Investing for My Kids: Why I Chose a UTMA Over a 529 (Part 1)

My mom has never bought a single share of stock in her life. And when I asked her why, her answer was basically a highlight reel of the scariest headlines she’d ever seen: people losing everything, people going bankrupt, people who “played the stock market” and ended up worse than broke.

The line that stuck with me most: she genuinely believed you could lose more money than you put in. Like, invest $1,000 and somehow end up owing $3,000.

And here’s the thing — she’s not dumb, and she’s not alone. That fear is incredibly common. It’s just aimed at the wrong target. So let me do what I always try to do here: no hype, just math.

First, the big one: you (almost certainly) can’t lose more than you invest

When you buy a normal share of a stock — or a fund like an S&P 500 ETF — with your own cash, the absolute worst case is that it goes to zero. You lose 100% of what you put in. That’s genuinely bad! But it’s not “you now owe the broker money.” The floor is your investment. Full stop.

What my mom was describing — losing more than you invested — is a real thing, but it’s a different, more dangerous game:

• Margin — borrowing money from your broker to buy more stock than you can afford. Now you can owe.
• Options and futures written the risky way — selling naked calls, that kind of thing.
• Leverage in general — anything where you’re playing with borrowed money.

That’s the world where the horror stories come from. And here’s the honest part: I do trade options (cash-secured puts, mostly) and I’ve held leveraged positions, so I’m not going to pretend that corner of the market doesn’t exist. But that’s the deep end of the pool. Buying VOO with your own money is the shallow end, and the shallow end does not have an “owe money” trap door.

Nobody explained that distinction to my mom. The news definitely didn’t.

The news only shows you the car crashes

Think about how financial media works. “Retiree calmly bought an index fund and it slowly went up over 20 years” is not a headline. It’s not a story. Nobody clicks it.

“Trader loses life savings on meme stock” — that’s a story. So is the bankruptcy, the crypto blowup, the guy who bet everything on options and lost. The extreme cases get 100% of the airtime, which quietly teaches people that the extreme case is investing.

It’s survivorship bias in reverse. You’re only shown the disasters, so you conclude the whole thing is a disaster. Meanwhile the boring, math-y version that actually builds most people’s retirement never makes the screen.

The risk nobody puts on the news: doing nothing

Here’s the part that flips the whole fear on its head.

Everyone treats cash in the bank as the “safe” choice. And in the short term, sure — the number in your account doesn’t drop. But there’s a silent leak: inflation.

As of the last reading, inflation (CPI) was running about 3.5% over the past year. That means the same groceries, gas, and rent cost ~3.5% more than they did a year ago. Your dollar buys less. Every year. Guaranteed.

So the real question isn’t “is investing risky?” It’s “is my money keeping up with inflation, or quietly bleeding buying power?” And for a lot of people, the honest answer is: it’s bleeding.

”But the bank is safe, right?” — yes and no

I want to be fair here, because “the bank” isn’t one thing.

If your money is sitting in a big brick-and-mortar bank’s savings account, you’re probably earning something like 0.01% APY. That is not a typo. On the big national banks, $1,000 parked for a year earns you about a dime. Against 3.5% inflation, that’s a straight-up loss of buying power — you’re paying the bank for the privilege of watching your money shrink.

But — and I’d be a hypocrite not to say this — there’s a better version of “the bank”: a high-yield savings account (HYSA). Right now the best ones pay around 4% APY. That actually beats the current 3.5% inflation. So if you’re sitting on an emergency fund or cash you’ll need soon, moving it from a 0.01% account to a ~4% HYSA is one of the easiest wins in personal finance, and I’d tell anyone to do that first.

So why invest at all, if a HYSA beats inflation today? Two reasons:

1. HYSA rates are temporary. They float with the Fed. A few years ago they were near zero, and they’ll come back down. Inflation doesn’t ask permission.
2. Beating inflation by a hair isn’t building wealth. It’s treading water. Growing your money — actually multiplying it — is a different job, and that’s the job stocks have historically done.

So what does “investing” actually look like for a normal person?

Not options. Not day-trading. Not the stuff on the news. For most people it’s shockingly boring:

Buy a low-cost fund that owns a slice of the 500 biggest U.S. companies — something like VOO — and just… hold it. When you own VOO, you’re not betting on one company surviving. You own a piece of all of them at once. For that fund to go to zero, all 500 of America’s largest companies would have to be worth nothing simultaneously — at which point, honestly, we’d all have much bigger problems than our brokerage balance.

