Giving children a financial head start into independence matters to many parents. Here's why a savings plan from quirion is especially well suited to building wealth over the long term, how to set one up, and how relatives or friends can chip in and save along with you.
There are plenty of reasons to build wealth. Some people may have a bigger purchase in mind a few years down the line, or the longer-term goal of a private pension. But one reason in particular drives many parents to build wealth: being able to give their children a financial head start into independence later on.
Whether you're building wealth for yourself or for your children, the most important step is simply to start saving. And then to keep at it. A savings plan helps, because manageable monthly amounts make it easier to get started and ensure consistency. The earlier you start saving, the better. When the returns from an investment are reinvested straight away, they generate returns of their own. This so-called compound interest effect unfolds its power over time.
Here's a worked example, unrelated to any specific investment product, to illustrate the effect: at an assumed return of six percent per year, €150 a month grows to a little over €10,000 after just five years. The returns account for around 14 percent of the final sum. Under otherwise identical conditions and over a savings period of 18 years, the calculation yields a final capital of more than €57,000. The returns make up around 44 percent of that. This shows the momentum of the compound interest effect.
A strategy for long-term goals
The stock markets have shown in the past that returns of around six to seven percent per year can be entirely realistic – over the long term and on average. There is, of course, no guarantee. There is no return without risk. But with staying power and a systematic investment strategy, the risks can be reduced. The key word here is diversification. It smooths out price fluctuations over time. You can see this in the performance of the MSCI World, which contains around 1,500 stocks.
The aim of quirion's investment strategists is to take diversification as far as possible. That's why quirion's global ETF portfolio contains more than 8,000 stocks from all over the world. On top of that, depending on your risk profile, there are bonds from around 3,000 issuers. These can add extra stability to a portfolio. This form of investment is especially well suited to building wealth over the long term.
You can take part via a savings plan from as little as €25 a month. Instead of investing in a simple product-based savings plan, you benefit from the advantages of digital wealth management. That means experienced investment strategists look after your portfolio. Parents can also set up a savings plan like this for their children.
One children's savings plan – many people saving along
When a children's savings plan is opened, the child's legal guardians enter into the contracts on the child's behalf. The contracting party is the child itself. However, the child can only access the accumulated assets once they reach the age of majority. quirion then automatically informs those involved.
If you want to set up a children's savings plan: on our application process we first ask you who you want to invest money for. Then simply click „For my child“ and follow the further questions. When setting up a children's savings plan, you'll need to prove that you have custody. If there are two people with custody, both must agree to the setup.
Once the account and savings plan are set up, friends and relatives can save along too and pay monetary gifts into the children's savings plan by bank transfer. That's because every portfolio has its own clearing account with an IBAN. Anyone who'd like to give the child, grandchild or godchild something to unwrap can also have quirion issue a savings plan certificate. It's easy to fill in and print out.
On top of that, there's currently a special offer for new customers. Until the end of August, they can secure a €100 bonus when they set up a children's savings plan. One more little incentive to take that all-important first step.
