Investing £70,000 for a child
Comments
-
i would save some then spend some to send her to private school, thats also an investment in the child.
That's a good point. However I would fear that sending a 10 year old (age next school year) to a Private School, with people who have been at Private School for the previous 6 years may be a 'fish out of water' situation. May do more harm than good. To be fair, she goes to the highest ranked Academy School in North East England, so she's already very lucky to have that on her doorstep with no fees.0 -
If your mother is a wealthy woman suggest she see a lawyer and make the gift by Instrument of Variation. If she does that within two years of the deceased's death the money will be classed for IHT purposes as never having entered her estate.
In fact it's not too hard to draw up an IoV oneself: there's a useful government site to visit.
https://www.gov.uk/alter-a-will-after-a-death
Thanks. She's not wealthy at all really. Her home and savings etc probably totals a maximum of £300k so I doubt IHT will be a problem. Thanks for the info!0 -
National Savings. Cannot see anything else for now. Very low savings rates.0
-
Can I just ask: WHY is it important that the money not be at risk?
Normally, safe investments are recommended where the money has a very specific purpose and it really needs to be that much, or if the timeframe of investment is short, so volatility could have a major impact. So, for example, if you planned to buy a house soon, you should have your deposit somewhere safe to make sure you don't have to pull out of a purchase because of a stock market dip. And people managing their own pension investments tend to move towards safer instruments as they approach retirement.
But that's simply because "risky" investments fluctuate. The stock market could drop a few percent in a single day, which is a disaster if you need the money tomorrow - but if you hold onto the shares long enough, they'll make it up. Historically, they always have, eventually. And in the long run, they earn you much more than safe investments. So if you're investing over a period like 10 years, without any particular plan for the money at the end, you really should look at higher-return investments. Yes, there's a chance that you wind up with £60,000 instead of £70,000. More likely, though, you'll end up with something more like £110,000 - and a good chance of a fair bit more.0 -
ThePants999 wrote: »Can I just ask: WHY is it important that the money not be at risk?
Normally, safe investments are recommended where the money has a very specific purpose and it really needs to be that much, or if the timeframe of investment is short, so volatility could have a major impact. So, for example, if you planned to buy a house soon, you should have your deposit somewhere safe to make sure you don't have to pull out of a purchase because of a stock market dip. And people managing their own pension investments tend to move towards safer instruments as they approach retirement.
But that's simply because "risky" investments fluctuate. The stock market could drop a few percent in a single day, which is a disaster if you need the money tomorrow - but if you hold onto the shares long enough, they'll make it up. Historically, they always have, eventually. And in the long run, they earn you much more than safe investments. So if you're investing over a period like 10 years, without any particular plan for the money at the end, you really should look at higher-return investments. Yes, there's a chance that you wind up with £60,000 instead of £70,000. More likely, though, you'll end up with something more like £110,000 - and a good chance of a fair bit more.
Hi. Thanks for the response. It is something I will consider. But if I'm honest, my ex wife, my daughters mother, is aware of the 70k being given to our daughter (in my care), and if I managed to lose some of it, I'd never hear the end of it and probably have to make the shortfall up myself.
However, I do get your point about a long term investment being fairly 'safe' when the money isn't needed next week, or even next year.
Thanks again.0 -
Hi. Thanks for the response. It is something I will consider. But if I'm honest, my ex wife, my daughters mother, is aware of the 70k being given to our daughter (in my care), and if I managed to lose some of it, I'd never hear the end of it and probably have to make the shortfall up myself.
However, I do get your point about a long term investment being fairly 'safe' when the money isn't needed next week, or even next year.
Thanks again.
How would your ex-wife know what the value of any investments were? She would have no right to that information.0 -
CommyTooper wrote: »National Savings. Cannot see anything else for now. Very low savings rates.i would save some then spend some to send her to private school, thats also an investment in the child.
£70,000 wouldn't be enough to cover seven years (assuming the OP's daughter went at 11). Current fees for a day school will be well in excess of £10,000 p.a. (the cheapest are around £11,500) and these will rise every year.0 -
If the money isn't needed for 5-10 years, put it into a stocks and shares fund.
It would be most unwise to keep the money in cash savings if access is not needed for 5-10 years.
Refusing to take "any risk" is an extremely short term view that makes no sense when you are saving for the long term.
You cannot avoid taking risk. You either take investment risk (i.e. shares fluctuate up and down in the short term, with good returns over time) or you take inflation risk (which is a much bigger risk over the long term).0 -
All good points ValiantSon, and steampowered. I will have a good think about being a bit more adventurous :-)0
-
ValiantSon wrote: »£70,000 wouldn't be enough to cover seven years (assuming the OP's daughter went at 11). Current fees for a day school will be well in excess of £10,000 p.a. (the cheapest are around £11,500) and these will rise every year.
There are some backed by some pretty huge charitable or religious trusts that cost less.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.2K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards