Wise Mustachians: I'd appreciate your advice on the following situation:
Each of our children owns closely held, dividend producing stocks (family started the business in late 1800s- on the husband's side). The dividends are paid in cash --no DRIP option. Dividends are issued quarterly. Until the kids were old enough to notice, all birthday/Christmas/etc. cash gifts were put in their savings accounts.
They each have the following:
The Boy, Age 11
-100 shares, FMV ~$10,000
-CD, $1700, 6 month term, matures July.
-Cash, $4300
The Girl, Age 9
-100 shares, FMV ~$10,000
-Cash, $4800
We have separate 529 plans for each of them (small amounts, under $3k each) and grandparents have prepaid 4 years in-state public college tuition for both of them.
What is the best thing to do with their cash from an investment standpoint? It's sitting in a savings/money market/CD right now because we haven't made a decision as to how to invest their funds. We have Vanguard accounts quasi-designated for their investments (ie, in our names, not theirs). Do we do all equities- like the index fund? Or do we do a split equities/bonds? They will not be accessing the funds until they turn 16 and want to buy a car. We will match whatever they save for a car (up to a certain amount, we don't know what that will be yet). Otherwise, we will not really be allowing them to access those funds.
Thoughts? Suggestions? Thanks!