Have you ever given a cash gift to children? While it may not top their Christmas list, giving an investment instead could make a world of difference, especially when friends and family are involved.

It’s no secret that life can be an expensive journey. From property booms to rising costs of living, parents worry about their finances. But most of all they worry about the opportunities their children will have.

Research shows that the bank of Mum and Dad contributes on average $100,000 to a child’s first home¹, but from hundreds of parents we surveyed only 42 percent are setting aside cash to help support kids when they’re older².

Sure, money isn’t everything, but as a community of friends and family we can make a big difference with only a little effort. Cash contributions, especially investments, add up over time and may provide a leg up into the housing market or ensuring a child doesn’t need government assistance when paying for future University fees.

So, rather than wondering if toys or games we give at Christmas will be put to good use or whether they’re great for the environment, a financial investment is the most meaningful gift family and friends can give this year.

But why investing?

History shows the returns from long-term investing (10-20 years) are higher than the interest earned from cash sitting in a bank account. And with plenty of years on their side children naturally make great investors.

Using the power of compounding from the stock market and taking advantage of the time before a child turns 18 is a simple yet effective strategy.

How can family and friends help?

We believe it takes a village to raise a child. This means that the financial burden of raising little ones is shared if family and friends pitch in to help, especially true as rising costs of living means less to put away for our kids.

Putting this in context, by collectively investing small, and almost unnoticeable, amounts on a regular basis, the village can grow a significant balance for the child by the time they turn 18.

For instance, if five people initially invested $100 and then $20 a month, at a 6% rate of return over 18 years, that child would have over $40,000 by the time they reach adulthood³. Up those monthly contributions to $50 and the final balance would be nearly $100,000!

As can be seen, children who are fortunate to have a village of such caring and generous people looking out for them will benefit greatly. In turn, this will relieve some of the financial pressure on their parents.

About Itrust Invest

Itrust Invest is Australia’s innovative online investment platform designed for families. We offer a simple and meaningful solution for friends and family to gift investments and join a community that actively builds a better financial future for the children they love. Whether you’re from a small or large family, you’ll get to watch their balance grow and add to it over time. Thus, readying them for life’s big purchases and easing the financial burden on Mum and Dad.

How Itrust Invest can help you:

• Ease of use, Safety and Simplicity

An easy way to make small, regular contributions into investment funds, starting from as little as $10 on a one-off, weekly, monthly, or annual basis. Our payment systems use bank grade encryption, we are licensed with the Australian Securities & Investments Commission and the assets of the fund are held separately by the custodian of the fund, Perpetual.

• Three Investment Choices

Choose to invest in a Global fund, Gold, or a Balanced Exchange Traded Fund, with the ability for the parent (i.e., the manager of the account), to select their allocation across these three funds.

• Up to 10 Beneficiary Accounts

This means you can assist up to 10 young people – perfect for large families.

• Gifts that make a difference

We enable friends and family to send cash gifts in the form of investments. These are paid into the parents Itrust Invest account, thus enabling the village of friends and family to help supercharge their financial future too.

• Financial Literacy

As well as helping kids become more financially independent, we also believe in advancing financial literacy. On the Itrust Invest website there is a growing number of high-quality articles on saving and investing, written by our experienced team.

Speak to the team via live chat by heading to https://itrustinvest.com/ and be sure to follow us on Instagram and Facebook for content that helps you develop smart money habits.

Happy investing from Paul and the Itrust Invest team! 

¹Mozo, Bank of Mum and Data report 2021.

²Survey answers by parents of children <18yo and/or expecting in Australia, n=503, nationally representative by income. Surveyed October 2022, Itrust Invest.

³https://moneysmart.gov.au/saving/savings-goals-calculator.