$1000 to invest for a 2y/o - options and storage

[donut132]

Okay, here is the question -

for my son's birthday (he just turned 2) his great grandmother gave me $1000 to invest for him mainly for colege and left the choice up to me. In the past we've bought him silver.

However, I was thinking something a little different a few things - In Louisiana an 18 year old can own and carry a handgun just can not buy one. I also plan on making a Gun trust llc which I will put his name on so he can inherent my m1a and FAL's and ar15 since I feel they will be banned by then. ALong those same lines, who knows how restrictive gun laws will be by then.


That being said I have 2 real options - things that will simple Hold value or things that will increase value.

Simply buying more silver bullion is a very realistic option, but stuff like Bonds and mutual funds scare me since I have a bad feeling interest rates will not raise as fast as inflation.

My feelings were - if I buy a good weapon, such as a colt 1911 or nice s&w revolver, do yearly maintenance to keep it oiled so no rust develops; that in 16 years it will do 2 things.

1.) at least be worth the $1000 in todays money in 2029 money - so should hold value

2.) If he chooses (more than likely will) to keep the weapon, he will be able to keep himself safe while off at college, whats the point in sending him off to be a victim.

3.) this is the gamble - IF the left in this country manage to ban guns or make them really hard to get then the pistol will be worth its weight in gold - and this seems like a pretty good probability to me


I am betting against America retaining freedoms.

Thoughts?

SO the real question: What firearms would be the best? obviously stainless but i suppose a cerekote'd weapon would hold up well also.

My real thoughts is a colt 1911, specifically a colt XSE lightweight commander. But I am worried about the aluminum frame, so might have to just go with the all stainless route, but the lower frame is teflon coated which may or may not be good for long term storage.



the stainless looks like this


difference in weight significant thought




guess this is going on pretty long just a different look on investment into something useable

 

[Dean1818]

My vote is on hand, Silver coins, not certificates

The cost of the silver is near extraction cost, so it should be a decent return

But...... There are no guarantees in life

We live, we die, we answer for our life......... Thats all the "for sure stuff"

 

[ChaoSS]

Guns that are getting harder to get cheaply may be better. Look at what has happened to the prices of SKSs and Mosin Nagants lately. Wonder what their value will be in 16 years?

 

[steven58]

If I were buying guns to leave to one who is now 2 I'd suggest CMP M1 Garands. At least Service Grade quality for around $1300.00 you have 2 or one of the specials should keep you under $1k.

 

[BSA1]

You don't say where you live so it is not possible to judge the gun climate of your state. You are also guessing on what the laws in this country will be in 20 years.

Since you asked for advice silver is not a recommended buy. With the low price of gold I would sell the silver and use the proceeds from the sale and the $1,000 cash to purchase some gold.

20 years from now your son will be able to use the gold to purchase a legal firearm and maybe even have change leftover.

I know this will be a big disappointment for you but your son may not be interested in guns when he grows up. One thing will be for certain...a good education and job skills.

 

[rodregier]

Tough choices. The biggest enemies of firearms are rust and politicians.

Don't reject an aluminum frame for longevity. It's corrosion resistance is in some ways better than steel. There are 50 year old aircraft that still have their original aluminum frames, and they are subjected to a lot of punishment too.

 

[IBEWBULL]

What would I do.

Well first off having any gun from a trust may be a good thought legally.
I must bring up some history here. Our forefathers Adams, Washington , Hancock and many others were outlaws according to the Kings law. This is all I will say on tyranny.

Presently there are some great deals on Smith and Wesson revolvers that is if you are vigilant in your quest. I recently found a M 10-7 at a pawn shop for $352 out the door. Just a slight turn line on it. I am sure i could make $150 on it If I needed to. This is a month later now and not a bad investment. I will not do it since I am a S&W fan though.
If you were to focus on the pre lock S&W guns I think you could find several great deals for your sons future.
What you choose and how many you could pick up for a grand is the question.
I would myself look at the 36, 60, K , N and L frame 38/.357s and possibly .22 S&W
No matter what the dollar vlue went to there would still be a piece of craftsmanship and history which could be used to defend life and limb and recreation. Put some ammunition aside also.
Colt is up to crazy prices now and would limit the quantity to most likely one.
I have been passing my irons on before I pass since i want to enjoy shooting with the "kids" they are all getting old now and appreciate them more than before.
I was pleased to heat my daughter wants to take hunter safety after all these years. She wants to hunt with her son. This made my day. She has always likes shooting.
Sorry I veered off corse on the subject. It never fails.

 

[Al Thompson]

I know this will be a big disappointment for you but your son may not be interested in guns when he grows up.

Excellent point and happened to a buddy of mine.

If I were going to buy a firearm for investing, I'd get a classic (Pre '64 Win M70) that will appreciate rather than something currently in production.

