Cash & Bonds Investing for kids using Investment Bonds

Discussion in 'Other Asset Classes' started by mkbonline, 11th Aug, 2019.

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  1. mkbonline

    mkbonline Well-Known Member

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    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
     
  2. Trainee

    Trainee Well-Known Member

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    Surely with that income you should have assets in a family trust distributing to a bucket company?
     
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  3. jprops

    jprops Well-Known Member

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    Investment bonds are typically very rigid vehicles. I think its most often the case, that structuring your assets as best fits your circumstances, instead of investing in child's name will have best outcome. By all means buy investments for your child, but just maintain a spreadsheet to track what you buy.
     
  4. mkbonline

    mkbonline Well-Known Member

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    Can you please elaborate on family trust and bucket company concept? We both are full-time employee and get salary as PAYG (not ABN etc).
     
  5. Trainee

    Trainee Well-Known Member

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    Get legal advice. Point is with 360k+ of income, you must be able to invest in shares etc

    This shouldnt be just about getting money together for your childs education. You should be thinking about investment more broadly.

    What are you saving?
     
    Last edited: 11th Aug, 2019
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    These are tax advantaged investments, so after the 10 years, the entire amount is tax free. A no brainer but you need to be in a position to make annual additional contributions if you so desire and want to grow the amount to be received.

    @Trainee - kid's education ain't cheap and this is just one way to achieve it (Australian Scholarship Group is another type but education specific).
     
  7. mkbonline

    mkbonline Well-Known Member

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    Yes. I am working towards creating broader investment plan - covering property, Index funds , investment bonds for child education and higher contribution to super. Right now, trying to educate myself, to make best financial decision and coming to terms of $1.5 mil loan - i took recently for new PPOR. Appreciate your thoughts on it :)
     
  8. mkbonline

    mkbonline Well-Known Member

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    Yes Exactly. Any specific recommendation for best investment bonds for kids? Barefoot investor mentions few of them - Lifeplan's NextGen , Generation Life's Imputation bond and AMP's Growth Bonds.
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    @mkbonline - I daresay that a recommendation would fall under 'financial advice' hence the lack of FP's making any comments. Most people haven't heard of them or used them, so there's very few comments.


    Although ASG is one option (we didn't go for this option however I know others who did - paid for 3/4 of school fees from yr 7 to Uni).
     
  10. mkbonline

    mkbonline Well-Known Member

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    Barefoot investor has very negative views about ASG. I am contemplating of going with Generation Life's Imputation bond as they have investment options of Vanguard and IShares.

    Any sydney based FP recommendation will be very much appreciated.
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

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    You could look here (Service Provider Directory) - linky
    Or check the website of a few of the accountants in the same spot
    Otherwise @Paul@PFI could point you in the right direction.
     
  12. mkbonline

    mkbonline Well-Known Member

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    Thanks Scotty.
     
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