Investing a grand?

RobDavies

in a weeks time, my eldest lad will be eighteen. 

He doesn't know yet but when he was born, my mum opened a savings account for him and will present him with a thousand quid on his birthday. 

I'm quite keen that he doesn't spunk/smoke/piss away this money and as far as I know, there's nothing significant he wants to buy.   So, where can we invest a grand, that will keep his interest and hopefully earn a few quid?

paulnb57

NS&I Premium Bonds?.....

skunkwerx

Does he drive already? Could be a nice chunk towards learning if not. Kind of an investment in a different way. 

axisus

We did the same. Oldest son is 22 and he doesn't know it exists. If he did he would blow it on booze and entertainment in no time. I'll tell him if he ever needs it.

I like the idea of sticking it in premium bonds, but then it wouldn't feel so great if one of my kids won a stack of money and the other 3 didn't, so I probably wouldn't go there.

Limehouse_Blues

Get him to start saving in an ISA and remind him that if he were literally ‘to make the most’ of the tax free allowance he’d need to save another 19 grand in year one. Once he starts earning and paying a chunk of tax he’ll hopefully perceive the importance of maximising his tax free savings before making investments from whose gains and income a fair chunk of tax will disappear.

siremoon

Putting £1000 in Premium Bonds is not worth it as you'll need a lot more to stand a decent chance of getting a reasonable return unless you are very lucky.

https://www.moneysavingexpert.com/savings/premium-bonds

There are a couple of savings accounts around that give you around 1.3% for instant access and you can get 1.9% if you're prepared to put it away for a year.  These are much better bets than premium bonds for a sum of £1000.

TheBigDipper

If you want him to have the money, be interested in saving for his own future and not spend it now, drop it into a savings account that locks it up for another year but gives a decent rate of interest. 

sev112

This was easy 30 years ago. Completeky opposite now

I went into a few banks etc some months back around ISA time to transfer a chunk of money to somewhere more sensible and find a good deal.

turns out pretty much the best I could get was just keeping it in the bank account is it is in already getting 1.25%

telling kids they can spend a grand on something nice now, or keeping it locked away and not touch it for a year and they can have £1015 in a years time isn’t an easy sell, esp if you add in inflation

sweepy

If he hasn’t got a driving licence, I’d suggest an intensive one week driving course, it’s one hell of an investment

Hattigol

A Peter Blake print. Pretty much guaranteed to increase plus you have the pleasure of looking at it.
Was offered his Stanley Road print 5 years ago at £5k. Couldn't afford it. Going for £12k now....sigh.

stickyfiddle

sev112 said:

This was easy 30 years ago. Completeky opposite now

I went into a few banks etc some months back around ISA time to transfer a chunk of money to somewhere more sensible and find a good deal.

turns out pretty much the best I could get was just keeping it in the bank account is it is in already getting 1.25%

telling kids they can spend a grand on something nice now, or keeping it locked away and not touch it for a year and they can have £1015 in a years time isn’t an easy sell, esp if you add in inflation

With inflation where it is you are literally better off spending it today than you are investing at 2% and buying something in a year.

That's not to say saving isn't a good idea long-term, but it's a difficult argument to make with current rates available.

TheMarlin

sev112 said:

This was easy 30 years ago. Completeky opposite now

I went into a few banks etc some months back around ISA time to transfer a chunk of money to somewhere more sensible and find a good deal.

turns out pretty much the best I could get was just keeping it in the bank account is it is in already getting 1.25%

telling kids they can spend a grand on something nice now, or keeping it locked away and not touch it for a year and they can have £1015 in a years time isn’t an easy sell, esp if you add in inflation

Ageeed. It’s worth less every day.  Buy him an old strat, keep it safe for him. That’ll earn more money than standard bank account. 

iseverynamegone

Shares in Amazon (ok 1 share in Amazon) 

I do plenty of work with the Web Services side and was told to invest in 2009 but ignored them. Mistake. 

Flink_Poyd

Depends on whether you want to invest it or put it in savings. We all know savings rates are awful, you'll be lucky keep up with inflation, investing it means a risk of losing some or all of it. I have an account with Hargreaves Lansdown that I pay £100 a month into for a managed fund. It's basically a stocks and shares ISA. Their app is pretty good so you can see if it's gone up or down each day etc

Chalky

Were any of you ever 18? Locking £1000 up for a year to earn less than £20 quid that won't even cover the price of his beer and curry with his mates won't sound convincing to an 18 year old.

eSully

If you want to put it in savings then why not look into stocks & shares ISA’s. You could invest in funds such as Vanguard life strategy through somewhere like Charles Stanley direct. Again best advice is to read up on these in moneysavingexpert as his articles are quiet accessible. 

Another option is invest in his education. You haven’t mentioned Uni. If he’s not going to uni why not use that 1000£ to get him started on a course in one of the trades he may be interested in! A plumbing or carpentry course for example

Chalky

Micro Focus shares tanked earlier this year but fundamentals and margins are good and they've now got the old UK management team fully back in charge so they might be worth a punt at £13.50 today. I don't know what the cheapest shares ISA is.

p90fool

Limehouse_Blues said:

Get him to start saving in an ISA and remind him that if he were literally ‘to make the most’ of the tax free allowance he’d need to save another 19 grand in year one. Once he starts earning and paying a chunk of tax he’ll hopefully perceive the importance of maximising his tax free savings before making investments from whose gains and income a fair chunk of tax will disappear.

I'm 54, and that sounds boring and pointless even to me. 


I agree with the driving lessons suggestions, every mature adult I know who missed that boat is basically a second class citizen with vastly reduced horizons. 

Get it done, now. 

DiscoStu

Brewdog shares are worth a look. Mine are worth over 10x what I paid for them, and I only bought them a few years ago.

Guitar_Slinger

axisus said:

We did the same. Oldest son is 22 and he doesn't know it exists. If he did he would blow it on booze and entertainment in no time. I'll tell him if he ever needs it.

A driving license will be a good investment, as it will only get harder and more expensive to pass the test in his lifetime.

Otherwise, do like @axisus. ;; I got £200 on my 18th and despite advice, saw it as spending money. After buying some clothes, the remaining £80 was spent going to London on an "adventure".  Turns out I enjoyed it more than 80s Liverpool, so found a job and stayed here.

We've been sticking money away for our 6 year-old  and won't tell him until he needs it. Somebody told me to manage the account yourself, rather than putting it in trust (or something) where the kid gets control of it when turning 18 and usually spunks it all away.

darthed1981

p90fool said:

Limehouse_Blues said:

Get him to start saving in an ISA and remind him that if he were literally ‘to make the most’ of the tax free allowance he’d need to save another 19 grand in year one. Once he starts earning and paying a chunk of tax he’ll hopefully perceive the importance of maximising his tax free savings before making investments from whose gains and income a fair chunk of tax will disappear.

I'm 54, and that sounds boring and pointless even to me. 


I agree with the driving lessons suggestions, every mature adult I know who missed that boat is basically a second class citizen with vastly reduced horizons. 

Get it done, now. 

Massive wisdom - unless you live in London you seriously restrict your horizons if you can't drive a pollution box.