Saving for your child: The mistake SwissBorg helps you avoid

Opening a savings account in their child's name is a reflex for many parents. It seems prudent, simple, and reassuring. The money will indeed be there on the day they need it. But this observation, as comforting as it may be, masks a far more disturbing question: what will that sum actually be worth when they reach adulthood? Because putting money aside is not the same as putting it to work. And over such a long horizon, this nuance changes everything. This is where SwissBorg comes in with a tailor-made formula. Let us explain!

The difference between amount and value

A savings account displays a number. This figure does not drop and can even increase slightly over time. It is reassuring. But everything else increases too! Rent, education, transport, food—everything costs more.

The same amount therefore ends up buying less. Let's take an example with 10,000 euros:

• If prices increase by 2% per year (the European Central Bank's target), it will take about 14,000 euros in eighteen years to buy what 10,000 euros buys today.
  
• At 3%, the required sum exceeds 17,000 euros.

With a Livret A paying 1.5%, you will have accumulated barely more than 3,000 euros in interest. By the time your children collect their money, they will have lost purchasing power! This is a real, annual, silent loss. No statement displays it. No advisor highlights it. Yet, it exists.

Bad risk and good risk

For most parents, the idea is not to take risks with the money intended for their children. They therefore opt for a strategy that avoids market volatility.

But while this reflex is healthy for an investment horizon of 2 or 3 years, everything changes for an 18-year period. Indeed, over such a duration, volatility often becomes a minor episode. What remains, however, is inflation. It does not correct itself. It does not recover. It stacks up.

The real risk, over a long horizon, is therefore not experiencing a temporary drop. It is never being exposed to anything other than an account that loses purchasing power. The apparent security of the savings account is a short-term security. Over the span of a childhood, it becomes a programmed loss.

The cost of waiting

While some parents take action as soon as their child is born, many tell themselves they will deal with it later. When the child is older. When they have more money. When the situation is more stable.

But unfortunately, lost time cannot be caught up. The early years are precisely the most precious, because they allow the most time for compound growth. Starting small but starting early is often better than waiting to start big. Let's return to our example of 10,000 euros:

• Take a parent who sets aside 50 euros per month from birth into a product at 2%. After 18 years, they will have put 10,800 euros aside for their child and obtained about 2,187 euros in interest.
  
• On the other hand, another parent waits until they have accumulated 10,800 euros to invest them in the same product. If they invest them after the child is 8 years and 9 months old, the latter will inevitably have lost money compared to the one who deposited bit by bit.

The investment horizon for a child is an advantage that few adults can afford. Wasting it by leaving money in a dormant account is a mistake that is difficult to fix.

Building rather than storing: the SwissBorg Kids Bundle

Saving is not storing. Saving is allocating resources to a goal. For a child, the goal is distant. The approach must therefore be forward-looking as well. SwissBorg has designed a formula for this specific case: the Kids Bundle. A ready-to-use portfolio, with several complementary building blocks that each play a very specific role. Two versions are available depending on where you are located:

For Swiss residents:

• A base in Swiss franc for stability (33%);
• Gold for protection (34%);
• Bitcoin for long-term growth potential (33%).

For EEA residents:

• Swiss franc for stability (50%);
• Bitcoin for protection (30%);
• Ether (10%) and Solana (10%) for long-term growth potential.

The entire portfolio is automatically rebalanced every quarter to maintain the desired proportions. Nothing exciting. Nothing spectacular. But a method that stands strong for twenty years with the possibility of setting up automatic deposits to turn intention into habit.

To give you an idea of the product's potential (even if the past is not a reliable indicator of future results), here is what it would have looked like for a parent contributing 100 euros per month from August 2021 to July 2026 (for a total of 6,000 euros):

With the Kids Bundle, there are no purchase fees and no selling fees. And if you change your mind, you can sell at any time with no lock-up period.

Your move

The entry ticket is set at 50 euros. A modest, almost symbolic amount that contrasts with the scale of what it can represent over eighteen years. Because the ritual of doing something for your child in the first weeks of their life deserves better than an account that yields less than inflation. The real question is not whether the money will be there in eighteen years. It will be. The real question is what it will still be able to buy.

If you don't know SwissBorg yet, you can discover the platform by reading this article. It is in full compliance with MiCA regulations and constantly expands its products and services. For example, it has just integrated the Robinhood blockchain into its Meta-Exchange, an additional asset for those wishing to diversify their child's portfolio, or their own.

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