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Investing for kids

Discussion in 'General Investing Discussion' started by NoAssets, 11th Aug, 2019.

  1. NoAssets

    NoAssets Member

    Joined:
    10th Nov, 2012
    Posts:
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    Location:
    sydney,nsw
    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
     
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  2. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
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    Location:
    QLD
    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
     
  3. NoAssets

    NoAssets Member

    Joined:
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    Location:
    sydney,nsw
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  4. twisted strategies

    twisted strategies Well-Known Member

    Joined:
    3rd Nov, 2013
    Posts:
    1,101
    Location:
    QLD
    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