Maths (Accountancy?) Question
11 October 2017, 05:38 PM
#1
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Maths (Accountancy?) Question
A pal of mine's wife is having her first child in November. I suggested that he should chuck a pound a day into a fund and when kid was 18 he/she could be surprised to have a decent lump sum to use as they wish. Even with diminishing value it would still be a fair amount.
But how much would it amount to? Say an account was opened with 3% compound interest over 18 years?
Compound interest was never my strong point
David
But how much would it amount to? Say an account was opened with 3% compound interest over 18 years?
Compound interest was never my strong point
David
11 October 2017, 06:22 PM
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Give an 18 year old a lump sum to do with as they wish!
Good luck with that.
Their first child.They'll learn.
Great idea but spend it on their education or housing etc but keep control of the purse strings.
Good luck with that.
Their first child.They'll learn.
Great idea but spend it on their education or housing etc but keep control of the purse strings.
11 October 2017, 09:32 PM
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Won't argue with that. Bit of a mix I think - decent party maybe first car with the rest for uni etc etc.
Thanks for that. Ends up with circa £8,600
12 October 2017, 07:01 AM
#5
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I'd be inclined to stick £30-50/month into Vanguard Lifestrategy 80/20 through a shares ISA on the kid's behalf. Returns should be much better than 3% (think 6-8%) and its well diversified - very much an invest and forget fund.
I'd also never give an 18yo a lump sum. I'd say 25 is the right age, I base this on myself (27 now) who would likely have squandered it at 18 but at 25 I'd more likely have re-invested it or used it to buy a flat.
Don't get me wrong, nothing wrong with squandering money and having fun, but it should be your own money IMO - not money that's been gifted!
I'd also never give an 18yo a lump sum. I'd say 25 is the right age, I base this on myself (27 now) who would likely have squandered it at 18 but at 25 I'd more likely have re-invested it or used it to buy a flat.
Don't get me wrong, nothing wrong with squandering money and having fun, but it should be your own money IMO - not money that's been gifted!
Last edited by HonestIago; 12 October 2017 at 07:02 AM.
12 October 2017, 04:21 PM
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I'd be inclined to stick £30-50/month into Vanguard Lifestrategy 80/20 through a shares ISA on the kid's behalf. Returns should be much better than 3% (think 6-8%) and its well diversified - very much an invest and forget fund.
I'd also never give an 18yo a lump sum. I'd say 25 is the right age, I base this on myself (27 now) who would likely have squandered it at 18 but at 25 I'd more likely have re-invested it or used it to buy a flat.
Don't get me wrong, nothing wrong with squandering money and having fun, but it should be your own money IMO - not money that's been gifted!
I'd also never give an 18yo a lump sum. I'd say 25 is the right age, I base this on myself (27 now) who would likely have squandered it at 18 but at 25 I'd more likely have re-invested it or used it to buy a flat.
Don't get me wrong, nothing wrong with squandering money and having fun, but it should be your own money IMO - not money that's been gifted!
Thanks very much for that - very interesting. Had a lot of fun playing with numbers and investment period. 30 quid a month from 0 to 60 (retirement age) gives you over £300k at 7% albeit with some risk. I wonder how this would compare to a regular gold investment although I suspect the tax situation would kill that idea?
Thanks, David
12 October 2017, 04:35 PM
#7
Stocks & Shares ISA is definitely one of the better long term options, I always put the max allowance into a work scheme against multiple funds every year/when I can, returning @ 60% annually at the moment. As you say there's risk involved.
Last edited by bioforger; 12 October 2017 at 04:43 PM.
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12 October 2017, 09:10 PM
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12 October 2017, 10:25 PM
#9
Anyone listen to Radio 2 mensa quiz this morning? Don't cheat if you did!
If a bat and a ball cost £1.10 and the bat was £1 more than the ball. How much did the ball cost?
No cheating!
If a bat and a ball cost £1.10 and the bat was £1 more than the ball. How much did the ball cost?
No cheating!
12 October 2017, 10:30 PM
#10
A load of lilies on a pond expand by half every day. By day 48 it was full.
At what point was it half full?
Sorry DL. Just checking everyone's maths!
At what point was it half full?
Sorry DL. Just checking everyone's maths!
13 October 2017, 02:49 AM
#11
13 October 2017, 02:56 AM
#12
The point at which the pond is half full is not a full day....
"I'm sorry. My responses are limited. You must ask the right question".
13 October 2017, 02:32 PM
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14 October 2017, 03:05 AM
#17
14 October 2017, 03:06 AM
#18
14 October 2017, 07:17 PM
#20
lol
Yep,5p and day 47
Yep,5p and day 47
