I have some money in my kids accounts that i'm not sure what to do with long term? A bank account has been the easiest option but probably not the best long term. They are only 2 and 4y/o so it's a 15+ years plan.

They are currently sitting at bout $3k, we've been putting in about $100 a month give or take and perhaps with a higher contribution in a few years. I plan for the money would go towards something valueable like travel, education or housing i guess.

Is my best option bonds, shares or something else?

From my limited research bonds appear to be fairly safe, tax is taken care of long term and i can put in 125% each year which would suit me. Not sure if i can contribute fortnighly / monthly or only yearly though?

Shares on the other hand are a greater risk and a little messier come tax time but long term the return might be better? I once had 1000+ Woolworths shares under DRP but i thought $9 a share was better spent on modifying a wrx. Hindsight huh.

Or do i just throw it in an ING account with maybe 3%?

Buy a bar of silver. Should cost around 3K rom the Perth Mint.

A precious metal for less than 20 dollars an ounce is a steal.

The price is obviously being suppressed.

www.asg.com.au/

I'm not being a smart arse, but the best thing you can do is instill a good work ethic into the kids themselves and let them earn their own money to spend on the things you have mentioned.
In the mean time invest/save money so that you can have their back if it all goes pear shaped for them. The confidence that Dad/Mum has your back but you gotta get ahead yourself is a great stepping stone in it's self.

The kids that I see get given the world on plate are useless.

Beware of long term bonds at this stage of the interest rate cycle.
If interest rates go up, the value of the bonds will plummet as it will then be the discounted value of the cash flows to maturity, where the interest rate at which it is discounted is higher.

As a very crude example, if official rates are presently 1 1/2 % and go up to 3%, then the value of a 20 year bond will close to halve.

The return on bonds over the last decade looks good because as interest rates went down their value went up.

The basic rule with investing is that higher returns ALWAYS go with higher risks. And some 'bond' like structured products offered at the moment don't actually offer rewards higher enough to compensate for the higher risk you are actually taking on.

Low cost index fund. I.e vanguard.

Buy the barefoot investor books, get both. The barefoot investor, the only money guide your every need and the barefoot investor for families $19 dollars each big w. That will set you on the right path, also low cost index fund is smart on a drip plan (myusernam) go with LIC or ETF company's.

If you have a mortgage then make your kid's account offset the principal of your mortgage, you will not get a better cash rate than your mortgage. This is the "holistic" approach because it consolidates both your kid's wealth and your wealth as a whole because let's face it they'll get your house in the end

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kk said..
I'm not being a smart arse, but the best thing you can do is instill a good work ethic into the kids themselves and let them earn their own money to spend on the things you have mentioned.
In the mean time invest/save money so that you can have their back if it all goes pear shaped for them. The confidence that Dad/Mum has your back but you gotta get ahead yourself is a great stepping stone in it's self.

The kids that I see get given the world on plate are useless.

I 100% agree and my plan isn't to raise spoilt brats but my parents helped me when they could and i'd just like to be in a position to do the same.

It could be as simple as matching dollar for dollar a car or studies, house deposit rather than giving them 25k on their 18th birthday to blow on the whatever teenage girls in 2035 are into!

Tamble, thanks for that and of course there will a time when interest rates will start rising again?

I've started googling Vanguard as well, it looks pretty straight forward and i can bpay $100 at a time. I'm nit sure whether its a $5k minimum though so i'll look closer.

I have both Barefoot books although the families one i haven't read but i'm pretty much up to date on what he says to do with the exception of investing. It's been great so i'll re-read the last few chapters and start on his families book. After trying twice last year for a discount on my mortgage i followed his script and went from 4.6% to 4.1%. It's not great but a start!

Getting ahead of things a little here, but when they are getting close to 18, consider setting up a discretionary trust. If you've got a few kids spread slightly apart, and they go to uni so have little income for a few years, you can do very well out of this for a decade or so.

I can't believe nobody has mentioned any form of Bitcoin and cryptocurrency.

It's the future, right?

Right guys, come on, it's the future.

I was told it was the future, come on guys, right?

100K by 2020. Lambo.

