1Yr·

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

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121 Comments

DerMartin@DerMartin

1Yr

Dear donkey,

A truly "tricky" subject, which can and sometimes "must" be approached in many different ways.

Due to my personal situation, I can even look at this topic from several different angles.

I have 5 children, 3 (24, 22, 21) from my first marriage and 2 (11 and 7) with my (as of Friday) second wife.

My 3 big kids: I had a very expensive divorce for me at the time. Our newly built house wanted to continue to be paid for (voluntarily, as I didn't want to deprive my children and my ex-wife of their home) and maintenance for 3 children is really massive. So with these children, I had to make a decision. Option 1: I save a certain amount of money every month and option 2: I create memories, experiences and adventures...
I opted for option 2. We went on vacation every year, we visited parks, we were on the road, we experienced a lot...
All 3 of us had to learn early on to take responsibility ourselves. If it was an iPhone, then we had to work during the summer vacations, if the pocket money was too little, then advertising leaflets were distributed.

All three have become self-confident, hard-working and happy young adults, without a savings account at 18. If something needs to be done today, Dad is happy to help. A small allowance for the car, a new washing machine or even a bike for the journey to training (they have now all completed their training and have jobs and an apartment).

If I talk to them about money today, everything is okay. There are no "accusations" or anything like that, we are completely at peace.

The little ones: My current (soon to be) wife is also part of this and I/we are now doing really well financially (assets >200k and a secure, slightly above-average income).
We go on vacation three times a year and go on many weekend trips. We want for nothing. Nevertheless, as things stand today, my children will "only" have around 20k at their disposal when they are 18. Yes, it could be 50k or more. But why? We will always be ready in emergencies! But we also want them to create their own assets.

When I see how proud my 22-year-old son is that he bought himself a BMW a few weeks ago, saved up from his education salary, then I know it can't have been entirely wrong. Yes, some of his friends have been given better cars, but none of them have that proud gleam in their eyes when they talk about it.

All in all, I think it's more important to give your kids the best childhood possible, spend time with them and love them unconditionally. But whether they start life with 1k or 100k will not make them happier or unhappier in the long run in my opinion.

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Pope Donkey XXI@DonkeyInvestor

1Yr

@DerMartin thank you for your open and great words 😍

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Epi@Epi

1Yr

@DerMartin You seem to have done a lot of things right! Congratulations and have a wonderful wedding!

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DerMartin@DerMartin

1Yr

@Epi At least we tried, but there were certainly a lot of mistakes. But there's also a lot of luck involved. It can happen quicker than you can look and then it's really difficult to influence a young person as a parent...

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Epi@Epi

1Yr

@DerMartin Nobody is perfect. And as long as the children have become independent, happy adults who look back fondly on their childhood, I think you've achieved everything you could hope for as a parent.
Now enjoy your new life!

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Europoor@Europoor

1Yr

@DerMartin 5 children. That's quite a house number. If everyone was this hard-working, Germany wouldn't have a pension problem.

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Manuel@Ghoscht

1Yr

@DerMartin short comment on the glow in the eyes. I can see myself there.

I come from a modest background myself. When I needed something, I had to work.
Going to soccer with my mates, going to work first.

Pocket money, country schools, leisure activities...until I got my driver's license and then my first car. Parents couldn't help so we had to do it ourselves.
Tough times, we were 3 siblings, father full-time, mother part-time and still it wasn't enough. Blame the parents? NO, I saw for myself that everything that was possible was made possible.

It took me years to manage that. In the end, I bought a '91 Ford Fiesta for €2000. All with my own money and I knew how long I had to work for it.

Proud as punch and happy without end...
Some of my colleagues were also given annual cars and new cars as gifts. But none of them appreciated what it was worth. The odd snide comment about my "bowl" was also the order of the day. One of the Rich Kids wrecked the year-old car on the first day, and a new Renault Clio was in the yard a short time later.

But: of course that was tough and of course I would have liked it to have been easier. Nevertheless, from today's perspective, it was exactly the right thing to do in the circumstances at the time.

Don't worry, your son already knows exactly how things work in life, he will know how to assert himself and he will have to work hard for his dreams.
And he certainly knows that you will always be there for him when things get tough.

