# College Fund



## Firefly (9 Mar 2011)

Hi all,

If our kids are lucky enough to go to 3rd level in approx 16 years time we want to ensure we have the required funds for them. Our plan is pretty simple...to save/invest using the children's allowance we get. Can anyone offer the best investment option with this sort of money (currently 280 per month) over this time period. We can handle a medium risk to the funds over the next 10 years and would be looking to move to a low risk in the years close to the end. 

Thanks!
Firely.


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## SPC100 (9 Mar 2011)

I am still suggesting that you start with a quinn life product here. I haven't researched the market very well recently, so maybe there is better value these days.

Split your allocation between several of their index tracking funds. Keep none or a very low percentage in Ireland, as your financial future already depends a lot on Ireland.

Re-balance to the original allocations (percentages) every year or two.


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## Firefly (10 Mar 2011)

Thanks SPC100, I'll take a look. Given the fact that Quinn are in administration and I need to lock something away for 16 years I'm a bit nervous.


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## Chris (10 Mar 2011)

SPC100, very good point about not having it invested in Ireland, I couldn't agree more. 

Firefly, another option would be Rabo Direct; they offer a whole range of different funds including commodities and region specific funds. I don't think they are the cheapest when it comes to fees, but I have used them for small amounts of savings and a few funds in the past. I found their system very easy to use, and they are still AAA rated (not that I would pay too much attention to this).
Given the number of funds to choose from you would be able to diversify a good bit, and then in ten years time you could switch to cash or a bond fund.

One thing to keep in mind about funds is their tax treatment. You will have to pay 30% tax on any gains (rather than 25% on standard capital gains) and don't have a tax free allowance. Rabo offer some very good info on their website: [broken link removed]

One way to lower your tax liability is to save the €280 in cash every month, and once you have about €2-3k buy into an ETF. I generally do not make share or ETF purchases for under €2000 as the cost of acquisition and disposal can eat substantially into your profits.


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## Mpsox (10 Mar 2011)

Chris said:


> One way to lower your tax liability is to save the €280 in cash every month, and once you have about €2-3k buy into an ETF. I generally do not make share or ETF purchases for under €2000 as the cost of acquisition and disposal can eat substantially into your profits.


 
Chris, can you explain what an ETF is and how you go about purchasing one?


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## koko1215 (10 Mar 2011)

investment is very important!!!


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## Firefly (10 Mar 2011)

Thanks Chris, I'll look into Rabo. We have saved a bit already so I will look into ETFs - any pointers ?


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## Chris (10 Mar 2011)

Mpsox said:


> Chris, can you explain what an ETF is and how you go about purchasing one?



ETFs are Exchange Traded Funds that for all intents and purposes are like buying a share in a company and they are traded on the same stock exchanges.
One advantage of ETFs is that their charges are usually lower than standard funds. I think there have been a few threads on ETFs, so a quick search should reveal more.


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## SPC100 (10 Mar 2011)

quinn life is a separate company.

I would prefer ETFs myself, but I am not yet fully satisfied with tax treatments of them.

Note their is a 1% gov levy on savings contributions to products like quinn life savings.


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## Chris (10 Mar 2011)

Firefly said:


> Thanks Chris, I'll look into Rabo. We have saved a bit already so I will look into ETFs - any pointers ?


There are many ETFs on the market by some of the biggest banks in the world. There are ETFs that track stock indices, or a certain industry, or country, or commodity. Starting off I would suggest looking at an ETF that is fairly diversified in different industries and countries. A lot depends on how much risk you are willing to take really.
Personally my own investments, and my daughter's college funds, are heavily geared towards commodities and gold, easily making up about 50% of the portfolio. The rest is mainly invested in companies that heavily export to India and China or directly invested in China. Don't take this as a recommendation, just as an idea of how you could split investments. A lot of people would suggest that my approach is quite a risky one.
A relatively low risk equity ETF would probably be one consisting of large cap European companies in a diverse range of industries, but I would stay away from something heavily weighted in financials.
Take a look at the Deutsche Bank and iShares ETFs; I have found their websites very informative. For each ETF there is usually a brochure that lists the actual investments held. The important thing is that you do your own homework and don't rush into an investment.



SPC100 said:


> I would prefer ETFs myself, but I am not yet fully satisfied with tax treatments of them.



I agree, the tax treatment is confusing, but the charging structure of many of the ETFs is significantly more competitive than standard funds.


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## Firefly (10 Mar 2011)

Thanks again Chris...very well explained.


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## Firefly (24 Mar 2011)

shamoon63320 said:


> Investment is very important with out investment we cannot achieved in our life




Thankyou so much


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