Crafting a Unique Gift for Your Young Adult Kids

Crafting a Unique Gift for Your Young Adult Kids

The Story of My Great Uncle’s Wedding Gift:
Building the Biggest Gift You’ve Ever Given:
Inflation is Always Working Against You:
What About College for Your Young Adult Children?
Remember, Your Goals Come First:

While shopping for my kids this Christmas, I’m reminded how much you just want to spoil them. What parent can resist this natural instinct? There are few things better than seeing your children’s excitement on Christmas morning as they open their presents.

Taking this instinct further, it’s also natural to want your kids to grow into the best adults they can be. You give them chores to teach hard work, an allowance to learn budgeting, and help with homework to encourage learning. For things they can’t do themselves, you still want to give them every opportunity to excel.

This got me thinking about a much bigger gift…

This past summer, one of my great uncles passed away from old age. He was a favorite of mine and a positive influence on my Dad. At his wake, a story was shared about how he gave each of his young adult children land as a wedding gift. They lived in a farming community, and though he had done well for himself, you’d never guess it from his modest lifestyle.

That story made me think: How amazing would it be to give your young adult children a wedding gift like a piece of land, a house, or even just the money to get started with one?

Let’s dream for a moment. Forget about personal finance goals like saving for retirement or paying down debts, and consider how or if this could actually come true.

What if you tried to achieve this by investing in the stock market? Suppose you start saving when your child is born, putting money each month into a stock market mutual fund with an annualized return rate of 6% after taxes. To hit $100,000 by age 25, you would need to save:

$144.30 each month

As wonderful as it would be to save up and give such a gift, don’t forget that inflation is always working against you. For example, $100,000 today wouldn’t have the same value in 25 years after accounting for a 3% inflation rate:

$100,000 today = $46,697.47 in 25 years

Clearly, this scenario is just for fun. A more likely and practical goal for most parents would be saving to help pay for their kids’ college tuition. You could use the same savings strategy. For instance, to save $50,000 within 15 years, you would need:

$171.93 each month

Generous goals aside, it’s essential to prioritize your own financial goals first. This means paying down debts, saving for retirement, and hitting other financial targets. Only after meeting these main goals can you consider taking on something as ambitious as this. With money, it all comes down to setting your financial priorities.