 

[InkEd]

Buy him something simple with a 15+ round standard magazine capacity. Buy it in a private cash sale from an individual. Cash for gun. Thank you. This way if the anti-2a groups do manage to have their way over the next 20 years and even have a full ban on handguns, your son will still have "the family secret" for protection because there is no way to track it down to you or him.

That said, I don't think an outright handgun ban will occur really.

I feel that magazine capacity laws might be more restricted in the future and a forced return to "Clinton mags" will become the standard fare. Perhaps, you should invest in a bunch of good quality magazines.

 

[jim243]

3.) this is the gamble - IF the left in this country manage to ban guns or make them really hard to get then the pistol will be worth its weight in gold - and this seems like a pretty good probability to me

Sorry the crystal ball is out for polishing. If you are correct in 16 years ownership of a pistol might not be possible, or at the least if you are able to keep it, you will not be allowed to sell it making it's value $0.00. That is what has happened in England and Australia. Then again, if you are wrong in the same amount of time and the value doubles, you are only getting a 4% return on the investment and inflation will eat up most of that.

The one thing that has a better value that can not be made or destroyed is LAND. In today's market with values so low, find a good piece of cheap land in a good location and sit on it for the next 16-20 years, it should triple in value by then and property taxes on VACANT land is not that much per year.

Jim

 

[Telekinesis]

I don't mean to come off so negative, but in my opinion investing in guns is one of the worst things you could do for your son on a financial level. If you would like to buy your son a new gun and keep it for him until he turns 18, that's great. I wish my parents had done the same. But don't kid yourself into thinking you're investing.

First off, if your son's great grandmother gave you $1,000 to invest for your son's college education, she's gonna be mad as hell when she finds out that you spent it on a gun. And believe me, unless your wife is 100% on board with your purchase, you'll get some residual anger from her.

I can only think of a VERY few guns that actually held their value over the last 18 years, and those that did were either special collector type weapons, or a very specific group of weapons in which new examples became impossible to find (thus driving up the prices of older/used examples). This second category includes things like registered machine guns and imported guns after the imports dropped off. I will venture to say that NONE of the standard production 1911s produced in the last 20 years are worth more than a comparable production gun today. Why would you pay a premium for something older when you could have essentially the exact same thing that is brand new?

Now to get to the investing side. A $1,000 investment in a DOW index in 1985 (indexes are one of the safer/lower return investments) would have been worth over $14,000 in 2010, and that is taking into account both Black Monday in 1987 and the more recent recession. If you had put that same money in the control of a very good broker, that $14,000 could look like pocket change. There were several companies that over the last twenty years produced in excess of six to ten THOUSAND percent return. Those are definitely the exception and not the rule, but it shows what could happen with good investing. Now I will admit thats a tad bit longer than your time horizon and I know the stock market isn't as fun of an investment for us gun guys, but this is about your son being able to afford college. The reason why people are still in the stock market is because it consistently provides positive returns in the long run.

Another point of your plan that I don't agree with is that you are basing part of the value of the gun on its future status as an illegal weapon. First off, I have a friend selling illegally converted machine guns-he's good people, only mentioned working for the ATF once or twice
But on a serious note, investments are worth something because of their high liquidity. When something becomes illegal, liquidity goes down because people don't see the actual intrinsic value, they see the prison sentence associated with purchase. The kind of people who would be buying illegal guns are not the kind of people you want your son associating with. Also, if guns are illegal, shooting for fun just went with it. The only reason to have the gun becomes defense, and the risk of arrest will mean you spend the absolute minimum amount of time practicing to maintain proficiency.

Also, the trust for your long guns only works if transfer is illegalized. If the gun itself is illegal, having it in a trust won't help.

Finally, it is possible for him to grow up and not become a gun guy. In my family it seems to skip generations. It's not a bad thing, it just means your son may have a different hobby.

Again, it's awesome if you want to buy your son a gun. If thats what you feel is rght, go for it! I would recommend a youth .22 or something of that nature so he can shoot it sooner, but that's up to you. Just realize you're doing it for your son's enjoyment and not for an actual investment.

 

[buck460XVR]

With the good market right now, Education IRAs are probably a better investment than you pickin' your favorite gun for him. Even with the last crash, investment returns on my youngest's was still better than buying a Python in 1994. No tax to be paid on interest if used for education either and no risk from fire theft or rust. My will gives my boys the guns when I'm gone.

 

[Mike1234567]

Junk silver coins.

 

[InkEd]

That's not a bad idea about owning some land if they have enough money to buy some.

This sounds kind of wrong... BUT.... You could set up a life insurance policy on one or two of the older family members (with their permission) and have him as the benefactor.

To speak bluntly for a moment, if his great grandmother is somewhat young (around 60 years old) most likely (and unfortunately) she will still not be alive by the time he (your son) is 30 years old.

