Kids birthday money.... VAS or sit in our offset account

Discussion in 'Share Investing Strategies, Theories & Education' started by markson, 1st May, 2016.

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  1. markson

    markson Well-Known Member

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    Hi Everyone,

    Since the kids were born we have been putting birthday money away for them (around $4k each). At the moment it is just sitting in our offset account against our PPOR mortgage.

    I was thinking about buying them each $1k worth of VAS and reinvesting the dividends straight back into it.

    Is there any advantage or am I just better off leaving it in our offset account?

    Thanks
     
    markson, 1st May, 2016
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    $1k isn't much. Maybe better to leave in the offset and build it up more. Make sure you pay off your loan first and borrow to invest and then claim the interest and save some tax.
     
    Terry_w, 1st May, 2016
    #2
  3. Hodor

    Hodor Well-Known Member

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    $1k isn't much. Therefore I wouldn't worry too much about the interest you save and invest it in VAS for the educational value.

    I would consider a direct stock that offers DRP even. The idea that when they are old enough they can see and understand the actual company they own in part would be more interesting for them. I got that idea here so I won't claim credit for it. If you go this line I'd pick something blue chip and visible so they see it. (Supermarket, big 4 bank etc).
     
    Hodor, 1st May, 2016
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  4. Marg4000

    Marg4000 Well-Known Member

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    A chance for you to give them a finance lesson. Each year you should be "paying" them the amount of interest you save by having their money in your offset. Once they are old enough they can watch their money grow via a simple spreadsheet.
    Marg
     
    Marg4000, 2nd May, 2016
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  5. Jerry O

    Jerry O Well-Known Member

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    that's actually a good idea @Marg4000. Finance lesson 101 at an early stage. Compounding interest explained in an easy to understand format.
     
    Jerry O, 2nd May, 2016
    #5
  6. tvadera

    tvadera Well-Known Member

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    Hi,

    I have been buying some direct stocks and some VAS

    My goal is to keep it in my account and then utilise it for their education or any other needs. I won't be selling it if I don't need the money

    I have seen some multi baggers that my dad bought and I have seen them increase many fold and my dad used the stocks to fund major expenses during life

    I also agree with financial lesson as sooner kids understand value of money better for the family

    Good luck
     
    tvadera, 3rd May, 2016
    #6
  7. Azazel

    Azazel Well-Known Member

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    But you should also make them work out the compound interest by hand - now that's a finance lesson.
     
    Azazel, 3rd May, 2016
    #7