Sve/invest £100 a month for the next 20 years

[mr2turbogts]

Where would you put £100.00 a month for the next 20years to at least keep up with the rate of inflation.

Putting cash away each month for my Daughter so she will have a little booster when she's 21. Doing the Maths on property prices and 20 years ago average houses where 90k, today they are now 250k. If this continues average in 2040 will be 700k, so 24k will be nothing.

So ideally would like to put this where it can grow with the rate of inflation (I know houses prices don't follow inflation and the only way to get that return is invest in property itself)

(Sorry for the Typo, Sve = Save, opps)

[GT03ROB]

Look at global tracker funds. Should comfortably beat inflation and over 20yrs low risk.

[mr2turbogts]

GT03ROB said:

Look at global tracker funds. Should comfortably beat inflation and over 20yrs low risk.

Thank you.

Not going to lie I don't even know what they are, but will do some research.

[chip*]

This recent thread is relevant reading for you:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[devnull]

I am doing exactly this, stuffing 100 a month into a Vanguard S&S ISA for the kid / kids future.

[Mr Pointy]

mr2turbogts said:

Where would you put £100.00 a month for the next 20years to at least keep up with the rate of inflation.

Putting cash away each month for my Daughter so she will have a little booster when she's 21. Doing the Maths on property prices and 20 years ago average houses where 90k, today they are now 250k. If this continues average in 2040 will be 700k, so 24k will be nothing.

So ideally would like to put this where it can grow with the rate of inflation (I know houses prices don't follow inflation and the only way to get that return is invest in property itself)

There have been a few threads on this recently so have a bit of a hunt. You could open up a Junior ISA or a SIPP for her.

JISA: £9000 a year, all gains tax free, child gets access at 18
SIPP: £2880 a year grossed up to £3600 by HMRC, cannot access until 57 (currently) but fantastic growth potential over that timescale.

There are many providers who can offer JISAs & SIPPs, look for low charges - Vanguard is one popular option.

[Welshbeef]

It’s also a great way of spreading the cost of Wedding/Forst car/House deposit/Uni fees

[mr2turbogts]

Brilliant, thanks for the replies

[Welshbeef]

To anyone who does read this if £100pcm per child is not affordable anything is a great idea.

Be it £10 pcm you could buy into unit trusts and over time when more affordable increase it.

[Teebs]

I've put £80/month into a HL S&S ISA for the last 4 years and it's returned 23.51% across a mixture of funds for my Son. Slow and steady..

[Luke.]

Welshbeef said:

To anyone who does read this if £100pcm per child is not affordable anything is a great idea.

Be it £10 pcm you could buy into unit trusts and over time when more affordable increase it.

OMG. Welshbeef in not an idiotic post shocker. Are posts that impart something helpful your resolution for the new year?

[bitchstewie]

Go here and prepare to be amazed.

https://www.thecalculatorsite.com/finance/calculat...

£100/month for 20 years assuming a steady 7% and 2% inflation (who knows?) means you'll have around £60K in 20 years time.

Here's where the magic starts.

If you just leave it and do nothing else for 40 years but let it compound there will be about a million quid there.

Things I wish I'd known years ago

[GT03ROB]

Mr Pointy said:

mr2turbogts said:

Where would you put £100.00 a month for the next 20years to at least keep up with the rate of inflation.

Putting cash away each month for my Daughter so she will have a little booster when she's 21. Doing the Maths on property prices and 20 years ago average houses where 90k, today they are now 250k. If this continues average in 2040 will be 700k, so 24k will be nothing.

So ideally would like to put this where it can grow with the rate of inflation (I know houses prices don't follow inflation and the only way to get that return is invest in property itself)

There have been a few threads on this recently so have a bit of a hunt. You could open up a Junior ISA or a SIPP for her.

JISA: £9000 a year, all gains tax free, child gets access at 18
SIPP: £2880 a year grossed up to £3600 by HMRC, cannot access until 57 (currently) but fantastic growth potential over that timescale.

