Guide to the Down Payment for an Apartment at Age 18.
Some gifts last a day, and others last a lifetime.
Candies, a toy, a bicycle, or a trip create memories. But helping your child have their own home when they become an adult can be one of the greatest acts of love and foresight a parent can give.
The Power of Time and Starting Early
You don’t need to wait until you have a lot to start.
With consistency and a bit of planning, time becomes your best ally.
If you invest €100 per month from the birth of your child, with an average annual return of 5% (expected return for a profile 6 of an inbestMe indexed fund portfolio), by age 18 they could have more than €35,000. But considering that 18 years is a long horizon, a parent could even opt to create a portfolio with a profile 10 with an expected 7% return, which would exceed €43,000 (see highlighted figures in the table above).
It’s true that, given current housing prices, this might not be enough.
To be more confident, you could save/invest €150 per month: in that case, the amount could exceed €52,000 or approach €65,000, as highlighted in the table above.
Probably, €100 per month (€1,200 per year) is already a respectable amount. Alternatively, we could consider a longer horizon, assuming it’s very likely our child won’t move out until age 25.
As seen in the table above, by extending the period we could accumulate nearly €60,000 or even more than €81,000.
Any of these amounts could become the down payment for their first apartment.
But we can also give it a more flexible purpose and name the account, for example, “help my child become independent.” The goal doesn’t have to be limited to housing: it could fund studies abroad, a master’s degree, or simply give them the freedom to choose their own path while minimizing debt.
It’s Not About Speculating, But Supporting
The goal is not to market timing.
What really matters is not predicting the moment, but staying in the market long enough for compound interest to work and help our children.
It’s also about staying the course, letting compound interest work year after year, and turning savings into something tangible: security, opportunities, and peace of mind for the future.
Starting early, even with small amounts, is easier than leaving it for later and having to make a bigger effort.
Precisely, inbestMe Kids Accounts are designed to grow at your children’s pace.
They are automated, diversified savings or investment portfolios adapted to their time horizon. You define the goal; we set the strategy to reach it. You can even create more than one with different objectives.
Use the Goal Forecaster
To fine-tune your goal, you can check the tables above to see the expected results for different amounts and returns.
Even better, once you are a client, you can use the goal forecaster available in each portfolio to simulate different scenarios and make them dynamic over time.
In the example, we see a goal of reaching €50,000 by 2038 in the account called “Future” and how the simulator determines that €167 aligns with the goal (see green color with a 67% probability of reaching it).
Sometimes, at the beginning, the plan may appear “off track” (in pink in the image with a probability below 50%). In that case, the goal simulator will offer, by clicking the “Reach Goal” button, different ways to adjust it:
- Make a one-time or extraordinary contribution.
- Set or increase the regular contribution, which you can review each year based on your financial capacity.
- Extend the time horizon, for example, instead of setting it at 18 years, extend it to 25.
Obviously, you can also review and click “change goal,” setting a more relaxed amount according to your financial capacity.
The Value of Teaching by Example
Opening an account in your child’s name is not just a financial investment.
It’s also a way to teach them, through actions, the value of consistency and long-term thinking.
It may not be possible at first, but many children start understanding the value of money around age 5, while others do so later, from 9 or 10.
Teaching them to save, and to give up something today to achieve something tomorrow, is a lesson that can accompany them for life.
In this case, the best legacy will not just be money, but the learning that comes with it.
Start today. Let their future start growing with you.
