My son’s first birthday is coming up and my parents want to gift him $1k in a separate account under his name for him to use in the future. My husband and I make about $250 combined but paying off student loans and a mortgage so don’t have much in assets. My parents only make $50-70k a year. We’re all pretty clueless about money. What would be the best way to invest in his future?

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Consider a 529 to have it grow tax free

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A college fund like this is ideal for that gift

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Do a 529 plan. It’s likely state tax deductible for your parents (google to see if that is the case for your parents state) and grows tax free for your child’s education.

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Just put it in VTI or VOO

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Buy him a rental property

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I’ve had a good experience with fundrise

Open a 529 or UTMA in your son’s name. Whenever he gets cash gifts, put it in there (or half of it if he’s old enough to spend money). Over time it will keep growing.

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Wouldn’t a 529 affect any financial aid he’d be eligible for in the future? My parents made decent income until they went bankrupt during the financial crisis so I was only eligible for financial aid part of my college years because they didn’t have much saved up

529 owned by grandparents aren’t included on FAFSA. 529 owned but the student or parents are considered parental assets. Considering you have 17+ years to let it grow tax free, the gains will likely outweigh the loss of available aid.

UTMA will count as a student asset and have the biggest impact in reducing available aid.

Also, if you’re making a combined 250k already, your kid might not be eligible for much aid anyways

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