Setting Up Long Term High Yield Account for Children

subfreq

I am making the first steps towards opening an account or investment opportunity for my twin daughters. I want it to be quite long term, 20 years, so that when they need a leg up in life I have money for them.

In a lot of investment books I read it says you should be able to find a compounding interest rate of about 10%. I have never seen anything near that in Ireland and wondered whether anyone could point me in the right direction for further research on good long term secure investments. By secure I mean no element of risk.

Cheers

soddy1979

"High yield" and "no risk" are mutually exclusive concepts.

ixus

soddy1979 wrote: »

"High yield" and "no risk" are mutually exclusive concepts.

This.

I couldn't rell you any asset that would have or will give you 10% per annum compounded over the next 20 years. I wish I could.

If you want no risk, you're talking about government bonds, but they are in demand at the moment so you would pay a premium for them against if you bought them 6 months ago.

To avoid currency risk (assuming we stay in the euro) I would suggest a European index tracking ETF. But I would wait a little while before investing in that. If you have a large chunk 10K+ you are goin to put in intitially just hold off 6 months and see how the markets are then. You could then start adding on a monthly basis.

Maybe 50/50 in european bonds & equities on a monthly basis, but just hold off as I think bonds are overbought and equities have more downside. You'll not time it perfectly though.



This chart (German Bund (10yr bond) v DAX (German index))shows how diversifying in bonds & equities should give you a negative correlation meaning when one is making money, the other is losing. However, it limits your exposure/risk (diversification).

bored and tired

Sorry for jumping on the band wagon here, but i was wondering how would you buy on a monthly basis without paying high charges, or where do you go to buy without having to pay any service charges,

i would like to put a bit of money away for college in 10years time, but fine investment lingo offputting, so please explain it to me like you were talking to a five year old untill i get the jest of it, thanks.

pocketdooz

I put money into an AIB parent saver account every month for my nieces and nephews. It pays 10% for the year in which you save and then it rolls into a lower rate. I think it might be worth a look for you. You could also look at the Halifax 6% savings account or the Anglo 7.5% account.

You will not find a riskless opportunity that pays 10% per annum. Especially not in this time of low low interest rates.

Good luck