Unlocking Wealth for the Next Generation: The Power of Custodial Accounts
In today’s financial landscape, building generational wealth starts early. Custodial accounts (UTMA/UGMA) are a smart way for parents to invest in their child’s future beyond traditional savings.
What is a Custodial Account?
A custodial account is an investment account for minors, managed by a parent or guardian until they reach adulthood (18 or 21, depending on the state). Unlike savings accounts, these allow investments in stocks, bonds, and mutual funds, fostering growth over time.
Why Choose a Custodial Account?
1. Higher Growth Potential
Investments can outperform traditional savings accounts, combating inflation.
2. Tax Advantages
Some gains are taxed at the child’s lower rate, reducing overall tax burden.
3. No Contribution Limits
Unlike 529 plans, there’s no cap, allowing flexible investing.
4. Broad Usage
Funds can be used for anything benefiting the child—education, a business, or major life expenses.
Getting Started
Choose a brokerage like Schwab, Fidelity or Vanguard.
Fund the account with an initial deposit.
Select investments based on long-term goals.
Manage until the child takes ownership.
Building Generational Wealth
Custodial accounts align with Alejos Capital Group’s vision: financial freedom through strategic investments. Giving children assets, not just advice, sets them on a path toward independence. Start investing today—because wealth begins with action.