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Alexander Schober@alexschober_

1Yr

I myself (21 years young) find this more than appropriate and well thought out. I can't yet say anything about my own children, but I myself have never inherited anything like a deposit or savings account etc. from my parents. I was always well off, I had a great childhood but some people here seriously think that a deposit of several thousand euros for your 18th birthday is a matter of course. I wish your daughter continued good health and you lots of success with your deposits for her :)

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Pope Donkey XXI@DonkeyInvestor

1Yr

@alexschober_ Thank you very much. I myself received 10,000 euros from my parents around 18. Adjusted for inflation, probably a similar amount. A gift, of course, and not an inheritance (I hope it won't be any different for my daughter 😅)

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Zackdela79@Zackdela79

1Yr

My daughter is now eight and her portfolio has been running at a similarly high savings rate since birth - for very similar reasons 👍 So I can understand your arguments very well.

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Staatsmann@Staatsmann

1Yr

Even though I know that many people here are just complaining as a joke, perhaps we should also get back to the facts.

No matter whether it's €10k or €5k or €20k:
In all cases, this is quite a lot of money that you are suddenly given and expected to "manage" at the age of 18.

Even with €5k, I would probably have been happy to have an extra hole in my butt when I was 18, because it's simply not a matter of course to receive that much money "just like that".

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Tim S.@TimundStruppi

1Yr

I think that anyone who gets involved in this issue with other people's children is sitting on a high horse, is arrogant or impertinent. There are so many parents who can't give their children a penny, yet are worlds better parents than some who put aside 1k a month. In general, I think that anyone who does something financially for their children is doing something good. Whether it's 1 euro or 1,000 euros, the amount of money has nothing to do with good or bad parents. And comments along these lines are very hurtful, because nobody knows what state a family is in, what the contact is like, how much parents love their children or not. That's why I've stopped talking about this topic. Because envy and arrogance are unfortunately the order of the day when it comes to this topic. Anyone who invests even a cent here is privileged. There are so many people who have nothing to eat at the end of the month, and not just in 3rd world countries. And nobody who does anything for their children should be criticized because of the size of a sum of money.

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Kevin E.@KevinE

1Yr

@TimundStruppi In my opinion, financial education (in addition to general education) is much more important for the child. What good is it if the child can't handle money? You can blow 20 or even 200k relatively quickly - without having to be extremely aware of it. My partner inherited a five-figure sum when she was ~20, which - according to her own statement - simply disappeared over time. Well, she also paid off her bafög debts, but the rest was lifestyle. The scholarship of €1,200 a month was still there for her. Ultimately, this was probably because she had to do without a lot beforehand and made up for it accordingly.

She only learned how to handle money "properly" very late (through me 🙃 ). As her parents weren't really good with money, it was naturally difficult for her.

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Stefan@InvestmentPapa

1Yr

Cheers to the bad parents!
Dear donkey, when will we finally meet in the outside world of Getquin?
Brother in spirit. Unfortunately, I don't have the time right now to give my intellectual input on this post. But I'll make up for it this evening, this afternoon... in the meantime, this comment serves as a placeholder for fun and outreach.

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Pope Donkey XXI@DonkeyInvestor

1Yr

@InvestmentPapa There is an outside world of getquin 😳?

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CryptoPfand@CryptoPfand

1Yr

I would like to formally apologize for my comment 😉
Just kidding, of course. I think every euro you put aside for your daughter today is a good euro. If you're investing several thousand euros with your wife at the same time and putting money aside for your daughter in your name, then it's "just" a dummy entry in your head of what belongs to whom. The point is that your daughter will be better off at the end of her life because her parents have thought about providing for her.
At the moment, we are investing all the child benefit in my name. However, I'm pretty sure that within the next 18-25 years I'll also start opening a custody account in his name and saving in his name. But I'm in no hurry. We're paying off our condominium at the same time, saving additional money into our deposits every month, putting money aside for a vacation home in Italy and if my calculations work out, then our son - once we're gone - will have a much easier life than I would wish for him... 😜😜😜😜

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Pope Donkey XXI@DonkeyInvestor

1Yr

@CryptoPfand No apology necessary. I didn't interpret it as an attack, it just made me think anyway. It's great what you're doing for your son 👍

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Robert W.@Robwe

1Yr

Your daughter's birthday is on the same day as mine - so I'd say you're doing everything right :)

Warren Buffett once said that it's bad when children have so much that they no longer have any motivation to develop. I agree: happiness is not in achieving goals, but in working towards them.

In any case, all the best for you!!!

