childrens money

[time2say]

2 children in primary school have accumulated about 10k in ang pow etc. Any ideas on suitable investments?
Sensible ones please...

 

[ocs_woodlands]

2 children in primary school have accumulated about 10k in ang pow etc. Any ideas on suitable investments?
Sensible ones please...

I buy STI ETF for my children..

 

[dongo88]

2 children in primary school have accumulated about 10k in ang pow etc. Any ideas on suitable investments?
Sensible ones please...

if you have investment knowledge then can invest in stock, but of cos got risk la...

if you more to a conservative person, better go for something safer like capital guarantee, like saving plan and etc. Which give you a fix return.

 

[akwl88]

Ssb 2% for 10 years. 1 month liquidity. Capital gutanteed.

Most impt, can sleep well at night

 

[Perisher]

Banks themselves are giving more interest if you can fulfill the criterias but the 2 kids' account most probably can't. SSB, because it can be taken out anytime while still accumulating interest. Knowledge can be picked up in the mean time and then you can take out the cash if you want to use it. ETF if you want higher returns with higher risk but still much lower than buying individual stocks.

 

[Bedokian]

I would leave a cash buffer (say $5K) in their accounts and lump the rest into the family portfolio, with yields aproportioned to them according to their sizes. Meanwhile I would just contribute to the cash portion from our pay check and move some amounts periodically into the portfolio.

 

[BBCWatcher]

Another option: CPF Medisave Account top-ups. MA is earning a minimum of 5% (at their likely CPF account levels, i.e. the first $60,000 per child). If nothing else, somebody needs to pay their MediShield Life premiums (currently $130/child/year), and of course Integrated Shield plans are at least nice to have. If they have an emergency it'll probably be a medical one, with Medisave funds immediately useful to pay hospital bills and such. Also, if their Medisave Accounts ever hit their maximums (the Basic Healthcare Sum) -- early in their working careers, let's say -- then any further CPF contributions will automatically roll into their Special Accounts and zoom their retirement savings up that much faster.

It'll be darn hard to beat minimum 5% yields with circa $5,000 per child to play with, so I think Medisave top-ups should at least be on the short list. Or you can do something like put $3,000 per child into Medisave then the rest into Singapore Savings Bonds if you want to mix things up a bit.

I don't like the STI fund idea. If you're going to do something like that I'd pick a more globally oriented (and of course low cost) index fund. If you/they are going to take on some risk, I'd prefer it be more diversified risk. The STI represents something less than 1% of the global stock market.

 

[dork32]

I would leave a cash buffer (say $5K) in their accounts and lump the rest into the family portfolio, with yields aproportioned to them according to their sizes. Meanwhile I would just contribute to the cash portion from our pay check and move some amounts periodically into the portfolio.

i like your style. the only problem i see with this is it gets a bit messy on how much is yours and how much is your kids.

for me, i eat their money and buy some shares. if they dont have enough, i top up with my own cash. i make them keep records of what shares they own. when there is dividend, they have to come and claim it from me.

 

[Perisher]

i like your style. the only problem i see with this is it gets a bit messy on how much is yours and how much is your kids.

for me, i eat their money and buy some shares. if they dont have enough, i top up with my own cash. i make them keep records of what shares they own. when there is dividend, they have to come and claim it from me.

This is nice if they are old enough to do the recording.

 

[dork32]

Another option: CPF Medisave Account top-ups. MA is earning a minimum of 5% (at their likely CPF account levels, i.e. the first $60,000 per child). If nothing else, somebody needs to pay their MediShield Life premiums (currently $130/child/year), and of course Integrated Shield plans are at least nice to have. If they have an emergency it'll probably be a medical one, with Medisave funds immediately useful to pay hospital bills and such. Also, if their Medisave Accounts ever hit their maximums (the Basic Healthcare Sum) -- early in their working careers, let's say -- then any further CPF contributions will automatically roll into their Special Accounts and zoom their retirement savings up that much faster.

It'll be darn hard to beat minimum 5% yields with circa $5,000 per child to play with, so I think Medisave top-ups should at least be on the short list. Or you can do something like put $3,000 per child into Medisave then the rest into Singapore Savings Bonds if you want to mix things up a bit.

