Long term investment

May 24, 2005 1:57 AM

I know nothing about financial instruments, bonds, certificates... And I want to buy some. Please help. (MI)

I want to buy a couple of investments for my new god-son. I want them to be cashable at some set point in the future (I am thinking, for example, in 15 or 20 years).

Ideally, they would involve holding some physical certificate so we wouldn't need to fuss about registering them in his name. Bearer bonds? Also, as we are all in Central Asia, hopefully it won't involve lots of paperwork, record keeping, special requirements, etc.

I just want to put my money in, and be certain the family will be able to get the payout years from now. Suggestions?

posted by Meatbomb to Work & Money (7 answers total)

How much were you planning on spending? What is the currency the god-child will most likely be saving in?
posted by JPD at 4:56 AM on May 24, 2005

An excellent investment (as of 3 years ago) that you can hold onto w/ no immediate tax consequences are the the Series I US Bonds. They have a maturity date, but you aren't required to cash them in at that time (you continue to earn interest for a long time after maturity). If he starts making bad decisions, you don't have to give them to him (if he's not holding them at 18, he can't cash them in). I'm not entirely certain how this would work for you in C. Asia, but if you were in the US and he used them for education, you could get a tax credit/deduction (it's been awhile, I am a little fuzzy on the exact method of tax savings).
posted by blackkar at 5:52 AM on May 24, 2005

An excellent resource for this type of question is The Motley Fool...especially the exceptionally helpful discussion boards. You have to log on to view/search...but it looks like you can do so as a guest (not to pitch for them, but my wife and I payed up for access to their boards, and it was one of the wiser decisions we've made). There are some incredibly savvy users there (not to say the MeFi folks aren't).
posted by tpl1212 at 6:45 AM on May 24, 2005

It's not as traditional, but consider a 529 plan for college. They generally let almost anyone open an account for anyone regardless of relation, and there are plans that automatically redistribute assets depending on how close to college the child is.
posted by RikiTikiTavi at 9:33 AM on May 24, 2005

Response by poster: JPD: I wanted to spend about $500. USD is the main currency here.
posted by Meatbomb at 8:41 PM on May 24, 2005

You are basically screaming out for savings bonds but I don't think they will be the most negotiable instrument in Bishkek.

I mean the don't have a big transaction fee, you don't need to maintain a bank account of any sort, and they have a guaranteed return in USD.

I think you could buy the bond pretty easily as long as you have someone you trust coming from the states but I think it could be a real debacle when the beneficiary tries to get his cash.
posted by JPD at 12:14 AM on May 25, 2005

The beauty of 529 Plans are the tax deductions received at the time of donation, which wouldn't benefit you here. You can purchase bonds (US Treasury bonds, strips, etc.) through a Schwab or Fidelity account, and I don't think the country of residence matters... You can also purchase them directly through the gov't, but I don't know if they would ship internationally.
posted by blackkar at 10:55 AM on May 25, 2005