Carrying on with one own's activity and then giving to the child is obviously going to happen anyway in the end, and also, i know that insurance companies have this invest for a child plan etc and there are various mutual funds one could invest in.
I dont like mutual funds because i rather make my own mistakes rather than pay fund managers to make sometimes worse mistakes. Child plans by HDFC etc are already invested in... Bank Fds exist, so no point going into further debt funds.. as corpus of money is not that large.
My grandfather bought my mom , some odd shares long long ago, stuff like OCL, dalmia cement, ballarpur and some more... I cannot tell you the benefits my mom has had due to these shares and all my grandad did was invest into the IPOs at the time, at rs.10 per share etc.
Further, when i say, portfolio will be neglected for 20 years, i dont mean, that I will hide it somewhere.. I am always there to watch and possible re-adjust it if a desperate need should present it self, all i mean is, that its best to buy safer stocks of good companies in the first place, so one does not need to have to worry, and the child is happy when he/she is handed over the portfolio many years from now.
Investing like one always does is all very nice, but i find it a good strategy to divert funds every now and then, into child's account, slowly but surely, so that by the time child is grown up, you dont have to worry and the child is rich on their own... and this also holds meaning, because if all funds are in your accounts, you can continue using it for your self, buying stocks, taking risks, probabaly buy an audi or something.
I see slow and systematic addition to childrens accounts over the years as a very prudent thing, and i am convinced, that a child's portfolio should be started earlier.. even if its very small... for example, i was thinking of dividing NIFTY 50 stocks into rs.5 Lakhs and buying rs.10000.00 worth of each to start with.
Problem with above is, that dividend cheques of small amounts would be a pain.
best wishes,
samir.
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