Set up a policy and use the money to make some of the payments. When she passes away, it will be a sad occurrence. However, he can take the money from the policy (depending on the amount) and use it for something important or just for fun.

Also, I see the point of having something to give him at 18 but in the case of a large some of money you may want to wait a few years longer.

 

[thefish]

I'm with telekenisis. While the novelty of getting him a gun now is fun, it is one of the worst financial decisions. Put it in the Dow index, or buy $500 of apple and $500 of Microsoft. When he is 18, he will be able to buy whatever he wants with that.

When he is older, he may not even like guns. Money, however, well everybody pretty much likes that.

 

[MattShlock]

His parents' parents' parent gives you $1,000 to invest for your young son and you're gonna get him a gun. Really? Let me speak to your wife please...

Get him a Series I U.S. Savings Bond Mrs. Donut.

 

[InkEd]

I agree that buying standard production guns are a real financial investment. Get a few nice things to hand down and be down with it. (Things that maybe banned isn't a bad way to go.)

However, I do disagree with the idea of something losing value when it becomes illegal. It can be the exact opposite in fact. It is a matter of how much people want the outlawed items. (Think about things like bootleg liquor during prohibition.)

 

[Aaron Baker]

Index fund. You can't beat the market by investing in specific stocks, but over the long run investing in the entire market is a safe bet.

An heirloom gun won't be sold for college money, which is the point of this exercise.

A gun is entirely too speculative.

Aaron

 

[bainter1212]

Index fund. You can't beat the market by investing in specific stocks, but over the long run investing in the entire market is a safe bet.

An heirloom gun won't be sold for college money, which is the point of this exercise.

A gun is entirely too speculative.

Aaron

+1 on index funds.

My son's college fund is in a guaranteed return fund indexed to the market. We chose a moderate return that does not go down with the market.....when the market drops, we lose nothing ( we might also gain nothing). When the market starts to climb our funds climb as well. Choose a reputable company.

$1000 is a great start. Set up an automatic payment of $20 a month from your account to add to the fund. Even if he chooses a pricy school, you will be able to cover at least a year or two of his schooling when the time comes.

 

[medalguy]

Index funds can be good but remember the Dow is very close to its all-time highs now. Buying funds at a high is not always a good idea.

Who wants to own guns that are illegal in some way? Definitely not a good investment.

OTOH two years ago I bought each of my kids a few good stocks to hold for their retirement. Examples: UPRR was purchased at $99 per share, and it closed Friday at about $152. Colgate-Palmolive was bought at about $38 and today it's at $63. And, both pay good dividends that should be reinvested. Just saying consider GOOD equities for investment.

Guns generally don't make money, with a very few exceptions. Land investments with $1000? Forget it, one acre in the boonies if you're lucky. Good luck. Actually luck has very little to do with success. Plan your investment well.

 

[ilbob]

What makes you think that putting something in a trust will turn something illegal into something legal. The trust thing for NFA items was an unanticipated side effect of a hastily written law to allow corporate entities to own handguns. Keep in mind the NFA was originally intended to include handguns. We dodged a major bullet back then.

Put the money into something that will earn interest like a government bond, or a stock, or a bank account. SPWL might even be the ticket. But not guns.

There is no guarantee that your kid will not grow up to be a criminal or drug addict and not even allowed to own guns. It is foolish to try and control his life 18 years down the road.

 

[bannockburn]

If I were just going to invest in one gun for a return sometime in the near future I think I would go with a Colt SAA.

 

[rondog]

Buy him silver.

 

[HexHead]

I agree with Telekineses. However, if you intend to go with your original plan, the only guns I'd put that money into would be Colt revolvers.

They are the only guns currently available that are guaranteed to continue to increase in value, and highly unlikely to be covered by any bans.

If you do put it into the market, as was intended, given how you feel, I'd put it in Smith & Wesson stock (SWHC). You're pretty close to being able to buy a round lot of 100 shares.

 

[gspn]

I don't mean to come off so negative, but in my opinion investing in guns is one of the worst things you could do for your son on a financial level. If you would like to buy your son a new gun and keep it for him until he turns 18, that's great. I wish my parents had done the same. But don't kid yourself into thinking you're investing.

+1.

I sell investments for a living. Over the past 20 years I've sold stocks, bonds, mutual funds, options, you name it...it's what i do. I've sold to both individuals and institutions...and I would never consider buying a gun to be an investment.

Like others have said...buy him a gun if you want him to have a gun...I've done it several times for my kids. But a more realistic approach given your time horizon is to invest in stocks using a mutual fund. It gets you diversification and professional management. I'm a licensed securities expert with two decades of experience...and almost all of my stock money is in index funds.

There are no shortcuts...you'll have to do some research...but it will be worth it.