Debates
17 Jan 05
17 Jan 05
Originally posted by invigorateIs this a debate?
My first child is due in April and I would like to invest in a project now that will mature in 18 to 20 years to help him or her through college/university.
Where should I be putting my money, initially about £10k?
In the US, there are programs specifically designed for education investment. I just signed up for a program called EdVest for my one-year-old, where I can inverst money tax free. Of course, being poor, the numbers I deal in are nowhere near the kind of numbers you speak of.
17 Jan 05
Originally posted by invigorateAmerican Century Funds has a fund called Gift Trust that is designed for children. The rules are that it must remain untouched for something like 10 years. Get a prospectus to check returns.
My first child is due in April and I would like to invest in a project now that will mature in 18 to 20 years to help him or her through college/university.
Where should I be putting my money, initially about £10k?
17 Jan 05
2 edits
Originally posted by invigorateInvest in me!
My first child is due in April and I would like to invest in a project now that will mature in 18 to 20 years to help him or her through college/university.
Where should I be putting my money, initially about £10k?
I cannot assure you that there will be any return, but I'll enjoy having the 10k at my disposal while it lasts... 😉
Seriously (although I am not qualified to advise, so anything you do based on my post is at your own risk!) - have you looked into the Child Trust Funds that have been launched by the government to begin this year?
Visit http://money.msn.co.uk/MyMoney/Insight/SpecialFeatures/FromAFinancialAdviser/Childtrustfunds/default.asp for some details - or google them. (Note there are some more links at the bottom of the msn article which will offer useful advice)
You won't be able to put the funds in all at once by the look of it, but splitting the funds (putting some somewhere 'safe'😉 can reduce the risk of your investment (obviously this means you might reduce your return if your other investments do well and you had spread your money in other places also).
As it is for your child's future it is IMO (but remember I am no expert!) best stashed somewhere relatively risk free. If you are not going to need to touch it, maybe look at fixed term guaranteed rate bonds, low risk, but known return. If you work out how much your child is likely to need to go through uni at 18, then work out the growth needed to achieve that amount, you will have a fair idea where you need to put it to get that return.
www.moneyfacts.co.uk or www.moneysupermarket.com might be worth a browse also as financial resources. also the quality sunday press money sections and the bbc ain't bad resources.
Slightly unrelated - www.moneysavingexpert.com is a good resource for cutting bills etc, but may have links to reliable low cost independent financial advice - again worth considering, or at least visiting.
There are probably many more sites that can help, and don't rule out your bank's advice either (just remember it is not likely to be independent!) 🙂
Good luck with your eventual investment choice 🙂
Edit: to correct dodgy link
17 Jan 05
Originally posted by invigorateBest long term investment IMO is the stock market, in the UK something like an Index tracker (FTSE100, FTSE350 etc) are always good, they outperform about 90% of all managed funds, and as you do its yourself no fees 😀
My first child is due in April and I would like to invest in a project now that will mature in 18 to 20 years to help him or her through college/university.
Where should I be putting my money, initially about £10k?
The best way to get an index tracker is through an ISA (interest free savings account). Think the max you can invest is 7K per year, although you could spread the money between 2 ISA's (assuming you put one in your partners name). Most banks do ISA's.
Halifax have some good long term investments, risk level varies in terms of cash investment, bond or stock market. But then again so do the returns and as this is over a long period you can afford the high risk for at least the first ten years then transfer into say the bond for 5 years then cash for the last 2-3 years. From memory they also have one option where they guarentee you wont loose money, so the only risk is how much you make (thats the last one I invested in).
Also remember that the stock market out performs everything over the long term........ but always DO YOUR OWN RESEARCH never trust someone else when they say buy this..... Motley Fool do a fantastic book to learn how to play the stock market. (which you can also do by sheltering in a tax free ISA)
Also a good site to find out all investment option in the UK is www.fool.co.uk
Please note I am not an FA this is all just my opinion.
If you fancy a gamble though check out TRK, ULT and Minmet all high risk long term investments but with great potential for huge returns. But like I said "do your own research".
17 Jan 05
All I can add is good on you.
I used to bank money weekly for my two boys who were living with their mother.
We split when they were 3 & 5.
So for 10 years I totally funded all my sons costs, everything - school, clothing, food, plus paid their mother $70 on top of everything else even though she had remarried. Plus picked them up and took them home, every 2 wks and for 1/2 the school holidays, without fail for 7 of those years when I lived 2 hours distant.
I see now how much of a mug I was.
2 years ago she and her husband, they have 2 kids also aged 4 & 7, asked me if they could borrow my 2 boys money so they could put a deposit down for a house.
I said sure, took out the 40,000....you can guess the rest.
From then on life has been hell, the mistake I made was not documenting anything or getting a binding agreement drafted up by a lawyer.
I even paid their power bills during winter because their mother said they could not use the heaters (which I bought also)
Now theres a big access battle going on.....
good on you but please tie upyour little ones savings so no one can deprive them of it later.
18 Jan 05
Originally posted by invigoratehere's what i reckon ...
My first child is due in April and I would like to invest in a project now that will mature in 18 to 20 years to help him or her through college/university.
Where should I be putting my money, initially about £10k?
get yourself an online account to buy shares on the sharemarket.
find 10 very different companies.
do not try to find "sure things"
just find 10 different companies so that you cover most of the options in the business world,
try to make sure the companies have very little in common.
mining,
computers,
retail,
power,
transport,
recycling,
food,
etc
then invest exactly 1000 in each company.
from this investment you will receive dividends ...a small income over the years .... if your kids need that money now ... spend it now ... otherwise reinvest it.
18 Jan 05
Originally posted by invigorate
As pure speculation I was thinking of buying some Rand surely that South Africa's currencey can't get any lower.
Hahahahhaahah... haaaa.
I hear when a man walks with a wheelbarrow full of Zim money , they dump the money and steal the wheelbarrow. I wouldn't invest my child's future on SA's Rand 😉
19 Jan 05
Originally posted by invigorateMy 2p worth. For a 20 year term. shares are the way to go because they have historically performed well. There are thousands of investments which will wrap shares for you - look carefully at total fees. Many will take up to 3% a year which could be half your total return.
My first child is due in April and I would like to invest in a project now that will mature in 18 to 20 years to help him or her through college/university.
Where should I be putting my money, initially about £10k?
For direct investment, even ten shares is not enough to spread your risk. A tracking fund is low cost and will cover the whole market - I would be sure to diversify outside your domestic share market. I would also take some time to invest - a lump sum could be put into term deposits and invested at maturity over several years.
19 Jan 05
Originally posted by steerpikeHowever I feel shares in the 80's and 90's went up too much too quickly, and now the market might take ten years to get its breath back.
My 2p worth. For a 20 year term. shares are the way to go because they have historically performed well. There are thousands of investments which will wrap shares for you - look carefully at total fees. Many will take up to 3% a year which could be half your total return.
For direct investment, even ten shares is not enough to spread your risk. A track ...[text shortened]... nvest - a lump sum could be put into term deposits and invested at maturity over several years.
Besides I've got an endowment mortgage? Ouch!