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Pope Donkey XXI@DonkeyInvestor

1Yr

@Robwe danke

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Tim@investorsapiens

1Yr

My daughter is 8, she also has her own Junior Depot, I have written a lot about this on my website, but I will shorten it to a few lines: I think the most important thing you have to give your child is the right mindset and an understanding of what money is, how it works and how you can make it work for you. Until she started school, I paid her a daddy dividend into her piggy bank (which is now in the Junior Depot) and gave her 1 euro more pocket money per week for every 100 in the Junior Depot that she didn't spend (initially for every 50, but then it became too expensive for me 😅). She now keeps a few euros for expenses and pays the pocket money and the daddy dividend into the custody account. My aim is to shape her mindset so that I don't have to worry about her doing nonsense with money when she's 18.

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DerDanner@Therapeut

1Yr

Respect that you take care of it at all. Don't take it for granted, because some parents can't do that financially either.
I think that's a reasonable amount, because you're also paying huge sums of money for your daughter until she can stand on her own two feet.

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Pope Donkey XXI@DonkeyInvestor

1Yr

@Therapeut Not forgetting the loss of salary due to parental leave, part-time work and the resulting lower pension and career opportunities. Most people actually forget that. But for me, it's actually the biggest "cost factor".

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Hans guck in die Luft@HanslmGlueck

1Yr

Good middle ground. I've got the win of the week.

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Epi@Epi

1Yr

I have a son of my own, 16. When he was little, my wife and I had very little money due to his doctorate. We always spent everything on education (music kindergarten, sports equipment, museums). That seemed like a better investment to us. And the boy was shown how to be frugal with money and have a good life at the same time.

The grandparents have taken over the savings plan, I think there's about 20k in there now. He won't get anything else from us parents for his 18th birthday, but he knows that he'll get all the money he needs to get ahead.
He was given a deposit of €2,000 for his youth consecration, which he is supposed to invest with my support. When he turns 18, he will be allowed to dispose of the money. Until then, the rule is that at least 1/3 of all gifts, job earnings and prize money goes into the deposit. The deposit is now at 4.5k and the boy is slowly becoming interested in investments. We tried GTAA, but his interest is not that strong, so only GAA (a nice diverse global portfolio with gold and crypto). He loves genomics and ki so has ETFs for both. 😅

Long story short: more important than money for the 18th is an education that teaches the right way to handle money. Logically, because if the child can't handle money, even the largest amount is useless. And if they can, the amount is a nice start, but not decisive.

Have fun with your little one!

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Swain@Swain

1Yr

I'm 18 and one of those who got a Junior Depot. I'm really happy about it, but I don't really touch the money and keep investing it. I work alongside school and use the money to spend and invest further. If you're interested, I can write something about it, but I'm not really into self-promotion and, as has already been said here, it's absolutely not a matter of course that anyone can put something aside for their children.

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Pope Donkey XXI@DonkeyInvestor

1Yr

@Swain nice that you are using it responsibly 👍

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Soprano@Soprano

1Yr

I would always think about it in terms of the goal: "How much money should my child have at their disposal when they are 18?" I think a conservative and reasonable answer for the middle class would be around 20k in total, maybe a little less. In return, you get a car, a driver's license and, after the general compulsory schooling, you can pursue an educational path that you like.

Otherwise, the principle of "good times create weak people" applies. If you hand your 18-year-old a six-figure fortune, at least you don't have to be surprised if it turns into a spoiled moron who is good for nothing except working in the Bundestag. #notall

Manageable financial resources create pressure to think about your own future, as you have certain wishes that need to be fulfilled. You also destroy people to a certain extent if you let them go into life without a task. They then simply start to search for meaning and do completely mindless things.

Whether you do this with a junior deposit or not is ultimately irrelevant. It just has a tax advantage. The main thing is to somehow raise the amount you're aiming for.

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Jürgen@Creek

1Yr

Everything done right... I would just like to remind the community of the reality "out there".

The sums you have and save ... many others simply couldn't save. So be aware of your privileged situation (this is not directed at KryptoEsel ... but goes out as a thought to almost all comments) 😁

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Stefan@InvestmentPapa

1Yr

So dear donkey, I'll write a bit of text:

Anyone who goes out of their way to invest every euro in their child's deposit is either completely crazy or so capitalistically out of touch that it doesn't matter. They're probably the same type of parents who feed Chantale-Jackeline oat cookies in the children's toddler group, demonize chocolate and only drink "beer" with brakes, i.e. prefer to shake a 0.0% shandy again so that the rest of the alcohol burps out of the bottle. In addition, you have to have quite a penchant for SM to want to mortify yourself like that.