How’s it done? VOO is up about +8.95% so far in 2026 (through late July, dividends reinvested). That’s comfortably ahead of the 3.5% inflation rate — so this year, holding it protected your buying power and grew it.

Zoom out and the long-run number people usually cite for the S&P 500 is roughly 10% per year on average (nominal). That “average” is doing a lot of work, though, which brings me to the caveats — because there’s always a catch.

The honest downsides (there’s always a catch)

I’m not here to sell you a fantasy. Investing in stocks is genuinely risky, and anyone who tells you otherwise is selling something:

• It does not go up in a straight line. VOO was down about 18% in 2022. If you’d put money in at the start of that year, you’d have watched a chunk of it vanish on paper for months. Even right now, VOO is sitting a couple percent below its high from earlier this summer. Green years and red years are both part of the deal.
• “Average 10%” is not “10% every year.” Some years are +25%, some are −18%. The average only shows up if you stay in through the ugly ones — which is exactly when panic makes people sell.
• Past performance doesn’t guarantee anything. Everything above is history. History rhymes; it doesn’t promise.
• You can absolutely lose money, especially over short windows. The one thing that has historically bailed people out is time — long holding periods have smoothed out most of the rough patches. Money you need next year should not be in stocks.

The point isn’t “stocks are safe.” It’s that there’s a risk on both sides — the visible risk of investing, and the invisible risk of letting cash rot. Well-informed people don’t avoid risk; they pick which risk they’re taking on purpose.

How I’d actually start (small and boring on purpose)

If I were walking my mom into this, it wouldn’t be “put your savings in the market tomorrow.” It’d be:

1. Emergency fund first, in a ~4% HYSA. Not invested. Untouchable.
2. Then a small, automatic, boring amount into a broad index fund every month — an amount that wouldn’t ruin your week if it dropped 20%.
3. Don’t watch it daily. Daily watching is how you turn a 30-year plan into a 30-day panic.

Related reading on Hebojago: (https://hebojago.com/post/stay-calm-market-crash/).

Let’s make $millions$ (the unsexy way)

Okay, the fun part. Here’s why I get genuinely excited about this instead of scared:

Put $500 a month into a broad index fund and let it compound at that long-run ~10% average, and after 30 years you’d have somewhere around $1 million. (Illustrative — it assumes a steady historical average that real markets will never actually deliver in a straight line. Reality will be lumpier. But the ballpark is real.)

That’s not a lottery ticket. It’s not a hot stock tip. It’s boring money, added consistently, left alone, doing the one thing cash in a near-zero account can never do: outrunning inflation and multiplying.

My mom spent decades believing investing was the risky choice. The quiet truth is that not investing — letting inflation nibble her savings year after year — was its own kind of risk the whole time. Nobody put that on the news.

So consider this your invitation. Learn the difference between the shallow end and the deep end. Start small. Stay boring. Let’s go make some $millions$ — slowly, on purpose, with the math on our side.

Not financial advice — I’m a software developer who invests and trades on the side, not a licensed advisor, and this is my experience and my math, not a recommendation for your situation. Returns, inflation, and savings rates cited here (VOO +8.95% YTD, CPI 3.5%, ~4% HYSA, ~0.01% big-bank savings) were accurate as of late July 2026 and change constantly — verify current numbers before you act on them. All future/compounding figures are illustrative; past performance doesn’t guarantee future results, and you can lose money investing.

Hebojago is my journey to financial freedom, recorded live — real experiments, real numbers, wins and mistakes. Follow along here.

In 2015 I built a desktop PC from parts. Not a pre-built — I bought every component separately, spread them across the dining table, and assembled the thing myself. Motherboard, PSU, RAM, case fans, cable management I was weirdly proud of.

There was exactly one part I wasn’t willing to compromise on: the graphics card. It had to be Nvidia.

I’d used their cards. I knew the drivers. I knew what the frame rates felt like. The idea of building a machine around somebody else’s GPU just felt wrong to me. That wasn’t a financial decision — it was a taste decision, the same way some people won’t buy a non-Toyota.

Around that same time I was starting to poke at the stock market. I was a software developer with a brokerage account and more curiosity than knowledge. And at some point it occurred to me that the company making the one part I refused to substitute was, itself, publicly traded.

