My kids often get quite thick hong bao from grandparents and me and my wife plan to add a few extra for their college. Saving money in bank account seems very bad idea. Where do you invest your children money? Can you suggest any fond? Medium or low risk but with interest rate higher than 3%
when are they going to go to university ? is it a 15 year horizon or 2 years ?
If its long term, you can consider a stock ETF like vti or voo, if short term you might want to consider an ETF like bndx.
these are vanguard ETFs which invest in stocks or bonds.
you can split the money between the 2 options and balance every year based on your needs.
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Which currency are you looking to invest in? (Are you ok with transferring the money back to your home country, or does it have to stay in Taiwan?)
Also, what country will your kids likely go to college?
It’s long term, kids are 1 and 3 years old. Thanks for recommendations. I suppose for this strategy I need to open account with some online broker.
I’m from Europe and I can’t say for sure but probably kids would like to go study over there since they have European Union passport. So far I didn’t find an easy way to transfer money outside of Taiwan. 10 years ago I saved my money in local bank fond because I trusted them on short term. Now I don’t know anything about Taiwan banks…
American? Get a 529.
My bad. I see you’re not.
https://contrarianoutlook.com/
I’ve been a consumer of this guy’s investment newsletter for over two years. 95% of his recommendations are solid. Made good money on HEAVY dividends…like 7-10%.
Imagine that for 15 years.
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If you want to keep it in Taiwan, check out http://taiwanrate.com/
If you want to transfer it back to your home country (which it sounds like you may end up doing anyways when the kids go to college), check out https://global.vanguard.com/portal/site/home
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Get an advisor you can trust, take a risk that you feel comfortable with, and don’t only invest the hong bao, but a percentage out of your salary. Do it automatically (biweekly or monthly). If you invest for the long term (which you are doing), the automatic payments decrease risk. Because this is for the long term and not a specific expense, it also allows you to hold on if the times are bad and only divest when it makes sense given the market.
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I’m OK with that except the last line. Universities and Colleges do not care what the market is doing when bills are paid. I wish I could pay off my kid’s next 2.5 years. We are crazy ahead now, GBT. Usually, one pays it out when the bi-yearly tuition bills come due in September and February. So, “when it makes sense” is relative. Also, for this kind of long term passive investing, I don’t think one needs an advisor complicating it with weird things you won’t fully understand. Cheap Index fund. Cover the whole market. Keep investing regularly.
Bada bing
For college the interest rates on loans are usually far lower than the ROI on what your money is doing in the market. So in a down market, pay off the minimum. In any other market, do the calculation of whether it makes more sense to pay it off or to continue to allow the money to grow. I generally make the financially unwise decision to pay off debt even when my investments are doing better because I hate debt.
Yeah, you’re losing me and I don’t know which country/ies you’re referring to. That is certainly not true for the US:
https://www.nerdwallet.com/blog/loans/student-loans/student-loan-interest-rates/
Current student loan interest rates
Refinance student loans
Fixed 3.14% to 9.49%
Variable 2.01% to 9.24%
Private student loans
Fixed 4.02% to 12.94%
Variable 3.08% to 12.62%
Federal student loans (fixed)
Undergraduate 4.53%
Graduate 7.08%
PLUS 7.08%
You’re proving my point. What do you think average market ROI is?