Kids rocking up to school with Lambo and Bitcoin plates.

If you and everyone you know just PLEASE PLEASE PLEASE buy some Cryptocurrency, We'll all be rich.

You just gotta buy it you stingy forever poor idiot. PLEASE

Shares and Bonds are for Dinosaurs and they can't fit in a Lambo.

I just bought 400,000,00,000,000,000 tokens for only $500 of "Hadlastlaugh" It's a company that is going to revolutionise the way we treat animals, and also how we travel to, and from work, by adding SPACES and Hungry Jacks Whoppers for breakfast.

Projected a 6,000,000% according to telegrams. I'm all in.

So yeah.

I think you should stick with conventional methods of saving.

Always keep some away for a rainy day when the ATM doesn't work.

Gold and Silver. What is known as God's money.

With house prices the chances of our kids owning a home will be so much harder without our help.
Then it's also our responsibility to make sure they study and work hard but be individuals and enjoy life.
My mum helped me but also would go on ski holidays as in "spend kids inheritance".

Dollar cost averaging into a diversified portfolio of ETFs.

Compounding returns / interst in appreciating assets is the safest way to get a decent long term return. You won't make a killing but you won't get killed by market cycles either.

Is it soo much harder to own a home nowadays ?
It definitely would be , having to have connectivity , two cars , two tellies , ( and big ones ) , and fully furnished.
It was normal for us to have sheets on the windows for a few years and old crap cars.
Also the plan was to have children when we could afford to . No one owed us nothing.
Im 50 and we seem to be the last of those ideals.
Im all for what kk says but it's hard to instill these good ol fashioned ways when none of their friends are doing it.
As also stated, I also keep the kids money and pay off my own mortgage or second or third and delay it as long as I can , and then give it to them and hope my kids one day are smart enough to appreciate what money is.

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Imax1 said..
Is it soo much harder to own a home nowadays ?

Yes:
Back in 1982, the ABS Survey of Income and Housing revealed that 168,000 or 10% of home buyers spent more than 30% of their gross household income on housing costs. Nearly 30 years later in 2011 these numbers had soared to 640,000, equivalent to 21% of all home buyers.
theconversation.com/the-facts-on-australian-housing-affordability-42881

That was 2015 worse now. Kids nowadays are not the moaning whingers you imagine, they are well placed to do better than we did. Each generation does and the previous generation complain about them.
From Plato:
"The children now love luxury; they have bad manners, contempt for
authority; they show disrespect for elders and love chatter in place
of exercise. Children are now tyrants, not the servants of their
households. They no longer rise when elders enter the room. They
contradict their parents, chatter before company, gobble up dainties
at the table, cross their legs, and tyrannize their teachers."

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hilly said..

Imax1 said..
Is it soo much harder to own a home nowadays ?

Yes:
Back in 1982, the ABS Survey of Income and Housing revealed that 168,000 or 10% of home buyers spent more than 30% of their gross household income on housing costs. Nearly 30 years later in 2011 these numbers had soared to 640,000, equivalent to 21% of all home buyers.
theconversation.com/the-facts-on-australian-housing-affordability-42881

That was 2015 worse now. Kids nowadays are not the moaning whingers you imagine, they are well placed to do better than we did. Each generation does and the previous generation complain about them.
From Plato:
"The children now love luxury; they have bad manners, contempt for
authority; they show disrespect for elders and love chatter in place
of exercise. Children are now tyrants, not the servants of their
households. They no longer rise when elders enter the room. They
contradict their parents, chatter before company, gobble up dainties
at the table, cross their legs, and tyrannize their teachers."

I get it , I'm old and whingy.
But it can still be as easily done .
But you have to compare standards . As I said , our first house was cheap and simple , not a fully furnished AV Jennings house .
It cant be done nowadays says the 18 year old sitting in his $ 30 grand hocked up Ute , looking at a $ 750 grand house while looking at his have to have new I Phone.
We all know of kids with older ideals that indeed do own houses without huge wages .

White

Put it all on white.

Go down the casino and put the whole lot on white.

No, no wait... black.

Put it all on black. White ain't coming up this time.

Put it all on black, yeah, black