For many parents, being a parent, bearing responsibility for raising children and introducing them to life means sacrificing until there is nothing left of yourself and your love for your partner (deliberately written here, but includes any kind of gender or non-gender). The same then happens on the economic and financial side.

As a couple, we made a solemn vow before we had a child, during the ritual at the local sacrificial stone in our village, never to lose, betray or sell ourselves (i.e. each of us personally, but also as a couple). Despite having children, we are still a couple who met and fell in love almost 20 years ago. Even our son, our great love, is not the person who should strip us naked down to our shirts as a couple or as individuals. And that applies to financial matters as well as time for us personally (as a couple or individually), our interests or hobbies. Everything has its time and its place. Why should we handle financial matters any differently? It's reflected in the fact that we both secure our financial future independently of each other (but also together in the form of real estate), we have separate (and joint) accounts... It's not about "what if we split up", but about "each for ourselves, with the will to have it easier together later". Precisely because my wife and I also have experience in the financial sector, but also from our own experience and life before our careers in financial matters, we know how important it can be to get a jump start on an independent life. And this is exactly where we come in. We give our son a helping hand to get started. But we are also not gods who bring wealth to earth. We want our son to have a small advantage in his own life. We are prepared to give him this. But we certainly won't win the race for his place in the sun on our own. We want the sun to shine for us too. We have made a lot possible for him in his 3.5 years so far and there will be a lot more to come. Things that are still unimaginable and expensive for us today... it's pointless to list them all today. In addition to all the time (and no, I'm not complaining about the time with our son, but every parent in the world knows that I'm right) and all the capital that goes into raising and releasing the child into independence, why in the name of Satan should we also finance the lock for our son?
No. Our child, just like your daughter, is learning to experience life, to make his own experiences, to trust that mom and dad are always there for him, that there are more important things in life than money, but that money is also part of it. Our monthly savings rate started at €30. Since then, it has risen by 4% every year and will continue to rise in percentage terms for the next 14 years, fed by special deposits and continued as a bet between mom and dad in the 2 deposit option. And yes... the same applies here: we are having fun and no one in the world is going to deny us this because of the "I'm going to go all in with the child benefit" mentality. Remember: If you act like this, you should always ask yourself whether child benefit is still morally justifiable for you. And no, we are not low earners either, but the child benefit is eaten up by the childcare place alone. So I "give a finger" to some people who think that: That's on top. Should work out easily for everyone... sure, Mr. Golden Spoon his butt! Thanks for the foresight...

So dear donkey... enough philosophizing. You see, you're doing it just right. In your own way. And that corresponds to your own reality, which nobody else can judge.

And @CryptoPfand is a really nice guy. 😅

When will we meet again, dear donkey?

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Pope Donkey XXI@DonkeyInvestor

1Yr

@InvestmentPapa Very nice words. From the wisdom, one could easily think that @DerMartin is your wife. But somehow the stories don't fit together 🤔🧐

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Erwin@Finanzhai_1904

1Yr

First of all, congratulations on the birth of your daughter 🙂. My wife and I also had a baby at the beginning of the year and I opened a junior custody account straight away 🙂. As my wife is just like yours, we have the same compromise with similar savings amounts. It was important to me to do something and so the compromise is fine.

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Pope Donkey XXI@DonkeyInvestor

1Yr

@Finanzhai_1904 Congratulations too 🙌

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Dividende > Zinsen@GoDividend

1Yr

Similar view of things as you. Therefore, a separate custody account for all 3 with a similar savings rate

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Brother L.@Brateeee

1Yr

We are doing a very similar thing for our daughter.
At the time, I would have been happy to have had similar start-up capital or even more financial knowledge to pass on to me.
Apart from that, you don't have to justify yourself to others, you have to go your own, best way.
I believe that anyone who makes even the smallest amount of money and contribution to providing for their children financially is doing a good job. Keep up the good work!

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Matt@MWS

1Yr

I think your considerations and your compromise with 2 depots are very good!

