To ask for help with financial pickle

[ShoebillStork]

In 2009 FIL had a win on the Premium Bonds. He gave us £10,000 to invest for DS (at low risk) and the money to be given to DS when he's 18.

I put the money towards a loft conversion. DS is 18 soon and I'm due to remortgage for a better rate. How much do I need to release for him so he gets the £10k plus what it might have gained in interest since 2009.

And should I encourage DS to get a Help to Buy ISA with it?

@MissSmith80

I've just read this entire thread and it's hilarious. But I have decided that I might sue my parents. On the night I passed my A-levels (and therefore confirmed my place at uni), she informed me that she had been 'stealing' (according to some MN definitions) some of my birthday/Christmas money from relatives and it now had reached a healthy sum so I could buy a car for uni or whatever I chose to do with it. Shameful woman my Mum. Or, as I chose to believe, bloody amazing woman, gave her a huge hug and cried tears of joy. And yes, they had had 2 extensions on our family home, so it's conceivable that my pocket money funded some of it 😂😂

This is ridiculously unrelated. There is no comparison whatsoever. I am investing my DC’s money and I have a full paper trail and intend to share this, close to two decade worth of calculation with them when the time comes. It’s only fair.

So, you invested it in your house, but instead of paying him the correct amount from his investment you instead want to give him what it would be worth if you had put it in an isa? Because you dont want to give him what he is actually owed. He invested in a house, pay him what he earned by investing in a house. Cheating your kid out of his own money is pretty low.

[quote Bard6817]@saltinesandcoffeecups I wouldnt invest in bitcoin, too risky for me.

As for returns, we could discuss that for weeks, but giving the lad barely more than inflation, is a rip off.

Happy to talk to anyone off post if they want to, dig further. PM me or create a post about investments and tag me.[/quote]
Oh for sure Bitcoin and the like is risky… too much for me too unless I had some money I wouldn’t miss if I lost. I consider that type of investment on par with gambling.

That was exactly my point though. A lot of talk about high rates of returns for the low risk investment the FIL directed. Those two things aren’t compatible.

The FIL, specified a low risk investment, which at most would come with a 5-6% return. That is being very generous. You can’t say “this one fund had a 100% return so that’s what the OP should calculate from”.

Exactly.

And this is exactly what OP asked for at the beginning.

@saltinesandcoffeecups

Look up Dave Ramsey on youtube. kind of like ML except in Usa. His ‘bankers’ are 12% pa return on average

Double digit returns are not high risk and not difficult to achieve.

[quote saltinesandcoffeecups]@Wheretobuy

Not really the OP could have taken the cash and lined her mattress which is the ultimate low risk investment. Therefore the rate of return is a moot point. The son was too young to manage it and the FIL abdicated responsibility by giving it to the OP to manage.

The OP has the means to acquire the initial $10k and that is the important bit. Now she just needs to figure out what % she wants to apply.[/quote]
Except that she has to keep it from FIL. I don’t buy the secrecy. Also, FIL will expect the low risk investment to return whatever profits it earned! So will her DS. FIL is potentially also expecting DS to thank him and show him respect by sharing detailed plans of how his investment is going to work for DS and that is the discussion that is bound to go wrong for OP.

@Wheretobuy Sheesh i hadn’t even thought about that.

“Thanks Gramps for my £13k….”.

Gramps: “WTF!”

If the 10k paid for a third of the loft conversion then give him a third of the profit made from having a loft conversion.
Stop being a tight arse giving 14k instead of 14250 or whatever someone mentioned makes you sound really grabby.
If your house has gone up so much and you’ve been so clever keeping your child benefit then stop being tight with your DS.

FIL: DS, I instructed DIL to do a low-risk investment on your behalf. She massively exceeded my expectations by investing in property which makes me very happy for you. I am sure that you are about to use this investment wisely. What are your plans? Can I help in some way?

DS: Errrrr……..

[quote Bard6817]@saltinesandcoffeecups

Look up Dave Ramsey on youtube. kind of like ML except in Usa. His ‘bankers’ are 12% pa return on average

Double digit returns are not high risk and not difficult to achieve.[/quote]
I have fundamental issues with Dave Ramsey. Not all of his advice, but some of it. His advice is a good starting point but he’s overly simplistic and should not be used as gospel. Especially his stance on retirement investing.