There are many providers who can offer JISAs & SIPPs, look for low charges - Vanguard is one popular option.

I think ISAs sure a far better bet than SIPP. Being able to benefit from something in her late 50s is too far down the line. Too much can change. An ISA gives her a boost far earlier if she needs it & also when she will need it most. I just don’t get investing in pensions for your kids.

[the tribester]

bhstewie said:

Go here and prepare to be amazed.

https://www.thecalculatorsite.com/finance/calculat...

£100/month for 20 years assuming a steady 7% and 2% inflation (who knows?) means you'll have around £60K in 20 years time.

Here's where the magic starts.

If you just leave it and do nothing else for 40 years but let it compound there will be about a million quid there.

Things I wish I'd known years ago

Is that, after 20 years of paying in, then leave it in for another 40 years? So when you're 80, you'll have a nest egg to enjoy?

[GliderRider]

GT03ROB said:

I just don’t get investing in pensions for your kids.

Because the time period is so long and there is 40 years or more of compound interest, the amount required now to make a significant difference is small. This then allows the children to plan the rest of their lives without having to put large proportions of their income into pensions later on, thus giving them greater financial and life choice freedom. As the money is not available to them early in their working life, they are less likely to fritter it away on cars, holidays, etc.

I, for my sins, worked for a life insurance & pensions company about thirty years ago. It was said that, in general, the value of the fund generated by the first three years' contributions would be be worth as much as the total generated by all the subsequent years' contributions. Whether this still holds, I don't know, but compound interest is a wonderful thing when its on your side.

[Benbay001]

Op, if you're not using your own £20k per year isa allowance which im assuming you're not, then you could always invest the kids money under your own name and then if the kid turns out feral or is looking to spunk the money on a gap year to mexico that you disapprove of when they turn 18 then you still have some control.

Id have been fairly reckless if given a potential £50k when i turned 18.

[anonymous-user]

Luke. said:

Welshbeef said:

To anyone who does read this if £100pcm per child is not affordable anything is a great idea.

Be it £10 pcm you could buy into unit trusts and over time when more affordable increase it.

OMG. Welshbeef in not an idiotic post shocker. Are posts that impart something helpful your resolution for the new year?

Maybe he was briefly sober.

[bitchstewie]

the tribester said:

Is that, after 20 years of paying in, then leave it in for another 40 years? So when you're 80, you'll have a nest egg to enjoy?

No that's literally doing what I said.

Use the calculator and run the numbers.

You'd be around 60.

Usual assumptions around global equities continuing to average out around 7% over the long term etc.

[bonerp]

Stocks and shares ISA. I have one where I invest in 4 different pots with 2 high risk and 2 medium and they've done rather well.

Individual shares are more risky IMHO and have seen losses and some do well. Seem to have to sit on these longer and esp AIM shares watch them diligently!

[GT03ROB]

GliderRider said:

GT03ROB said:

I just don’t get investing in pensions for your kids.

Because the time period is so long and there is 40 years or more of compound interest, the amount required now to make a significant difference is small. This then allows the children to plan the rest of their lives without having to put large proportions of their income into pensions later on, thus giving them greater financial and life choice freedom. As the money is not available to them early in their working life, they are less likely to fritter it away on cars, holidays, etc.

I, for my sins, worked for a life insurance & pensions company about thirty years ago. It was said that, in general, the value of the fund generated by the first three years' contributions would be be worth as much as the total generated by all the subsequent years' contributions. Whether this still holds, I don't know, but compound interest is a wonderful thing when its on your side.

I get the concept of compounding. However when kids these days really need the support is in their 20s getting on housing ladders. Pensions however are something that can't be drawn upon until kids should have been established through their own efforts, With things such as LTAs coming into play potentially this may also not be tax effective.

Probably not a right or wrong answer to it though,