I don't like the STI fund idea. If you're going to do something like that I'd pick a more globally oriented (and of course low cost) index fund. If you/they are going to take on some risk, I'd prefer it be more diversified risk. The STI represents something less than 1% of the global stock market.

i am truly amazed what a big supporter you are for cpf. kids are so young. if it gets into cpf, you wont get to see for the next 50 years. and we are only sg52.

along the way, you kids need money to go dating, buy iphone, buy computer, go universilly, get married, throw wedding banquet, buy car...... this 5% you earn is of no use

what is the use of 5% if you cannot use the money. yeah, if you are so loaded, you have already stashed so much cash, you can consider cpf as a form of savings. then again, if you are so loaded, you probably wont be bothered about the peanuts that cpf is giving you.

also if your kids have just 10k and you are here asking for advice, you are probably not that loaded. you are probably just well to do

you talk about ssb, i can still understand.

 

[kzonexx]

What I did was buy into silver as I felt them over 20 years horizon, there would likely be opportunities to cash out with significant profits... but the moment I bought, it went downhill for over 2 years.. so I decided to cash out after 2+ years. Then it recovered right after !!! I'm still "paying back" my kid for the loss.

Actually if I hadn't exited, I would have made quite abit. The plan would have worked if I had stuck to the plan but emotions got the better of me. So in a nutshell, u really got to be emotionless for such long term investments.

 

[edmund77]

What I did was buy into silver as I felt them over 20 years horizon, there would likely be opportunities to cash out with significant profits... but the moment I bought, it went downhill for over 2 years.. so I decided to cash out after 2+ years. Then it recovered right after !!! I'm still "paying back" my kid for the loss.

Actually if I hadn't exited, I would have made quite abit. The plan would have worked if I had stuck to the plan but emotions got the better of me. So in a nutshell, u really got to be emotionless for such long term investments.

If your horizon is 20 years, shouldn't you buy more when it went downhill?

 

[Bedokian]

i like your style. the only problem i see with this is it gets a bit messy on how much is yours and how much is your kids.

for me, i eat their money and buy some shares. if they dont have enough, i top up with my own cash. i make them keep records of what shares they own. when there is dividend, they have to come and claim it from me.

You have a valid concern. I really do have a system to track the fund allocation from the different members of my family.

And I admire your early start on the kids' financial literacy. I have yet to start off on shares with mine (just savings and bonds at the moment).

 

[orange_sky]

Why differentiate what's your kid's and what's yours?

Sent from Sony D2533 using GAGT

 

[FreedomAngelz]

What I did was buy into silver as I felt them over 20 years horizon, there would likely be opportunities to cash out with significant profits... but the moment I bought, it went downhill for over 2 years.. so I decided to cash out after 2+ years. Then it recovered right after !!! I'm still "paying back" my kid for the loss.

Actually if I hadn't exited, I would have made quite abit. The plan would have worked if I had stuck to the plan but emotions got the better of me. So in a nutshell, u really got to be emotionless for such long term investments.

I bought a lot of Silver below US$18....Target price to exit is US$50 per oz

This year could be the year we will see silver break out

 

[Flex11]

I keep a google spreadsheet to list down how I allocate their funds.

My kid now has 50% on SSB and 50% on OCBC pref shares. Going forward I would want to invest at least 30-40% of their funds in equities or channeled into a POSB InvestSaver or something similar.

 

[Bedokian]

Why differentiate what's your kid's and what's yours?

Sent from Sony D2533 using GAGT

Call it a mental accounting bias.

 

[peterchan75]

1. Put the angpow $ in SSB or you act as custodian buy STI ETF or local bank shares.
2. When they 18+ can open CDP account, and you buy STI ETF or local bank shares and transfer to their CDP. By the time they are 18+, it should be around 20k.

 

[BBCWatcher]

i am truly amazed what a big supporter you are for cpf. kids are so young. if it gets into cpf, you wont get to see for the next 50 years.