[quote Bard6817]@Wheretobuy Sheesh i hadn’t even thought about that.

“Thanks Gramps for my £13k….”.

Gramps: “WTF!”[/quote]

That is not how that discussion is gonna go. There is a reason OP wants to keep FIL out of it.

[quote Bard6817]@Wheretobuy Sheesh i hadn’t even thought about that.

“Thanks Gramps for my £13k….”.

Gramps: “WTF!”[/quote]
Please look up the rate of return on a low risk investment.

(Spoiler alert… it’s between 2-3%)

Double digit returns are not high risk and not difficult to achieve.

Bard thanks for the tips ( will be looking ) but it's just not relevant to this. They're about you and your knowledge. And specialism.

When you're looking at the figures you're not thinking about wether you need to get yourself down to IKEA to get some bunk beds for the visiting DSS. Or if they get on . Or how to make it work space wise in the house. OP made the money work for son.

There is so much more to this story than simple black and white numbers on a page.

A paper trail is so missing the point.

Crud typo… that should have been 2-5%

@saltinesandcoffeecups
Except that OP’s son is going to share with FIL exactly how he is planing to use the loft to fund Uni.

I’ll just leave this here for anyone interested

www.thisismoney.co.uk/money/isainvesting/article-9388967/Funds-help-lower-risk-investors-better-returns-cash.html

@whattheefffff

DS benefitted from the investment in the property already.

All our children 'benefit' from anything we may do to improve our homes but most of us don't 'dip into' their piggy banks to make those improvements.

[quote Wheretobuy]@saltinesandcoffeecups
Except that OP’s son is going to share with FIL exactly how he is planing to use the loft to fund Uni.[/quote]
Then the FIL should have either A. Managed it himself or B. Not stipulated low risk.

Can’t have A. No involvement B.Low risk and C. High profits.

Given that you state you chose to invest his money in your property and using his money has increased the value of your property I’m inclined to say that your DS would be entitled to a percentage of the increase in value since that really is the return on his money. Not some crappy interest rates that let’s be honest at times have been seriously low.

@saltinesandcoffeecups

Crud typo… that should have been 2-5%

Yes FIL said it better be low-risk but I have no doubt that, if a low-risk investment returned high profits unexpectedly, anyone on this thread would say ‘hang on dear fund manager, I only asked you to give me 2-5% on my investment. I am glad you did so well with it so the rest of it is your reward got bring smart with my money’.

People are crazy and honestly say how many kids are owed this and that but dive on many mums screaming entitlement. Interest on savings have been rock bottom for the last ten years and even kids savings they are only high for a year and have a maximum pay in.
Give him 12500 and be done. I think you were very wise. Yes, riskier than the FIL intended but it paid off.

2.5% compounded is about the best you could get if in an account, 3% maybe at first but it dropped over the years so £14000 would be sufficient

Going to sit down and read this properly because my dead aunt left DD1, aged 1 £15,000 that we promptly spent on plasterboard and a heating boiler.

Before everyone goes mad my Aunt had form for being manipulative and thoroughly enjoyed her last few months redrafting the will several times. Cousins flew in from Canada, amounts went up and down. I don't think my brother got anything, the married to a millionaire, only been in our lives for four years step niece got a big sum. It would have torn a different family apart and was clearly designed to do that.

Anyway, we've been deducting expenses for years - dirty nappies, washing, cleaning, emotional support, etc I think DD1 owes us by now!

@sunglassesonthetable

Have to disagree, because when i know that the kid has been effectively missed out on somewhere between £10k to £50k based on risk, on top of the original £10k, and if you consider the property an investment, that the entitlement in the increase in the value of the property isn’t being passed on, then for me, it’s just wrong on so many levels.

All our children 'benefit' from anything we may do to improve our homes but most of us don't 'dip into' their piggy banks to make those improvements.

DS specifically benefited. I would feel differently if OP had the new attic conversion for herself.

OP used the money but as part of a plan which involved refunding ( with interest). Like most things it comes down to wether you have the cash or not. Lucky if you do, eh.