2Yr·

Hi Dear GQ Community,

this is my first time writing here and I would like to hear your opinions on savings plans for my son.

I gratefully accept optimizations 😁

Since his birth in June 2017 I have opened a custody account for Him. There their ETF $n/a (-0%) with 50€ saved.

Since September 2022 I have opened a children's account at Ginmon with a savings amount of 150€. Ginmon invests very diversified.

Since December 2022, another 150€ is saved in a children's deposit with Barmenia. These have a savings plan in $n/a (-0.38%)
$WLD (-0.26%)
$LYPS (-0.34%)
$n/a (+0.22%)
$n/a (+0.16%) 30€ each.

My question:

Would it make more sense to open a children's account with a broker to manage the savings plans themselves? If YES which ETF's would you recommend for the savings rate of 350€?

Thank you in advance ☺️

26 Comments

Staatsmann@Staatsmann

2Yr

With all the funds I ask myself: What is the goal behind it? Why just these funds? Personally, I would put the entire sum in a world index and done. No rebalancing necessary and the management fee is only a fraction. For example, $VWCE or $VWRL Alternatively, only the $IWDA. Everything else would be too complicated for me personally for their own child.

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View all 10 further answers

Krynt@Krynt

2Yr

All in $IWDA

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Epi@Epi

2Yr

Unfortunately, I can't see the funds and can't say anything about the costs. Therefore, just in general: When should the son get his hands on the money? In the first case, it is only about 12 years, i.e. a $VWCE would probably be the best compromise between return, security and simplicity. In the second case, one can also be more aggressive and possibly take a $NDAQ. Here, there are more opportunities for higher risk. Here there are more opportunities for higher risk. More ETFs are not needed, since each one is already well diversified.

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Fatih Han P.@FatihHan91

2Yr

@Epi My son will be 6 in May. He should be able to access his money at the age of 18. Is there a broker that offers children's accounts? Unfortunately, I can only find robo-advisors that invest your money themselves.

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Epi@Epi

2Yr

@FatihHan91 Can't you just open a custody account in your name at TR or SC and transfer it in 12 years? Otherwise, there's not quite enough time to invest aggressively. So $VWCE.

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Fatih Han P.@FatihHan91

2Yr

@Epi I think that the transfer is such a tax gray area. Saving directly into a child's custody account has many more tax advantages. That's what I've been told 🤷‍♂️😁

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Epi@Epi

2Yr

@FatihHan91 Okay, I'm not sure about that. But just put it in your name and give your son power of attorney at some point, that would work too, right?

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Fatih Han P.@FatihHan91

2Yr

@Epi Would theoretically go 🤷‍♂️

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Epi@Epi

2Yr

@FatihHan91 Then you can just go with an established neobroker. TR or SC. They are cheap and flexible.

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Licher@Teufelskerl

2Yr

Neobroker does not yet offer a children's account. Just Google for it. There are a lot. I will open my children's accounts at ING.

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Epi@Epi

2Yr

@Teufelskerl Then the question to you: What is the advantage of a child custody account over the 18+ power of attorney?

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Licher@Teufelskerl

2Yr

@Epi Among other things, it minimizes the risk that you "gamble" with it, since you are only allowed to manage it until the child reaches the age of majority. In the event of financial problems, no third party can access it. In addition, children's custody accounts are usually free of charge or inexpensive and not unimportant could be the point that children from birth have their own annual allowance for investment income and income does not have to be, but can be important.

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Markus@MarkusF

1Yr

@FatihHan91 Of course - after all, the child also has an income tax allowance AND a saver's allowance.

This means that the child can earn significantly more in tax-free returns than you could.
I don't know whether the child tax-free allowance is eliminated from a certain amount - but it's always more economical...

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Ironman@Ironman2022

2Yr

It's great that you're thinking about this. I can only recommend that you keep a great distance from such complicated, ill-conceived and pointlessly expensive financial constructs. Why an active water fund, why a mining fund? The only ones who earn money are insurance companies and fund managers. A single All World ETF e.g. a $VWCE is completely sufficient in this case and the performance is in all probability much better in the long run! No investment advice.

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Fatih Han P.@FatihHan91

2Yr

@Ironman2022 Yes, unfortunately, one becomes smarter only in hindsight. I have also noticed that my choices are far too expensive and in contrast to the costs bring far too little return. Is there a broker which offers Kinderdepot's? I find there unfortunately only Robo-Advisor, which, as you know, invest your money yourself.

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Ironman@Ironman2022

2Yr

Good question, I have no experience myself. Possibly flatex...

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