On the quiet news days of the Christmas holidays, my eyes hit me A story about Miehikkäkä on Yle’s websitewhich costs 10,000 euros for each child born in the municipality.
Even the world-famous baby money has been paid for a few years now, and there is a baby boom in the village. The mayor of Miehikkälä has reason to smile with satisfaction. And maybe there is a reason to smile elsewhere in Finland as well. According to Yle’s story, more than 50 of Finland’s approximately 300 municipalities paid some kind of baby support in 2020.
Families with men are sure to find all sorts of nice uses for their tens of babies here and now. But since investing is always the first thing that comes to mind for me, I really started to think about what if I invested that money. What effect would it have on a child’s life?
The man does not stuff ten tons into the baby’s armpit at the maternity hospital, but pays one tonne of baby money a year for ten years. In the calculation, I divided that ton for another 12 months. The monthly installment was 83.34 euros, ie the child allowance for the first child under just over ten.
At the age of eleven, the child would be quite Kroisos compared to his ordinary Finnish peers. He would have a pot of about 15,000 euros on the stock exchange with an average return. At this stage, however, the share of revenue is still small, only 5,000 euros.
Imagine a family being able to get over a child from pony or ATV fever and the money is invested for the future.
The first stage where money can be used productively comes in the study phase, where savings can speed up studies and bring the start of a career and earning money forward. But realistically, the young person takes the time to flirt and find their own path. However, investments are not affected.
Then, at the age of 25, the young person is ready to settle down a bit and buy their first apartment, a studio from the study place. As time has passed, the pot has grown to more than 40,000 euros, which allows you to comfortably catch an apartment in Helsinki as well. At that point, the young person is overcoming the huge barrier to prosperity caused by rising house prices in the capital.
But damn it in Helsinki, when numerous jobs can be done remotely. In a few years, the young man will put his townhouse up for sale and buy a detached house with his wife, another man who has invested his baby money, from somewhere other than Miehikkälä. They no longer need to borrow at all. Compared to their peers, the life of a young family is again very financially open, when you only have to pay for housing.
So the couple has an extra amount of money left over from the loan repayment. They spend part of that life enjoying it, and invest the rest in an ordinary equity fund, say, even € 200 per spouse. At the age of sixty, they would have a total investment of 500,000 euros. That’s so much so that if they want, they can retire early or partially before the 60th anniversary.
Making such calculations is enlightening to me, as they underline the benefits of long-term investment.
Of course, math can vary depending on your situation and place of residence. Relevant calculations for yourself or your children can be made using the investment calculators available online.
In this case, men can get to their peers more easily at the turn of their lives without crossing the stick themselves. Tens of tonnes of baby money will grow into a home and retirement savings.