Old Wallet
This year, I paid for my kid’s christmas money (I give them each $100), out of my pocket. Zapped, right out of my old wallet. Next year, I’m going to start a “ Kid’s Christmas Money Fund”!
So what is a Kid’s Christmas Money Fund?
The fund will be money I put into a 4 to 6% dividend yielding stock that is relativly low risk (I hope). Maybe an energy stock (or energy transfer stock) or something that has a similar risk level (maybe McDonalds?).
My goal is for the fund to pay out $100 to each kid until there are 16, then I’ll double the amount to $200.
So how am I going to start out this fund?
Starting in January, I’m going to seed the fund with $1,000 from savings. Then each month, I’ll start to save $200. Every time my saved amount equals $1000, I’ll buy more shares of stock. So my total deposits per year will end up being $2,400.
| The Kid’s Christmas Money Fund | |||||
| Additional | Scheduled | Accumulated | Interest | Dividend | |
| Year | Money | Deposits/Yr | Amount | Rate | Yield |
| 2010 | 0 | 1000 | 1000 | 0.04 | $40 |
| 2011 | 0 | 2400 | $3,440.00 | 0.04 | $138 |
| 2012 | 0 | 2400 | $5,977.60 | 0.04 | $239 |
| 2013 | 0 | 2400 | $8,616.70 | 0.04 | $345 |
| 2014 | 0 | 2400 | $11,361.37 | 0.04 | $454 |
| 2015 | 0 | 2400 | $14,215.83 | 0.04 | $569 |
| 2016 | 0 | 2400 | $17,184.46 | 0.04 | $687 |
| 2017 | 0 | 2400 | $19,584.46 | 0.04 | $783 |
| 2018 | 0 | 2400 | $21,984.46 | 0.04 | $879 |
| 2019 | 0 | 2400 | $24,384.46 | 0.04 | $975 |
| 2020 | 0 | 2400 | $26,784.46 | 0.04 | $1,071 |
| 2021 | 0 | 2400 | $29,184.46 | 0.04 | $1,167 |
| 2022 | 0 | 2400 | $31,584.46 | 0.04 | $1,263 |
| 2023 | 0 | 2400 | $33,984.46 | 0.04 | $1,359 |
| 2024 | 0 | 2400 | $36,384.46 | 0.04 | $1,455 |
| 2025 | 0 | 2400 | $38,784.46 | 0.04 | $1,551 |
It’s a little fund, but a fairly easily obtainable.
I wonder if it’s worth the trouble…
Every since my early 20s I’v always thought it would be awesome to have dividend yielding funds for expenses.
I’ve already started a Lunch fund (and it’s coming along quite nicely :)).
How I do it, is I pick a stock or two and designate them just for that particular fund. When I add more money for the fund, it’ll go just into those particular stock.
I remember your lunch fund idea. Okay, here are two concerns I have. What safe and solid that you can expect to be around for the long haul will pay you a 4$ interest rate? Second, if you are making monthly contributions to the fund then how will you insure that transaction fees don’t eat up a huge portion of your contributions?
Ahhh, good questions!
For the stocks, I’m looking at REITs and Enervy stocks. The are risky, but I’m investing money that I would have wasted on buying lunch anyway. I fully expect the lunch experiment to be a very bumpy rollercoaster of a ride! 😀
As for the Transaction fees, I only buy the stock once a year, after I get about $1,000 saved up. Another great alternative to stocks would be mutal funds, but I like dabbling in stocks…