While time travel is still a few years off, you can give your kids the head start you wish you’d had. Now that you're getting the hang of investing, you can use what you've learned to benefit your little ones.
Investing in your children is a great way to prepare them financially for adulthood. Whether it's for their first car, gap year, or help with a home deposit, saving a little bit of money each week or month adds up, especially when you can invest it.
Regular savings contributions are a great idea; if you saved $20 a week for 18 years, you'll have saved over $18k by the time they’ve finished high school!
Great right!? Yeah…but nah…
If you’d invested that same $20 per week, earning 5% interest per year, after 18 years you’d have almost $30k…. Magic right? The magic of compound interest - try THIS calculator to see the difference putting your money to work can make.
Kiwisaver may be one of the first investment steps to think about. By the end of March 2019, little over 10,000 New Zealanders aged 17 and younger have joined KiwiSaver. For young individuals who are lucky enough to be able to utilise their KiwiSaver account to purchase their first property, it may be a terrific head start. But it will not be the case for everyone.
According to research over half of Kiwis aged 18-34 do not expect to own their own house by the time they retire, and just 30% believe they will have NZ Super at retirement. Even if your children can utilise their KiwiSaver to purchase a home, it will most likely be their last option to withdraw funds until they reach the age of 65. This is why having savings set aside for your children can be a fantastic way to set them up for adulthood.
There are several ways to invest for your children’s future, but we should first determine how long you plan to dedicate to this investment. How you chose to invest will vary drastically based on how much time you have and how much risk you can tolerate. Let’s say your child is 13 years old, the approach will be significantly different from what it could be if you are preparing for a baby.
To make an informed investment decision, you must also consider the planned use of the funds. Is it for their first car? Their wedding? School costs? To begin with, making an account under your child’s name and setting aside a portion of your money is an excellent strategy to assist them financially. As with any investment, there are some general principles to follow to attain these objectives: begin as soon as possible, contribute regularly, and adhere to your investment strategy despite the market's inevitable ups and downs.
Here at Goldie, starting investing for your children's future is super easy with no extra costs.
Kids' vaults are an easy way to start building a nest egg for your little ones. They are held and accessed from your account allowing you to save on their behalf! There is no need to set up an additional account or verify for a kid's vault, you are the owner of the investment until you decide to pass it over to the recipient. Get your kid's account ready to go today!
It's important to note the user must be at least 18 years old and complete the Goldie onboarding and verification before we can open their own account.
