# Where to invest 1000 for 21 years



## pgrim (26 Jan 2009)

Thinking of putting away a lump sum of 1000 euros each for my 2 babies. We are emmigrating so was thinking of leaving the money in Ireland for them until they were 21 where they could then access the money and use the funds for a deposit. What are the options available and how much would 1000 euros be in 21 years, given an interest rate of say 4-8% on avarage. Would a managed fund be the best for the long term or would the fees eat away any profit. Also the children would be non resident for tax when they are old enough as we will probably still be overseas.
Appreciate any comments


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## mercman (26 Jan 2009)

I think i'm seeing double !! You know it really doesn't make any difference how many times you put this Post on. You'll get the same amount of replies.


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## pudds (26 Jan 2009)

mercman said:


> I think i'm seeing double !! You know it really doesn't make any difference how many times you put this Post on. You'll get the same amount of replies.



ah he posted it in the wrong forum and was asked to post it here.


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## pgrim (27 Jan 2009)

its not the quantity of replies, its the quality..


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## Padraigb (27 Jan 2009)

The maths is simple: for a 6% average return, it's €1000*(1.06)^21. That's about €3400.

The present rate of fall in house prices would need to continue for a long time if €3400 would serve as a worthwhile deposit.


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## jhegarty (27 Jan 2009)

Padraigb said:


> The maths is simple: for a 6% average return, it's €1000*(1.06)^21. That's about €3400.
> 
> The present rate of fall in house prices would need to continue for a long time if €3400 would serve as a worthwhile deposit.



And let's not forget what inflation will do to it (once it stats again).

Either way in a deposit account it won't cover the deposit for a car, let alone a house.

Given the long term of the investment would the stock market be an option ?


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## Lsquared (27 Jan 2009)

You might need to put patriotism aside and look at this pragmatically. You will probably wish to add to this sum over the years. 1000 in todays money 21 years from now will probably buy very little. It will make much more sense for you and your children to be in a position to keep a close eye on the performance of this money and the institution you are thinking of leaving it with. For that time frame I think you want to look at investing the money, not just leaving it on deposit - you might want to look at a company or fund with a dividend reinvestment programme.


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## Bronte (27 Jan 2009)

You are talking about an amount of money that is not worthwhile investing unless you mean more than 1K?  If it is indeed only 1K I'd buy prize bonds.


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## ringledman (27 Jan 2009)

Putting money away for 21 years then it has to be in equities especially at today's prices. 

Shares may fall further but will 99.9% chance of being worth more in 21 years time unless we do a Japan and deflation becomes the norm. 

Putting it into a cash account with likely inflation on the way is a bad option for such a long time frame. 

The longer the investment timeframe the better suited equities are to it. 

Try a global growth fund or if it was me an emerging market fund. The fundamentals for emerging markets over the long term are far better than the ageing and indebted western markets (Ireland, UK, US, etc).


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## pgrim (27 Jan 2009)

The reason for 1000 is that i wont miss it now, and because of the length of investment it may grow into something worthwhile in years to come. Deposits are out as the return is no good. Premium bonds would be worth nothing in 21 years time, unless we get real lucky. 
I like the sound of an emerging markets fund or another equity fund fo rthat matter. How would the investment returns/dividends be taxed each year, and at the end of the 21 years when it would be withdrawn?


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## ringledman (27 Jan 2009)

pgrim said:


> The reason for 1000 is that i wont miss it now, and because of the length of investment it may grow into something worthwhile in years to come. Deposits are out as the return is no good. Premium bonds would be worth nothing in 21 years time, unless we get real lucky.
> I like the sound of an emerging markets fund or another equity fund fo rthat matter. How would the investment returns/dividends be taxed each year, and at the end of the 21 years when it would be withdrawn?


 
Putting the money into premium bonds or cash would make a very poor return over 21 years. 

If you get an Accumulation equity fund (Usually says Acc after it) then all dividends are reinvested. You would therefore pay no tax until it is sold (I think!).

Set up a trust and it should be tax free. 

Emerging market funds are available at fidelity.co.uk. They should be able to advise on different options and sell other ompanies funds at a discount (fund supermarket).

Also don't pay more than 1-1.5% annual management fee. High fees can nail your return.


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## george.shaw (28 Jan 2009)

Do not put a one way bet on any asset class - that is what got us into this mess.

Diversify properly into more defensive assets not dependent on economic growth.


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## ringledman (31 Jan 2009)

george.shaw said:


> Do not put a one way bet on any asset class - that is what got us into this mess.
> 
> Diversify properly into more defensive assets not dependent on economic growth.


 
erm like what???

To diversify is to reduce your risk but also your return.


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## george.shaw (31 Jan 2009)

the coming years will be about return of capital rather than return on capital.

best to remain somewhat defensive in short term until we get some visibility as to the severity of the likely global depression - thus best to look at some dividend paying equities, cash, bullion and AAA rated index linked bonds.


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## ringledman (1 Feb 2009)

george.shaw said:


> the coming years will be about return of capital rather than return on capital.
> 
> best to remain somewhat defensive in short term until we get some visibility as to the severity of the likely global depression - thus best to look at some dividend paying equities, cash, bullion and AAA rated index linked bonds.


 
Wouldn't argue with that at all. Big fan of gold and high cash generating high yield stocks. Also if I was to get into bonds then they would have to be index linked as the central banks are doing a great job of bull******* the true inflation rate and working the printing presses overtime.

However for a long term investment of 21 odd years away and of only 1000 euro you need to put it into a single fund and then forget about it. Gold will have its day during this period and its best to invest in the economies of the future (i.e. emerging markets) with a single simple low cost management fund.

With such a time frame in mind volatility should be of no concern. You wouldn't even want to check its worth for 5 years. Put the papers in the draw and forget about it. 

Emerging markets have the fundamentals and current value price to return handsomely over 21 years.


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## Maximus152 (12 Feb 2009)

1000 Euro, its not exactly worth diversifying, unless your into penny stocks. Or did I miss something here. I mean what invest 10 euro here, 250 euro there, 500 on bonds waste of time unless your talking about 10,000 Euro. 1000 Euro, I d put that in a Canada life or similar long term invest policy, add 10 euro pm. You can see what you will potentially earn.


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