NVDA. So I bought some.

I want to be honest about what my research process was: I liked the product. That was it. No DCF model, no channel checks, no reading the 10-K. Back then, if you weren’t a PC gamer, you had probably never heard of Nvidia. This was years before “AI” meant anything to a normal person.

Then came the crypto mining boom, which made GPUs briefly impossible to buy. Then — the one that actually mattered — AI infrastructure. And now Nvidia is the most valuable company in the world.

The numbers, because no hype, just math

All of these are split-adjusted, which matters a lot here. Nvidia split 4-for-1 in 2021 and 10-for-1 in 2024, so one share from 2015 is 40 shares today.

• Dec 31, 2015 close: $0.80 split-adjusted (the raw price that day was $32.96)
• July 2026: around $205
• That’s roughly 250x from the end of 2015

Put a number on it: $1,000 invested at the end of 2015 would be somewhere around $250,000 today. That figure is illustrative — it ignores taxes, fees, and the fact that almost nobody actually buys at year-end close and never touches it again. But the order of magnitude is real.

I did not have $1,000 in NVDA in 2015. I bought a couple hundred dollars’ worth, because I wasn’t making much money back then and a couple hundred dollars was what I could spare.

A few years later I got married, and my wife and I wanted to buy a home. So I did the thing every investing article tells you never to do: I sold my entire stock portfolio. All of it, Nvidia included.

I don’t regret it even a little. Without the Nvidia gain, we couldn’t have covered the down payment on our first house. That’s what the position actually turned into — not a screenshot of a 250x, but a roof.

Right after the house closed, I started over from zero. Every time I had extra cash, I put it back into Nvidia. My portfolio still isn’t big, but NVDA is now more than 50% of it.

The principle, stated plainly

Here’s the rule I took away from it, and I still use it:

If you use a product, you genuinely can’t live without it, and the company that makes it is publicly traded — buy the stock and hold it for a long time. In the short term the price will do whatever it wants. In the long term, if the product is good and enough other people also can’t live without it, the company eventually pays you back.

This isn’t original to me. Peter Lynch built a career on some version of it — “invest in what you know” — and it’s folk wisdom on every investing forum on the internet. But most people quote the slogan and skip the part where Lynch said the product is where your research starts, not where it ends.

Why it works at all

The reason this isn’t just feel-good nonsense: as a customer, you see demand before it shows up in an earnings report.

Wall Street analysts read filings. You were standing in Micro Center watching the Nvidia shelf get cleared out while the AMD cards sat there. That’s real information, and you get it months before it becomes a revenue line.

You also, crucially, understand why people pay up. I didn’t need a research note to explain Nvidia’s moat to me — I was living it. CUDA, drivers that worked, an ecosystem everything was built around. I couldn’t have told you that would matter for AI training clusters. But I knew the lock-in was real, because I was locked in.

That’s the honest version of the edge: you’re not smarter than the market about the numbers. You’re earlier than the market about the demand.

Where this principle breaks — read this part twice

If I published the story above and stopped there, I’d be doing the thing I started this blog specifically to not do. So here are the four ways “buy what you love” goes wrong, and every one of them has bodies on the floor.

1. Survivorship bias, and it’s massive. I’m telling you the Nvidia story because it worked. I’m not telling you about every product I loved whose stock went nowhere. Think about the products people were obsessed with over the last decade: GoPro, Peloton, Beyond Meat, Under Armour, Fitbit. Beloved products. Devoted users. Shareholders got destroyed. Nobody writes the blog post about those, which is exactly why the strategy sounds better than it is.

2. A great product isn’t a great business. Loving something tells you it’s good. It tells you nothing about margins, competition, capital intensity, or whether the company can stop a competitor from doing the same thing cheaper next year. Plenty of wonderful products are made by companies that can’t make money on them.

3. A great business isn’t a good price. This is the one that gets people hurt today. Whatever you love in 2026, everyone else has probably already noticed. Buying a fantastic company at a ridiculous valuation is a great way to be right about the business and still lose money for five years.

4. The product you loved might not be the product that pays. This is the uncomfortable one for my own story. I bought Nvidia because of GeForce graphics cards. GeForce is not what made Nvidia a $4-trillion-plus company — data center and AI did. My thesis was correct about the company and mostly wrong about the reason. I got paid for a business line I wasn’t even thinking about.

