Make your child rich - for free!
We like free things here at Bitterwallet. We also like money. So free money would definitely be A Good Thing in our book. We also know that children can be expensive little blighters, so using free money to (financially) wash your hands of the money-grabbing monsters seems like a really good idea.
Of course, the crux of this plan is the free child benefit paid to the carer of every child in the UK. Currently. Plans are afoot to make the benefit means tested, such that higher rate taxpayers receive a reduced amount, or even none at all, but the detail of such plans is still a work-in-progress. However, for those unlucky enough to work for BitterWallet (and therefore have no chance of being a higher rate taxpayer) or similar, you will still get your £20.30* a week for having a child.
So how do you make your child a millionaire? The answer is compound interest.
If you invest £20.30 a week (which is normally paid 4 weekly, so we’ll assume a monthly amount of £87.97) instead of spending it on beer and fags food and nappies, the magic of compound interest means that, if your rate of return for 18 years is:
- 3% (even achievable now, when rates are low), your child will have over £25,000 at 18
- 6%, your child will have over £34,000 , or
- 10% your child will have a massive £52,831 at age 18.
OK, so they might not be a millionaire, but I wouldn’t have turned my nose up at £25,000 for my 18th. Particularly £25,000 that hadn’t cost my parents anything. Of course, nowadays, children will have to spend £27,000 on University fees for three years...
*actually you only get £20.30 for the first child, second and subsequent children are only worth £13.40 each. Looking at some of you, it’s probably best you stop at one though, don’t you think?