Age 21 - Looking to Save for Kids Already

AngryDave

Hello all

I am 21, a graduate and about to start a career in the Armed Forces. I am about to have a large slice of disposable income and am looking to start saving already. I plan to do this by monthly investing long term in the following:

An ISA
Premium Bonds
A medium risk 'Green/Eco' type investment fund
A medium/high risk Asia centred investment fund
Perhaps one other fund with lower risk.

However, after doing much research and discussion, I also want to do 2 other things but can't find the product I want:

Something which I pay £20-£30 p/m that I can access when I have kids so I can pay for their education, so quite long term but it's quite a low monthly investment.

Something similar, but my Dad suggested starting something where I put £10-£20 p/m into it for 10 years and start a new one off every year so in 9 years time I will have 9 of these things that I'm paying money into. Then starting in 10 years time, I will have a bonus amount of money which I want to pay for a family holiday or something and these will keep maturing until I stop.

Essentially I need advice on what to set up for the 1st option and secondy what the scheme that I need to set up for the 2nd option. I've heard of endowment policies but most of these seem to be mortgage related and I don't want that.

Any advice would be appreciated.

Murdina

You can pay a regular monthly amount into many different unit trusts, Regular payments over a long period smooth the risk and by picking a variety of funds you can also try and maximise returns. The best thing though is that you can sell them whenever you need them. Many (most?) companies selling unit trusts seem to offer this facility and you can stop and start as you need. I've been doing one for years in 3 different funds and it has probably been my best investment.
The 10 year thing is related to life policies. Years ago what your dad says probably worked but these days life policies don't seem to be that much cop. The most recent one I did which matured last year did not out perform putting the money in a building society.
An idea for you anyway.
(just an afterthought - private education is hideously expensive and in recent years fees have consistently exceeded the rate of inflation. Check out what the schools you would be interested in 15 or 20 years' time charge, work out what 5, 0r 7 , or 14 years at that school would cost you and then see if you are being realistic in saving for it. I'm lucky that we could afford a brief period of paying fees out of income, though whether they were value for money is another story).

CLAPTON

at 21 and asssuming you contribute top a pension you should be concerned about

a. saving for normal things (holidays / cars etc)
b. saving for a rainy day... odd emergency costs
c. saving for a mortgage

all these are about cash savings and not long term investments

only then worry about long term, things like kids education