Start Them While They’re Young

If your youngster shows an interest in investing, it has never been easier to get him or her started regardless of age.  Once an individual reaches the age of majority (eighteen years in most states), he or she may have an investment account registered solely in his or her name.  Youngsters under the age of eighteen are not permitted to have their own brokerage accounts.  However, several ways exist for parents to introduce interested youngsters to investing. 
Dividend reinvestment plans (DRIPs) may provide an interesting investment vehicle for kids.  Many child-familiar companies offer DRIPs-Walt Disney, Mattel, just to to name examples.  Since many DRIPs permit very small investments, the programs are a good way for youngsters with limited funds to start investing in the stock market.  Through Sharebuilder, youngsters can have an account setup for them to buy stocks in specific dollar amounts automatically.  Don’t have $300 to afford a share of Apple stock?  No problem, Sharebuilder offers fractional share purchases.
If you decide to establish an investment account for a minor, consider carefully how you want the account registered. If you choose to have the account in your own name, you will be responsible for taxes on the account.  The good thing is you will also retain complete control over the account for as long as you want. 
An alternative is to set up the account as a Uniform Gift to Minors Account (UGMA) through reputable brokers like Rydex, Fidelity and Cam Trading. Funds in the account are in the minor’s name and Social Security number and are considered to be owned by the minor.  Dividends paid on the account are taxable, most likely at a preferred tax rate.  The adult custodian is responsible for the account until the minor reaches the age of majority.  Parental control is lost at the age of majority, which can be seen as a downside to UGMAs. 
Lastly, certificates of deposit and savings bonds are okay investments, kids should own stocks or stock mutual funds.  Risk is the last thing your child needs to worry about in an investing program.  He or she needs to capitalize fully on the power of time in their investment program as they have the advantage of time working for them. 

Investing for Your Children’s Future

There are a million ways to the truth in money management, and no such things as the “Holy Grail.”  And if you’re raising children and facing serious tuition prospects in the near future, here are a few guidelines to follow.

Of course, college education today can cost as much as $40,000 annually.  And that’s before you buy books, much less the computer-related fees that are standard in higher learning today.  If you take the route into private education earlier, at the high school level, the costs are still mind-boggling.  Boarding schools can charge more than $24,000 a year.  And because many parents are in a dual income (professional) household, preschool and private grammar schools can set you back $15,000 a year or more. 

I believe in a three-part practical approach to investing for a child’s education.  Start with U.S. Treasury zero coupon bonds.  These bonds pay no interest in cash.  You can buy them at a discount, say, 30 cents on the dollar.  They mature at face value in a specified time frame.  This way you can target maturities to match your requirements like, maturities to coincide with freshman year in college, and so on. 

Currently, money doubles in these instruments in 11 years so that $5,000 automatically becomes $10,000 in October, 2020.  This works out to be about 5.9% annually.  Not so hot, you say?  Perhaps, but it makes sure that part of the tuition is taken care of automatically, and you don’t have to suffer through the sometimes (if not more often) negative bias of the stock market. 

The second part of investing for children’s education involves periodic purchases of a good growth mutual fund.  Such can be found through Rydex and CAM Trading.  And money should probably be systematically added to the fund so that you can take advantage of dollar cost averaging (putting similar amounts in monthly or annually, often when prices are lower and more shares can be bought).  Any financial website can provide you with historical returns of all the mutual funds they carry.  The earlier in a child’s life you start this program, the better it will work. 

The last part is the most aggressive part, and like the growth-oriented mutual fund, it requires patience and discipline.  It involves hiring a professional investment management firm where your money can take advantage of both the ups and downs of a cyclical market. 

Put your plan into action.  The earlier, the better.  Invest at the same time each year, like a child’s birthday, or during the holidays.  It makes it simpler to remember and becomes automatic.  It also helps you stay discipline and patient. 

Believing in Your Product or Service

All too often, Financial Advisors who are just starting out (and some veterans, too), get stuck promoting a product or service they know is a dog.  I know this sounds harsh, but lots of people have earned a living simply by taking the money and checking out at the end of the day.  But I promise you this:  If you don’t believe in what you’re doing, you won’t have the energy it takes to find out what you need to understand your customers and the value of your product to them. You won’t want to do whatever it takes to make your idea a success.  And if you’re a “Samurai Worrier,” you probably need a strong belief in your product just to drag yourself into work each day, let alone be successful at promoting it.

The Financial Services industry has the second highest employee turn over rate in the nation!  Second, only to Real Estate sales.  Why?  Because many people find that, while the money and income can be good, the product or service they are required to sell to get to that certain comfort level requires true passion and belief.  Many people get into Real Estate sales because they are on one of these three stages in life.  They were laid off or fired from their jobs, retired, or they have the entrepreneur spirit and wanted to be on their own.

I’ll admit it, I too, got foolish and got into Real Estate sales.  I was 28 at the time, and retired from my full time employment.  CAM Trading was self-sufficient enough and generated passive income for me, so I was able to take some of my time and money to pursue that.  Plus, I had seen an infomercial one late night and thought, “wow, I could be sitting in my own private island right now, wearing a buttoned-down floral shirt, but only if I call right now and order, operators are standing by!”

Two weeks after I made my first real estate sale (and a total time investment of 2 months), I decided that my passion wasn’t there.  I couldn’t get myself out of the house and into that drab Realty office to sit there for an hour answering phones.  I enjoyed the training and learning about real estate law, but it was a means to an end (getting to buy my private island to sip some fruity drink).   I ultimately wanted to relate to, talk to, and manage other people’s investments.  Being a realtor didn’t allow for that.

Unlike my real estate sales experience, I’m in this business because I know we can do better for people regarding their investment choices, in fact, we have in the 5 short years of going pro.

So, when you do what your inner calling directs you to do, you’re more comfortable, happier, more energized, more focused.  And those qualities bring success, whatever success means for you.

Client Services and Financial Advisor Teams

Advisors who work in a team generally do better than those who work on their own.  Many financial services firms have over 50 percent of of their advisors in teams.  At CAM Trading, we too, work in a team environment as we feel that the only way to succeed for our clients is to work together at it.  The team structure works well in large part because of the productivity and client-service improvements they afford.

Advantages of Teams

Teams often specialize so that each team member can be an expert in something without needing to be an expert in everything.  This specialization can be in a particular practice area (trading, portfolio management, communications or some other element).

Clients can appreciate their advisor being part of a team because they feel that with a team, there is always someone there to take care of them who is familiar with their situation.  This gives clients a sense of community should something happen to their advisor.

Financial services can be a competitive business, and advisors can be very protective of their best practices and reluctant to share them with potential competitors, even within the same firm.  Sharing ideas among and getting input from all members of the team is invaluable.  As such CAM Trading and its team members are very careful with its proprietary trading models.