Jeff Tjornehoj on "Business for Breakfast" 1060 KRCN Tuesday, December 5, 2006 - Investment Gifts

A: Yes, I do. I noticed in the Black Friday shopping rush no one wasbeating down the doors of the local brokerages to jump-start theirchildren's or grandchildren's financial future.

Q: Funny, I didn't notice that either...

A: But it is something people should give greater consideration. I'm notnaive, of course; I have two young kids, and I know that if all they gotfor Christmas was a piece of paper they'd freak out. But that could be amore-meaningful gift in the future than the toys they'll outgrow or getbored with in a few months.

Q: Are you thinking of savings bonds?

A: I'm not a big fan of savings bonds. They're too easy to cash out--almostany local bank will exchange them--and they don't provide much of a return.They're very safe, obviously, but kids have a long investment horizon, andwe shouldn't be reluctant to get them invested in something with moresizzle--such as equity mutual funds.

Q: But don't mutual funds usually have higher minimum investments than mostpeople are willing to make?

A: Yes, they do--but not all of them. There are about 40 funds with fairlylow minimums ($250 or less) and six with no minimums (from C/Funds,Neuberger, and RMK). I didn't vet these out very closely, so there may berestrictions.

Q: Okay, suppose you find a decent fund--then what?

A: It'll take a bit more time to set up a gift account for a minor thanjust writing a check. In fact, if you go to AARP's Web site (www.aarpfunds.com), the organization will walk you through the process.Conveniently, AARP also offers three different funds with only $100 minimuminvestments. Thereafter, you can add in $25 amounts. These low-minimum AARPfunds come in conservative, moderate, and aggressive flavors and have beenaround for only about a year.

Q: And the kids get a glossy brochure?

A: Yes. Just put it in a big cardboard box. That's always what they want,right?

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