The average young Australian aged 18 – 24 years old is $4,500 in debt and we think that needs to change.
With rising house prices in a busy world, securing financial independence is going to be the biggest priority for future generations.
Many families have started to realise that investing isn’t out of reach for regular families and have started setting up small investment funds that have the potential to ensure nothing is out of reach for their children.
Step 1 – Set up small but regular investments for your child
Did you know that if you:
- Started with $500
- Invested $100 a month from their birth through to 18
- At a conservative 6% interest rate
- You’d have $40,000 on their 18th birthday.
Beats being down $4,500 doesn’t it? Try this out yourself on the free calculator
Parents are investing in some of the following things:
- Index Funds – Every month that $100 is automatically split across hundreds of proven companies. You won’t get rich overnight but is seen as a safe way to invest over a long period of time with good returns.
- Individual Shares – Buying what shares they know (such as CBA or Telstra). Whilst a bit riskier than index funds due to not being spread out and diversified, many parents like to invest in what they know
- Managed Funds – Using a service like Fledged to make it easy and hands off if you aren’t sure of where to start and what exactly to invest in.
Step 2 – Gifts
Make sure gifts from friends and family get deposited into this investment fund as this has a huge impact.
If you deposited a $200 gift from your parents when your child is born, on their 18th birthday, at a 6% return this would be worth $587!!
Step 3 – Financial Literacy
Take the 18 years to work with your children on basic financial literacy skills, from the barefoot investor through to having them buy their own shares with you so they can start to understand investing and saving.
It’s important to ensure they have these skills so they can properly capitalise on this gift you are creating them and they don’t have a blowout once they turn 18!
Step 4 – Close the bank of Mum and Dad early
A fund like this is a privilege, not a right so hand over the reigns when you think your children are ready. Parents are closing the bank of mum and dad early and using these funds to help their children with a number of things:
- Continue investing and be financially independent (Check the calculator to see what would happen if they continued investing from this early age)
- Buy a property
- Put some away in their super account
- Travel and life experiences (when we’re allowed to again of course!)
We’re currently building Fledged to be a safe and simple platform parents can use to get started setting up their own financially independent children. If you fall in the 80% of parents who want to do this but aren’t sure where to start – we could be the solution for you.
- Basic Investment Fund – If you aren’t sure what to invest in or how to start, we can have you set up in minutes with every dollar you invest automatically split across 1800 of the worlds proven, top companies
- Gifting Options
- We make it possible for friends and family to gift directly into the fund. Some friends and family members never know what to buy and would love to gift a high impact, sustainable present in the form of an investment
- Memories – Friends and family can also leave messages and photos so your children know who has helped them and been there along the way
- Basic Financial Literacy – If you need it, Fledged can help you with the basics of financial literacy in no time
Happy investing from the Fledged team!