Should you be investing for your children now?
From the day I was born, my Dad had an account he paid into every month on my behalf which he called the baby account. He was an accountant after all.
Why? To pay for university.
You may however, want to give your children a lump sum to go towards their first home purchase?
I think of the story of the race between the hare and the tortoise. The hare started off strong but then stopped for a nap, while the tortoise plodded along slowly but reliably and won the race. Meanwhile the hare woke up and sprinted to the finish line, but he had been beaten.
The concept of a long term systematic approach to investing is smart, as is taking advantage of compounding returns over time.
Investment bonds can be an attractive solution to facilitate long term investing for many reasons. The potential benefits being structures that are separate to and held on behalf of children until a future date in time or age perhaps, the added security of ownerships and the zeroing of capital gains if held over 10 years before redemption. The investment selections within the bonds are also ever increasing. With an investment bond the returns won’t form part of your taxable income which is attractive to those on high marginal tax rates. There are taxes and fees paid within the investment bond which you would expect.
If this is something you have been considering, then reach out to me to discuss the benefits, costs and risks and other important information and the appropriateness of this strategy. I am sure your children or grandchildren won’t be upset about you doing this.
Just think what they may have in the future if you start paying monthly into an investment bond today.
General Advice Warning: The information in this post has been prepared for general information purposes only and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this post, consult a professional financial advisor like myself to consider whether it is suitable and appropriate for you and your personal needs and circumstances