs most likely are not going to grow at 30% yearly over the long haul. However, if they can even average yearly growth rates of 10% to 15%, that is enough to make a significant savings over your child’s first 18 to 25 years.
By investing $500 monthly for 25 years, you would be investing a total of $150,000. That by itself would nearly pay off a four-year private college tuition. But we understand that there are many other expenses to think about beyond just tuition, including school supplies, housing, and transportation. Additional, a healthy savings account can let your child invest in income stocks that make recurring dividends. That is why you should always maximize your investment.
Through compounding, your investment of $150,000 might be worth almost 11 times your investment if you averaged a yearly rate of return of 15%. Your return would be a bit below the $1 million mark at around $949,000 at 12% and it would be worth more than six times your investment. With either choice, investing and sticking to it, you could have huge gains over the years to help secure your child’s financial future.
Set your child up for life by buying and holding these ETFs
Neither of these two funds has done particularly well. The telehealth ETF has went down 16%, while the robotics fund has went up just 10%. If compared, the S&P 500 has increased more than 28%. But the outlook stays strong for the long term and investors should not be discouraged by any short-term returns, even when looking at a longer trajectory and because the focus is on increasing your child’s savings. These ETFs might not always produce positive returns yearly, but that does not mean the strategy has failed.
Technological advancement is a secure investment strategy for the long haul and will set your child up for life.
Author: Steven Sinclaire