I suggested Medisave, specifically. As I mentioned, mandatory MediShield Life premiums at $130/year (youth ages) are the minimum expected outflow. If you can earn 5% on the funds that get spooled out as MediShield Life premiums, why not?

Beyond that, if -- or when -- your child becomes a mother or father, there are maternity bills to take care of. Medisave works for that, too. That's not 50 years into the future, unless you're talking about Assisted Reproductive Technologies. (Medisave can pay for ART, too.)

along the way, you kids need money to go dating, buy iphone, buy computer, go universilly, get married, throw wedding banquet, buy car...... this 5% you earn is of no use

Sure it is, even when -- especially when -- your children do those fun things. A 5% yield on Medisave funds means they'll have more dollars available for medical spending. Having more dollars available for medical spending means requiring fewer non-Medisave dollars to support Medisave-eligible medical spending. Money is fungible, mostly, to a degree. You probably don't want $1 million in your Medisave Account, true, but CPF doesn't let you do that anyway, and we're talking about $10,000 total here.

Or prepay for the next XX years of Integrated Shield coverage for them, earn 5% on that money along the way, and save money on unreimbursed medical care and/or insurance premiums because they have Integrated Shield policies. (XX doesn't have to be 50, but it could be.) Including, in most countries, enough international coverage, too, so they're free to roam around the planet without having to buy travel medical insurance. (The United States would be an exception. None of the Integrated Shield policies offer enough coverage for travel to the U.S.)

As I'm fond of saying, "Zero is the wrong answer." There will be some medical bills in their futures, perhaps near futures. So what's the "right" number? I don't know, but it's not zero. Take a reasonable guess, allocate that money into their Medisave Accounts, and they'll be doing very nicely as that money grows at 5% per year until they need it. And they will need it. When they need it, no problem, they're not cutting into their iPhone budgets -- and they're that much more able to buy iPhones or whatever. Simple!

No, I reject the notion that this is a game only rich people can pay. That's just wrong. Of course I'm assuming that the parent in question already has adequate emergency funds set aside. If not, yes, of course, that's priority one. But medical emergency funds can be and probably should be in the form of high yielding (minimum 5%) Medisave Account funds.

Just to pick an example here of how this math works, let's suppose you are considering paying for the next 10 years of your children's MediShield Life premiums -- that's all. Let's assume the MediShield Life premium is $130 and won't increase over the next 10 years. (Probably unrealistic, but let's assume that for now.) If you just follow a "pay as you go" strategy, that's $1,300 per child, paid in annual installments of $130. Another choice is to deposit approximately $1,004 into each of their Medisave Accounts, and that will accomplish exactly the same thing. (Well, there's a bit of variability depending on when the MediShield Life premium is paid relative to when you make the deposit, but that $1,004 figure is what a financial calculator spits out.) That 5% interest generates about $296 over that decade, even as the Medisave Account gets $130/year drained from it. So $1,004 is enough to sustain a $130/year payout for 10 years.

OK, now let's suppose you do exactly the same thing, but you rely on a hypothetical fixed deposit that yields 2%. There is no such account, but let's just assume that. To accomplish exactly the same goal -- to get a 10 year payout of $130/year -- you would need to deposit about $1,168. That's $164 more, per child, because you're only getting 2% instead of 5%. A kid can still have a lot of fun with 164 extra dollars.

To repeat, MediShield Life premiums are guaranteed. You must pay them, no choice. (Well OK, hypothetically, terminating citizenship, terminating permanent residence, or leaving Singapore for at least 5 years and then filing for an exemption are all possible. But in at least two of those scenarios you would then be free to withdraw your entire Medisave Account, which has been busy earning 5%, so you're still in great shape.) So why not earn 5% on your money as you prepay some number of years of MediShield Life premiums? And that's just the MediShield Life premiums. Any other Medisave-eligible medical spending in their futures? Of course, some. So pick a number, probably not zero, and deposit that number into their MAs. "Take a reasonable guess." It's just good financial sense, for rich and poor alike. (Well, not the really poor who are eligible for MediShield Life premium waivers.)

 

[orange_sky]

I take a very fluid approach to my children's money which is basically they are mine haha

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