Help, my daughter is a low earner 😱

And only manages a paltry 2.33% of our savings rate.

A few days ago, I shared the first dividend my daughter received. 66 cents. A comment, presumably not entirely serious, from @CryptoPfand got me thinking: "My son has €13 in dividends so far (born in November)... Is your daughter only 3 days old? In any case, congratulations!". Just think about it, @CryptoPfand . She can't be just 3 days old because of the ex-day 🤦

No, my daughter was born in October 23. We currently invest €35 a month for her in a junior custody account in her name and €35 in a custody account in my name, which she will receive as a gift at some point. Dividends are reinvested in the respective custody account, all gifts (for her, for her birth, ...) end up in her junior custody account. Why two custody accounts? My wife doesn't feel comfortable with the fact that she will have a large amount of money at her disposal on her 18th birthday without any ifs or buts. Splitting the money into 2 custody accounts is the compromise that has resulted from this.

An average of 3,000 euros of my wife's and my income currently goes into our own savings accounts every month (in total, not in each case). The ratio of our daughter's savings rate to our savings rate is therefore ridiculously low. We even collect her child benefit instead of investing it like some others here ( @AlterMann ). I guess that makes us stingy, bad parents.

But let's do the math first. Excluding gifts of money and assuming a 6% return per year, at 18 she has a deposit of just under 27k. If we assume an annual inflation rate of 2.5%, the conservatively calculated 27k corresponds to a current purchasing power of over 17k. That's a lot of money. Or just money.

Why do we think this is a reasonable sum?

First of all, we are in the privileged position of being the parents of a healthy daughter 😍. In addition, we are lucky enough to be able to provide financially for ourselves and for her - something that cannot be taken for granted.

After that, it's important for us to pass on values to our daughter and raise her in our interests. This also includes a sensible approach to and a good relationship with money. We want to use our very good financial situation to make her start in adult life a little easier. But we also want her to understand that being able to afford almost everything is not a given. We don't think a 200k deposit for her 18th birthday, as some people present on getquin, makes sense.

As parents, we are always there for her to support her in emergencies. Thanks to our reserves, this will also be possible without any problems. However, we are not there to finance a life of luxury for her or to relieve her of all (financial) worries. We have therefore opted for a relatively low savings rate.

What do you think? Would you pay more into our daughter's savings account if you were us? How do you provide for your children? How much are you putting aside? Why exactly this amount?

@GoDividend
@InvestmentPapa
@DerMartin and all other parents