The new heir to the British throne may not yet have a name but he already has a fortune. What stocks can you buy for your kid to help him or her catch up?
The new heir to the British throne may not yet have a name but he already has a fortune.
The firstborn son of the Duke and Duchess of Cambridge is expected to one day become king. However, he’ll inherit not just the titles but a huge chunk of his great-grandmother’s estimated half-billion dollar fortune. The doesn’t also count all the other perks, such as having his face on money, hearing people invoke heaven to save him whenever a sporting event begins, and all the other stuff he’ll get on the taxpayer’s pence.
However, we commoners have plenty of expenses to worry about when it comes to our kids. According to the US Department of Agriculture, parents can expect to spend around $235,000 to get each kid to adulthood. And then there’s college. Assuming that today’s average private college tuition of $43,289 per year grows by 8% (tuition has been growing around twice as much as inflation), the total projected cost for a four-year private college education will be $780,000. All told, that’s a little over $1 million.
So, while the future king may be saved, we commoners need to figure out how to save for our kids.
One of the best ways to do that is to put some money aside in a portfolio. You can put money in a 529 account for their kids. Or, you can save in a Roth IRA where you can withdraw money for your kids’ education expenses. It also gives you more flexibility in what you invest in.
Along those lines, we asked Talking Numbers contributor Enis Taner, Global Macro Editor at RiskReversal.com, what three stocks he thinks will help your kid get rich as a king or, at least, rich enough to at least afford college. [Of course, investing has its risks and you should seek advice from a qualified professional financial consultant who can help you assess your ability to handle risk. You also should also regularly reassess your portfolio as circumstances change.]
Three Stocks That Could Make Your Kid Rich As A Future King:
Enis says: “Biogen has many positives going for it. But, most importantly, healthcare is a secular theme that I think is going to play out over the next couple of decades – not just for the US but globally. One of the difficulties, though, is that the barriers to entry are very, very high because the cost to develop a new drug is $800 million to $1 billion. It’s probably going to be more expensive in the future. Biogen has a very deep pipeline. It’s more than a $50 billion market cap. It has the size and breadth necessary to take advantage of that."
Enis says: “SodaStream is a small cap niche name, a billion dollar market cap. It’s a new product, relatively new over the last few years. The biggest growth market, though, is the US. It’s actually just making inroads. In Europe, it’s much more established. Even though the concern from some (in fact, it has 35% short interest) is that competition is going to take over and they’re going to become only a niche player. They have a big first-mover advantage. I think the pie is going to grow with the market as a whole. They don’t have to be the biggest player. They just have to be a big player.”
Enis says: “Vodafone’s big advantage (I view it almost as a value stock) is that it owns almost half of Verizon Wireless. There have been rumors over the last year that Verizon Wireless might be spun out or Verizon might just buy Vodafone – the whole thing – to take the balance of Verizon Wireless off their hands. “
But do the charts agree with any of Enis’ picks? We ask Richard Ross, Global Technical Strategist at Auerbach Grayson, to chart one of the companies Enis chose.
To hear Enis and Rich discuss what stocks may make your kid rich as a king, watch the video above.