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 :brickwall


David

Give an 18 year old a lump sum to do with as they wish!:freak3:

Good luck with that.:D

Their first child.They'll learn.:thumb:

Great idea but spend it on their education or housing etc but keep control of the purse strings.

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 :thumb:

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!

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

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.

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!

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!

(total-difference)/2

Oooh, please miss.....me.

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". ;)

lol typo 6-7%

Or ball 10p + Bat £1.10 = £1.20, which is wrong as the bat must be £1 more, so = 5p

Total = £1.10
Minus difference (£1) i.e the bat is £1 more than the ball = 10p
Divided by 2 = 5p

Plus VAT?

:)

5p

day 47

It had to be full every day, as if you add half to a number you will never end up with 100%

lol

Yep,5p and day 47:thumb:

u wot mate :cuckoo: