We’ve all heard the stories of parents buying their newborn a property or putting money into shares. But setting up your kids’ future is something that most parents will think about almost from the time they arrive.
So what is the best way to invest for your children – bonds, term deposits, shares, property or super?
Perhaps surprisingly, one of the more important things to look out for isn’t the capital gain, though this is a consideration. High-interest savings accounts If you have a small amount to invest, a high-interest bank account could be the way to go. Not only are they relatively simple to set up and administer.
Investment bonds Sometimes called insurance bonds, investment bonds are a good option for larger amounts of money. A lot like superannuation, the fund that holds the investment pays tax at a rate of 30 per cent meaning you don’t need to include any earnings in your taxable income.
Shares Putting some money in shares can also be a profitable option for long-term investments. Investing in your children’s future is a wonderful idea, and by starting early you’re not only taking advantage of enforced savings, you can also use it to increase your child’s financial literacy.
However, the most important thing is to approach the investment with as much information as possible and to ensure you get trustworthy and tailored advice.
Partners In Planning are privately owned, Financial Planner Melbourne, not tied to any financial institution, do not accept investment or superannuation commissions, and always put your interests first.
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We have office in Cheltenham /Mornington/Brunswick and Geelong
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this publication as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information.
Assess your financial position To prepare for retirement, the first thing to do is to work out how much money you have now, how much you might have in the future and where it will come from.
Bring this information together by finding out:what assets (houses, savings, investments) you have and how much they are worthhow much super you have and when you can access itwhether you are likely to be eligible for the Age Pension and when you can apply for it.
Make a long-term financial planThe next step is to think about how your needs might change over time.
For instance, in the first few years of retirement, you might want to travel or take up a new hobby.
Later, you may want to replace your car or renovate your kitchen.
Further down the track, you may want to move into a retirement village.Think about how you can use your different income sources to fund the different stages of your life.
