25k to invest for grandchildren

Interesting legal take on this.

If the sums were a lot larger and it was an unsecured or risky loan, then I would definitely agree with the legal approach.

But as the sums are relatively small, I would think that this just would not be an issue.

David - you should pay 2% interest on the loan because that is what you will be saving.

The calculation is very easy.
At the end of Year one, you will owe your son 25,000 +2% = €25,500
At the end of year two, you will owe €25,500 +2% = €26,010

If you had done this two years ago, your sons would each be €1,000 better off now.

This is a higher rate than State Savings
This is much more flexible than the State Savings.
You can cash it in part or in whole whenever they need it.

Brendan
 
noproblem said:
Maybe sit down and have a chat with said "kids". After all it is their money and they need to have an input. Just in case you feel they wouldn't know much "about such stuff", it might help to remember what the professionals in the financial world did with our money when they thought we knew very little "about such stuff".
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That's such a good idea. Thanks
 
I think I'll go with a simpler option: either state savings bonds or some sort of investment/tracker thing that doesn't have huge fees with the stockbroker. The idea of having to trigger the up to 25% tax free lump sum investment on the buyback bond when potentially not a great time to do so is not appealing, and I don't want to be in a situation that I can't "pay back" the kids whenever they want me to.
 
noproblem said:
Maybe sit down and have a chat with said "kids". After all it is their money and they need to have an input. Just in case you feel they wouldn't know much "about such stuff", it might help to remember what the professionals in the financial world did with our money when they thought we knew very little "about such stuff".
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I wouldn't do that either. While it is good that children know about money, it is not a good idea for them to know they have loads of it. At best, tell them that their grandfather left them a small sum of money.


Remember, €100 is a lot of money to a child. Telling them they have €25,000 could derail them a bit and they think they are rich. They won't realise that that amount of money can be used up very quickly.

Invest the money and get it over with. I presume the stockbroker is charging you for holding the money. The bank may also be charging you for holding the money, so the value will be going down. Stick it in an index fund and let it go or put it in a State Savings plan.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
I wouldn't do that either. While it is good that children know about money, it is not a good idea for them to know they have loads of it. At best, tell them that their grandfather left them a small sum of money.


Remember, €100 is a lot of money to a child. Telling them they have €25,000 could derail them a bit and they think they are rich. .


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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SBarrett said:
I wouldn't do that either. While it is good that children know about money, it is not a good idea for them to know they have loads of it. At best, tell them that their grandfather left them a small sum of money.


Remember, €100 is a lot of money to a child. Telling them they have €25,000 could derail them a bit and they think they are rich. They won't realise that that amount of money can be used up very quickly.

Invest the money and get it over with. I presume the stockbroker is charging you for holding the money. The bank may also be charging you for holding the money, so the value will be going down. Stick it in an index fund and let it go or put it in a State Savings plan.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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With respect Steven I don't agree at all with that assumption. At the moment the money would pay their UNI fees for a few years were they to go to 3rd level so I think by talking to them and letting them know that it's there for that reason you might be surprised how attentive they would become. That's not including all the other costs involved. Hard to believe that €25k is not a lot of money but such is the world we live in today. In any case, I agree with you that they need to get it over with and stick it into what you suggest.
 
SBarrett said:
Remember, €100 is a lot of money to a child. Telling them they have €25,000 could derail them a bit and they think they are rich.
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Absolutely.
If I understand it correctly we're talking about a 10 & 12 year old here.

I know he's a little younger, but my 8 year old today asked me if my car cost more than 1,000 euro, and asked me how many years it took me to save up that much! He'd probably need medical treatment if he knew how much it really cost!
 
noproblem said:
With respect Steven I don't agree at all with that assumption. At the moment the money would pay their UNI fees for a few years were they to go to 3rd level so I think by talking to them and letting them know that it's there for that reason you might be surprised how attentive they would become. That's not including all the other costs involved. Hard to believe that €25k is not a lot of money but such is the world we live in today. In any case, I agree with you that they need to get it over with and stick it into what you suggest.
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There's a big difference between telling a child that their grandparent left them money for their education than telling them that they were left money that they can get when they are 18. An 18 year old is still a child and shouldn't be given €25,000, thinking they will be responsible with it. Odds are that they will waste it and may even be pressurised into spending it on nights out with friends.
 
SBarrett said:
There's a big difference between telling a child that their grandparent left them money for their education than telling them that they were left money that they can get when they are 18. An 18 year old is still a child and shouldn't be given €25,000, thinking they will be responsible with it. Odds are that they will waste it and may even be pressurised into spending it on nights out with friends.
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The Collison brothers from Limerick had no problem handling it.
 
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