Hello all
My wife and I became first time parents in June, to a little girl. Now we are at that point where we are thinking about putting some money aside for her future – For things like University, or a wedding, or her first house, etc.
I don't know enough about these types of investments to know the advantages of a high interest savings acount, for example, compared to an option such as a managed fund.
What we're hoping to find is a solution that not only tax efficient, but also won't have problems or penalties when we try and give this money to our daughter in the years to come. Also I'm looking for an option that is flexable enough so that we can invest more if we happen to have more children.
Some other points
– We would be looking to invest fairly low amounts of money, initially probably no more than $1,000 PA.
– It doesn't need to be particurarly liquid – We would only be making very few withdraws
– This would be a long term investment. I wouldn't think we would be looking to make any withdraws for at least 10+ years, however 20-30 years would probably be more realisticDoes anyone have any advice or experience for this type of situation? Any feedback would be greatly appreciated.
EDIT: I have only just realised I have posted this on a propery investment board, so I am probably asking in the wrong locaton. Any feedback would still be appreciated however.
Regards
Hi – no expert, so please take this with a grain of salt
But my suggestion is buying gold or foreign currency.10 year tax deferred bonds?
I am not expert in this types of matter. My personal opinion is you can make a bank account for your child and deposit a fixed amount of money monthly there. After few years that would be helpful for your child.
For simple investment with strong returns the stockmarket is hard to beat over the long term. Perhaps a managed fund (group of stocks managed by professional investment managers) or an index fund (eg. ASX 200 can be invested in as a total). Comsec may waive or reduce the standard commissions and/or entry fees on managed funds. Pick a fund or system that reinvests your dividends to maximise the effect of compound growth over time. The ASX site has a great comparison of property vs shares over 20yrs. The bottom line is that both return high averages over the long term (over 10%).
As time goes on and you learn more you may like to add 'leverage' (borrowing some money to add to your own) to increase the size of the long term prize.
Great to see you thinking of your children's future so early.As a Kiwi the best thing you can do is to set up their kiwisaver account with a free $1,000 courtesy of the NZ government. See details here http://www.kiwisaver.govt.nz/new/situation/under-18/
By the time they are 18 it could come close to paying their university fees if invested well.
You can also make further contributions as the parent over time. Under the current rules, there are tax advantages AND they can withdraw from their kiwisaver account to buy their first house.
Thanks for the posts everyone
mattnz, you are right, I am a kiwi, however I live in Australia, and my wife and daughter are both Australian.
Cheers
But my suggestion is buying gold or foreign currency.
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