Best way to invest kids savings in shares?

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Forums › Finance and wealth management › Best way to invest kids savings in shares?

Batman

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#317794 15-Nov-2024 11:07

So kids have a savings account. What's the best way to invest for them? I'm thinking shares. Do i buy the shares myself using something like CMCmarkets, or put it in kiwisaver? or something else?

Thanks

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#3309320 15-Nov-2024 11:25

unless you want to trade on specific stocks the easiest buy and hold spread option is to invest via an ETF, (exchange traded fund) either a global or US based one to spread the risk,

You can do that via Sharsies or similar to keep costs down....

jonathan18

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#3309322 15-Nov-2024 11:38

While I'm sure others will encourage investing in shares, including on platforms like Sharesies etc, we chose to go down the route of managed funds, as we have for our own savings (tried a couple of times with Sharesies but simply don't have the interest or knowledge in it to make it worthwhile). I had a direct conversation with the kids about it (as it's their money), so they decided how much to put into what fund etc, and I let them know monthly how they're doing, so a good opportunity to grow knowledge without having to be too hands-on. They're with Fisher Funds, as it bought up KiwiWealth, but these days I'd have suggested Milford, which I've found good for both KiwiSaver and managed funds.

Obviously so many options out there and as many opinions! Money Hub can be a good source of info, though: https://www.moneyhub.co.nz/investing-for-kids.html

freitasm

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#3309334 15-Nov-2024 12:21

You can open a Sharesies account for kids (affiliate link), and indicate at which age the account "ownership" is transferred to them.

Or you can open a KiwiSaver account and benefit from the money the government puts in there every year, providing you also put some in. The downside is that the Kiwisaver is tied up until retirement or early withdrawal for a first-home buy.

huckster

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#3309335 15-Nov-2024 12:26

freitasm:

You can open a Sharesies account for kids (affiliate link), and indicate at which age the account "ownership" is transferred to them.

Or you can open a KiwiSaver account and benefit from the money the government puts in there every year, providing you also put some in. The downside is that the Kiwisaver is tied up until retirement or early withdrawal for a first-home buy.

You don't get the Government contribution if you are under 18.

wellygary

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#3309336 15-Nov-2024 12:28

freitasm:

You can open a Sharesies account for kids (affiliate link), and indicate at which age the account "ownership" is transferred to them.

Or you can open a KiwiSaver account and benefit from the money the government puts in there every year, providing you also put some in. The downside is that the Kiwisaver is tied up until retirement or early withdrawal for a first-home buy.

Nope, under 18s don't get the government $500/year matching

https://www.amp.co.nz/kiwisaver/kiwisaver-for-under-18s

Under 18s are not eligible to receive compulsory employer contributions or government contributions.

freitasm

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#3309340 15-Nov-2024 12:31

No? You learn something new every day.

cddt

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#3309342 15-Nov-2024 12:33

Uff CMC Markets is not an investment platform, it's a trading platform. Not ideal for long term investment. Basically gambling if you don't know what you're doing. And even if you do know what you're doing, there's a good chance you'll be losing money too.

Something like Simplicity, InvestNow, Kernel, etc. is what you are looking for. I believe some are offering reduced account fees for <18.

My referral links: BigPipe | Mercury

Wise

Send money globally for less with Wise - one free transfer up to NZ$900 (affiliate link).

jonathan18

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#3309372 15-Nov-2024 13:30

freitasm:

No? You learn something new every day.

Yep, and it's why it's difficult to provide a strong rationale as to why kids <18 should bother joining KS.

My oldest got his first job a few months back, which is when I found out about the lack of govt contribution as I had previously been suggesting he start contributing. (He already has a KS account as I got both our kids enrolled when the govt was still providing a $1000 lump sum.)

It's now, therefore, a matter of persuading him to start when he turns 18; that's, I guess, why it can make sense to contribute when < 18, ie it normalises saving (and it's already coming out of the pay packet.)

And this is where I think managed funds are quite a good alternative for kids as the options are incredibly similar to Kiwisaver, ie the same provider will offer very similar funds (eg Milford Kiwisaver; Milford investment funds), so they'll get used to the concept, terms, products etc.

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#3309378 15-Nov-2024 14:09

When I did this for my kids, I just opened High Growth accounts with Simplicity (1 each in my name and my wife's, due to the way Simplicity works).

This had two benefits for me...

I have control over the money, so if one of my kids isn't making great life choices at 18, they won't just automatically get the money.

They'll be able to access it early if they're wanting to use it for any of a myriad of good uses before they hit 65...by which time it'll be closing in on the year 2100 and the earth may just be a smoking crater.

Your milage may vary on one or other of these points.

MadEngineer

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#3309383 15-Nov-2024 14:24

freitasm:
No? You learn something new every day.

Yeah they dropped this maybe 10 years go, pretty stink.

I’d still personally recommend KiwiSaver and for a kid stick them on the highest gain+risk plan that your chosen provider has.

You're not on Atlantis anymore, Duncan Idaho.

Batman

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#3309393 15-Nov-2024 15:10

cddt:

Uff CMC Markets is not an investment platform, it's a trading platform. Not ideal for long term investment. Basically gambling if you don't know what you're doing. And even if you do know what you're doing, there's a good chance you'll be losing money too.

Something like Simplicity, InvestNow, Kernel, etc. is what you are looking for. I believe some are offering reduced account fees for <18.

thanks, let me check out the ones you mentioned

ascroft

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#3309395 15-Nov-2024 15:11

Read up on how KS can be used to buy your first house……

That might temper the desire to take on too much investment risk.

Mark

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Batman

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#3309396 15-Nov-2024 15:14

cddt:

Uff CMC Markets is not an investment platform, it's a trading platform. Not ideal for long term investment. Basically gambling if you don't know what you're doing. And even if you do know what you're doing, there's a good chance you'll be losing money too.

Something like Simplicity, InvestNow, Kernel, etc. is what you are looking for. I believe some are offering reduced account fees for <18.

how do these perform compared to Milford?

wellygary

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#3309397 15-Nov-2024 15:17

ascroft:

Read up on how KS can be used to buy your first house……

That might temper the desire to take on too much investment risk.

Mark

If they are young <10, its still a likely 15 year+ minimum investment horizon, that can handle plenty of risk...

tweake

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#3309401 15-Nov-2024 15:44

Batman:

So kids have a savings account. What's the best way to invest for them? I'm thinking shares. Do i buy the shares myself using something like CMCmarkets, or put it in kiwisaver? or something else?

Thanks

i would do kiwi saver to start with.

the reason being is KS is hard to access, more importantly hard for other people to access. so many times that people setup accounts/investment for kids, and it gets cleaned out in the divorce, scammers, hacks, family members drug problem etc. or it gets cleaned out as soon as kids get access to it. this is why govt proposed opening up KS for other things so certain industries (like housing) could profit by cleaning out peoples KS accounts.

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