I’d rather tell you that than let it sound like I saw the AI boom coming from a dining-room table in 2015. I didn’t. Nobody did.

The part nobody puts in the story: holding

The 250x number is meaningless without this section, because it quietly assumes you sat still. Almost nobody sits still.

Here’s what “just hold it” actually meant, using the same split-adjusted prices:

• Late 2018: NVDA went from $7.23 in October to $3.17 in December. That’s −56% in about two months, when the crypto mining bust wiped out GPU demand. It took roughly 16 months to make a new high.
• 2020 COVID crash: $8.54 down to $5.33. −38%, in a few weeks.
• Nov 2021 to Oct 2022: $33.38 down to $11.23. −66%, over most of a year, while every headline explained in detail why semiconductors were finished.

Sixty-six percent. If you had $30,000 in it, you watched $20,000 evaporate over eleven months, and the smart-sounding people on TV were telling you it was going lower. That’s the actual cost of the 250x. The math is easy. The stomach is the hard part.

So did I sit through all of that? Not the way the story usually gets told. I have to be straight with you: I am not the guy who bought in 2015 and held for eleven years. I sold every share to buy a house, and I’d make that trade again.

When I came back into the market, it was volatile and semiconductors were getting hit hard. Which, honestly, is what made it easy for me. I knew what Nvidia was doing — I’d been watching the product for years by then — so a falling price didn’t read as danger to me. It read as a discount. I kept buying the dips.

That worked out. I want to be careful about how I say that, though, because “I bought the dip in a stock I believed in” is the exact sentence people say right before they describe a disaster. It worked because Nvidia recovered. It worked because I was buying with spare cash I didn’t need. Change either of those and it’s a very different post.

I’ll also point at my own recent behavior here: I wrote a whole piece about panicking during the 2026 semiconductor selloff — same industry, same lesson, and I still felt it in my chest. Knowing the principle and executing the principle are different skills.

How I actually use the rule now

I still believe in it. I just don’t treat it as a buy signal anymore. It’s an idea generator, and then four questions have to pass:

1. Can I actually not live without it? Not “I like it.” Would I be annoyed if it disappeared tomorrow? Do I re-buy it without shopping around?
2. Is the thing I love actually where the money comes from? Check the revenue breakdown in the 10-K. If you love the app but 90% of revenue is something else, you don’t have the thesis you think you have.
3. Is it public and is it pure? Lots of great products are owned by conglomerates where the product you love is a rounding error.
4. Am I paying a sane price, and can I size it so a −60% year doesn’t change my life? If a two-thirds drawdown would force me to sell, the position is too big — no matter how right I am.

If it passes all four, I buy and I set a horizon measured in years, not quarters. If it only passes the first one, it goes on a watchlist, and I’ve saved myself a lot of money that way.

And since I just gave you rule number four, I should admit I’m breaking it. NVDA is over 50% of my portfolio. That is not a position size I would recommend to anyone, and it didn’t happen because I decided it should — it happened because I kept adding to a winner and never trimmed. If Nvidia has another 2022, I lose a third of everything I have in the market. I know that. I’m telling you so you don’t read “50% in one stock” as the lesson of this article, because it isn’t. It’s the part of my own portfolio I’m least comfortable defending.

My take

The thing I’d want someone to take from this: the reason the rule works isn’t that loving a product is a valuation model. It’s that loving a product gives you a reason to act when the price is telling you to run.

When I came back into the market and semis were getting hammered, the only thing I had that a chart-watcher didn’t was a machine under my desk with an Nvidia card in it that still did exactly what I wanted it to do. That’s not analysis. But it was enough to make me a buyer instead of a spectator, and being a buyer during the ugly stretches is where the entire return came from.

And the best thing that position ever did wasn’t the 250x anybody screenshots. It was becoming a down payment.

Numbers in this post verified July 22, 2026 and subject to change — Nvidia’s share price, market cap, and standing move constantly, so check current data before acting on anything here. I hold NVDA and other semiconductor exposure, so read this with your skeptic hat on. I’m a software developer who invests on the side, not a financial advisor, and none of this is financial advice. Past returns of one stock tell you nothing about your future returns, and the 250x figure above is illustrative — it excludes taxes and fees and assumes a hold almost nobody achieves.