Nice support without overdoing it :)

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AktienAmateur069@AktienAmateur069

1Yr

First of all, congratulations to you and your wife on bringing a healthy daughter into the world habt🙏🏼

Although I'm still quite young and my girlfriend and I won't be having children for a few years yet, we've already thought about how we want to invest money for our child.
We are aiming to set aside as much money as possible each month for our future child/children for the following reasons:
A sensible approach and a healthy relationship with money is extremely important, I wouldn't disagree with you at all, but this can be instilled in the child during childhood. The handling of/relationship with money develops more in the first 18 years than afterwards. You should make sure that you teach your child that money doesn't grow on trees, but has to be earned first. The aim should be for the child to have already done small jobs at school by their 18th birthday, to handle pocket money responsibly, to keep consumption within limits and to have learned from me the most basic knowledge of how to make money saved on the stock market work for them.

When it is revealed to the child on their 18th birthday that a large amount of money has been invested regularly since birth and that they will now receive a gift of around €50,000, they will be able to understand what this actually means, what opportunities it brings with it and they won't just splash this money on their head, but use it as incredibly valuable starting capital to build up their own wealth.
The opportunities offered by a high starting capital are enormous, and I don't think there's any need for a sample interest calculation.
However, the way in which a child deals with this enormous good fortune of having a great starting capital at a young age is determined by their upbringing.
And with someone like you, who approaches this topic in such a reflective and differentiated way, I'm not worried that you won't succeed :)

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Ella Marie Waschbär@DividendenWaschbaer

1Yr

I like your attitude.
But it's clear from the text that you're getting old. Well, maybe you'll be a bit more sensible then.

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Kevin E.@KevinE

1Yr

I think that's a reasonable amount. Enough to make it easier to start adult life (training/studies), but not enough to rest on.

Personally, I had my deposit when I was 18, but I had no idea it existed. My parents simply didn't tell me about it 😅 otherwise it might have been an option to make the whole thing more tax-friendly. Then I really "got" it at 26 when I completed my training and studies

But my portfolio was a) smaller than the 27k and I simply didn't need it. I didn't question the dividends that came once a year 😃
But I think it helped my motivation to work that I didn't have a big cushion in the back of my mind. Although I already knew that my parents would have helped me out in an emergency.

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Kevin E.@KevinE

1Yr

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Morizon72@Morizon72

1Yr

I think it's great that you're doing something at all. I didn't get a deposit from my parents (which I didn't expect and I think is bad). A small deposit of around € 20000 at the age of 18 is great. On the one hand as a retirement provision or, for example, to build your own home, but also to get a good feel for finances and what is possible with "little money".

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Show answer

Wojtek@Wojtek

1Yr

I would delete the post in a few years, so that your daughter doesn't find out about the second depot. Otherwise I think your attitude is to give her the knowledge in the very first line instead of the material TOP!

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erT@erT

1Yr

I find your attitude very healthy and have a similar approach. My 3 children (2, 4, 6) have had their own savings account since they were born, into which we each pay €25 a month. I don't see saving as my obligation, it's more like the icing on the cake. I see it more as my job to look after them and to be able to help out in emergencies later on.
We also put money aside that we can use to pay for all kinds of expenses for the children out of the ordinary, be it school trips, a new bike, special excursions or similar.

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Leonard@Osiriz

1Yr

I had the equivalent of 3000 euros in a savings account after inflation at the time. That was quite nice. 👍 I haven't inherited anything yet either (luckily). I think it's okay. On the other hand, a friend of mine received a large inheritance from his wealthy parents in his late 20s and put it towards a home of his own. The parents' reasoning was that it wouldn't do him any good to inherit when he was 60. I can understand their point of view. But the parents are also very wealthy, so even after the early inheritance there's enough left over for old age and it wasn't immediately at 18 when you might buy crap with it.

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six@six

1Yr

I am in the following situation:

I only started investing myself in 2021.
I have 2 children (born in 2012 and 2019).
Child 1 is from 1st marriage.

As a result, a custody account was opened in the child's name for child 1 (as I didn't want my ex to be able to access the custody account).
So I opened a custody account in my name and did the same for child 2.

But now I wanted to make sure that I had paid in the same amount when they were both 18.
So I made a higher one-off payment for child 1.
I'm currently saving €75 for child 1 and €50 for child 2.
I would actually like to increase the installments a little, but then I would have to make a much higher one-off payment for child 1 so that it would be fair again in the end.

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T N@Aktiente

1Yr

I invest about 2500€ per year for the young man. The declared aim is to provide him with a basis for a life in which he can be independent. I see a future that will not be determined by a shortage of skilled workers, but by a surplus. In this future, I would like him to be able to follow his destiny rather than money, because hopefully there will be enough money.

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