I am planning to start investing for my 7 year old daughter - for education etc... Came across this article. https://www.firstlinks.com.au/put-money-away-month-kids/ Both myself and spouse are at 45% tax bracket. Considering our income level and kid's age - is Investment bond best option? If yes - which Investment bond would you recommend? Barefoot investor mentions few of them - Lifeplan's NextGen , Generation Life's Imputation bond and AMP's Growth Bonds. Appreciate your thoughts. Cheers, M
bond options at current rates ??? BEST OF LUCK ON THAT but seriously , consideing the child's age , if you are brave ( bonds can implode as well ) look at a 10 to 15 year maturity date ( to give her a financial base as an early adult ) a TOUGH decision is fixed interest v. variable ( each has it's pros and cons ) my last remaining hybrid is a varible rate bank hybrid that is 'perpetual ' , meaning no fixed naturity date and i could very well have exited that by the end of the week ( the sale order is in the market at a set price ) ( i will crystallize , if sold , a 50% capital gain , i bought them in 2011 , and really the extra regularity risk possible of 'bail-in ' makes profit-taking more compelling , to me ) the question is where will interest rates go , and what will real inflation be like in 5 , 10 , 15 and 20 years ( and all my guesses at it have been wrong so far ). far from safe is corporate debt ( but you really have to do your homework there , to understand completely what you are buying ) banks are facing 'bail-in laws , so probably avoid them , my 2012 industrial bets are gone ( got taken over and profits crystalized ) and so have my healthcare bets .. HOWEVER RHC is still going and issues corporate debt ( just never at a price i found attractive ,) RHCPA RAMSAY HEALTH CARE LIMITED TRANS PREF 6-BBSW+ 4.85% PERP SUB RED T-10-10 ( you are paying roughly $107 for a hybrid with a face value of $100 ) AGLHA AGL ENERGY LIMITED. HYBRID 3-BBSW+3.80% 08-06-39 SUB STEP T-06- ( although i have personal issues with AGL others have a different opinion ) ( matures in the middle of 2039 ) the one i really would have liked was corporate debt in FMG ( which was offered overseas , sadly ..) https://www.asx.com.au/courses/inte..._Introduction_to_interest_rate_securities.pdf try the above link for a start ( and please THINK about what you read as well ) the key factor in bonds is RISK vs REWARDS and the sagas in Greece and Cyprus re-wrote the rules on sovereign ( Treasury) debt so now i won't consider any sovereign debt yielding less than 6% per year . that may seem harsh but the world is awash with debt may never be anle to be paid back ( national AND corporate ) but PLEASE ,PLEASE learn about this stuff completely before you part with cash . . Chicago is broke ( and probably Detriot ) Peuro Rico is broke ( a US protectorate ) half the EU is technically broke . goodness knows what the Australian balance sheet looks like ( ACTUALLY ) they can't even get the Census right and all that is at historically low interest rates
May be my understanding is incorrect. But I have impression that if I invest in say for example in Generation Life's Imputation bond child builder and choose "Vanguard High Growth Index Fund" as investment option - I can get 9-10% pa return https://generationlife-endpoint.azu...eration-life-product-disclosure-statement.pdf
if you have indentified an attractive product , have you talked to Vanguard directly , you might need to set up a trust ... Low-cost managed funds | ETFs i bought my Vanguard products on the ASX ( VAS and VHY ) but have heard Vanguard can be helpful to regular buyers ( i choose to time my infrequent buys so the ASX suits me nicely
