Investing with your child can help them build a nest egg and improve their financial literacy.
Gifting your child with a nest egg of investments is a wonderful idea, and will no doubt give them a kick-start into adulthood.
But some experts say we may be approaching this incorrectly; we could be investing with our children, rather than for them, to give them not just money but knowledge.
Orsolya Bartalis, 39, from Perth does just this with her oldest child, Jordan. “I take 35 per cent of my 15-year-old’s wage [from his part-time job], and we sit down and look at possible investments together,” she says.
“We look at what we’re getting, how secure it is, what the returns are and how long we have to invest the money for. He can then ask questions and we decide whether we invest or not; it’s often property investments.”
Investing in property is something that Cherie Barber, founder of Renovating For Profit is passionate about teaching young people. In her Young Renovators Scholarship Program, she teaches kids aged 12 to 18 about investing in and renovating homes.
“We’re seeing an increasing number of young people getting interested in property,” she says.
“Children are watching renovating shows on TV, like The Living Room and The Block, and all these young people are getting inspired by and curious about property.”
Barber says her views on involving kids in the world of property can be controversial.
“There are plenty of people saying that kids shouldn’t be into property; they should be out kicking a football or playing their Xbox, but I don’t think that’s necessarily true. That’s up to each individual child.”
“Kids are thinking about the future, and the sooner that parents can start educating their children about what to buy, where to buy and how to identify really good capital growth suburbs, the better.”
Investing together: a parent’s responsibility
Make no mistake: financial literacy, from budgeting to investing, is the responsibility of parents.
Orsolya Bartalis says she aims to teach financial literacy to her kids.
“Kids receive [almost] no financial literacy in the education system, so that responsibility falls back on parents and the individual child to learn it of their own accord,” Barber says.
With a future filled with housing affordability problems and self-funded retirement, there’s nothing more certain than the fact that the next generation need to learn how to be very smart with their money.
And, while it feels like a big step for our generation of parents, many of whom experienced money as a taboo topic, it’s worth forging the way for our children. Bartalis says, “The main message I am working on instilling in my kids is to learn to be financially literate, so they can have a choice as to what they want to do in life.”
Source: AMP News & Insights
August 27, 2018
August 27, 2018
August 27, 2018
Subscribe to the Baggetta newsletter to stay updated with regular industry and company news.
For more information about the services we provide, or to find out if you are eligible for a free no-obligation consultation, call us now on 9317 7300.
The information provided on this website, including the material and contents provided in the website publications, are informative in nature only and you should not act specifically on the basis of this information alone. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice. If expert assistance is required, professional advice should be obtained. Liability limited by a scheme approved under Professional Standards Legislation
Paul Baggetta is the Founder & Principal of Baggetta & Co (ABN 68 786 233 813).
Paul Baggetta has been a Taxation Accountant since 1981, a Financial Planner since 1998, and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading) and operated his own Real Estate business for property investment clients for over 5 years as a second business.
Financial planning services are provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.
Taxation & Accounting services are provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, FIPA & NTAA.