Long story short - My wife and I had a little boy very recently.
I have just setup at Junior S&S ISA direct with Vanguard and went for LifeStrategy 100% Equities. We will be using the £80 child benefit money and £20 of our own to start him off each month.
Should we also start saving some money in cash for him? Or do you think all in the stock market?
Long term plan is to build it up more aggresively over time to cover things like University, Wedding & House deposit.
Edited to say: Congratulations!! Was so excited about the maths that I forgot to congratulate you on the new arrival.
I wouldn't want to save any as cash at this moment in time. Thinking on the time horizons, you could be looking at the following for life events (based on my millennial mates):
- University - 18 (19 if a gap year is fancied)
- House - 25 - I'm making a specific downward modification here to allow for deposit being in place, but the earning multiple would still be needed for a mortgage
- Wedding - 30?
Based on this I would want to keep 100% in equities at least until 14/15 years old, then start to project what is required for each life stage. You are potentially looking at a drawdown in 3 stages over a 12 year period, so factor in that you presumably want the growth for the house deposit (c. 7 years out) and wedding (c. 12 years out) when you start paying for university fees.
I'd personally want the balance for these future events in equities until 2-3 years out, but depends on your risk tolerance, which given the relative importance of these life events might be slightly lower.
I definitely wouldn't provision any as cash yet and suggest that is left for at least 12-15 years.