# What would you invest in to give your  kids a head start??



## moXJO (29 April 2007)

I’m fishing for ideas for giving my kids a better start(one is 5years the other 8months).I have 5k that is set aside for my 5year old. I’m tossing up between buying a stock with a solid dividend and writing covered calls over the top until I can diversify a little more(at the moment I feel the market is a a bit overpriced for this). Or buying one or two  stocks in the  more speculative commods sector. My plan is a bit more detailed than this but a bit stretched for time, and really tired.

Just interested in ideas and how you would change your investment strategy at the 10k,20k,50k levels. How would you structure it etc.I currently trade shares ,cfds ,options and forex.I am willing to accept a bit more risk at this stage until about the 20k mark.But mentally I feel a bit more cautious about losing my kids money


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## hongwong (29 April 2007)

moXJO said:


> I’m fishing for ideas for giving my kids a better start(one is 5years the other 8months).I have 5k that is set aside for my 5year old. I’m tossing up between buying a stock with a solid dividend and writing covered calls over the top until I can diversify a little more(at the moment I feel the market is a a bit overpriced for this). Or buying one or two  stocks in the  more speculative commods sector. My plan is a bit more detailed than this but a bit stretched for time, and really tired.
> 
> Just interested in ideas and how you would change your investment strategy at the 10k,20k,50k levels. How would you structure it etc.I currently trade shares ,cfds ,options and forex.I am willing to accept a bit more risk at this stage until about the 20k mark.But mentally I feel a bit more cautious about losing my kids money




I would feel even worst if i made a quote to you and lost your kids money .

Can i ask you a question ?

what the difference in investing $1 then $100,000 ?

arent you investing and have done all your homework ?

Warren Buffett :
Risk comes from not knowing what you're doing.


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## moXJO (30 April 2007)

hongwong said:


> I would feel even worst if i made a quote to you and lost your kids money .
> 
> Can i ask you a question ?
> 
> ...




I’m not going to blindly invest off a post in a forum, but other peoples methods are always of interest. My personal trades are of a shorter nature and have to be watched more carefully. So I would rather take a softer approach given the timeframe I have with the kids growing up. I’m not looking for the ‘educate yourself first’ kind of posts as I've been doing that off and on for the past 16 years.

I'm looking for different perspectives. And I would invest $1 differently to $100000.I believe once a certain level is reached I would change strategies. In fact there is a host of factors to consider but that’s off topic.


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## hongwong (30 April 2007)

moXJO said:


> I have with the kids growing up. I’m not looking for the ‘educate yourself first’ kind of posts as I've been doing that off and on for the past 16 years.
> 
> I'm looking for different perspectives. QUOTE]
> 
> ...


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## Morgan (30 April 2007)

I am also looking to create a nest egg for my son's future schooling costs.
I like dabbling in speculative stocks, but feel this is the wrong approach for the above.
Presently I am looking at investing into LICs such as AFI ARG and WAB
Maybe $5000 in each to start with, then adding in $5000 lots after that as money becomes available.
All would give me  exposure to a broad range of companies, have low management costs (compared to unlisted managed funds), allow dividend reinvestment, and I would will not pay tax on capital gains until the shares are sold.
WAB is an abosulte return fund, using strategies to benfit from rising or falling markets.


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## moXJO (30 April 2007)

hongwong said:


> Sorry did not mean to come off rude,  these forums are very in-personal.
> 
> I guess u are in it for the long term and I would look at styles like Warren Buffet, Peter Lynch and Benjamin Graham.
> 
> It great that you are thinking of your kids and I hope I would do the same some day. !!!!





Ooops neither did I ,you gave sound advice and I appreciate the reply.Was just trying to give a bit of background.


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## Knobby22 (30 April 2007)

I don't see why you want to differentiate between your normal investing and the child.

I would just try to invest well so that you can help your child in the future.
I would also never invest in the childs name as the tax laws are too punitive. If you really want to do this you need to set up a family trust.


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## hongwong (30 April 2007)

Morgan said:


> I am also looking to create a nest egg for my son's future schooling costs.
> I like dabbling in speculative stocks, but feel this is the wrong approach for the above.
> Presently I am looking at investing into LICs such as AFI ARG and WAB
> Maybe $5000 in each to start with, then adding in $5000 lots after that as money becomes available.
> ...




Hi Morgan,

Cool .

Check this up with your accountant, but even so you do divined reinvestment, you still have to pay tax on this.

Capital gains tax is a big ..... hopefully the gov. does something about this.

If I may offer some unsolicited advice;
Don’t look at the last 2 years for performance, but the past 15 years to get an understanding of the ups and the downs. I assume you would be looking at that time period to invest.

Also see who is running the fund, how long has he been running it etc.

hongwong


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## tech/a (30 April 2007)

I have and still do,invest time in THEM---My kids.

Ive never pushed them---always encouraged.
I've never critisised the path they have chosen as its their path not mine.
I've always guided never dictated.
I've always had a genuine interest in anything they do,and made sure I've been involved.
I've always been there.
I've led by example.
I've taught them to have pride of place in every endevour.To be happy with who THEY are.

*Its been a wise investment if not my best investment in life, *one which has rewarded me as much as it has them.

Son is doing his PHD in Physics.
Daughter is Managing a Fashion Store.
Both are I'm proud to say really lovely people.

*What better start in life?*


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## Ferret (30 April 2007)

I'll back Morgan in recommending LICs.  

I bought some AFI for each of my three kids about 3 years ago.  LICs are perfect as buy and forget share market investments.  Being diversified, they are as safe as you can get in the share market.  They won't make stellar short term returns, but if your kids sit on them for 10 years or more, they will do very nicely.  They also generally offer dividend reinvestment schemes to compound returns.

Watch the size of the investment, though.  Childrens' income is taxed at a very high rate if it exceeds a certain threshhold, so you don't want their dividends exceeding this until they are 18.

Ferret


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## wayneL (30 April 2007)

tech/a said:


> I have and still do,invest time in THEM---My kids.
> 
> Ive never pushed them---always encouraged.
> I've never critisised the path they have chosen as its their path not mine.
> ...




Great advice Tech,

Going a bit off topic here, but I certainly notice 2 types of concerned parents.

1/ Those to whose kid's achievement is all important.

2/ Those to whose kid's happiness and balance is all important.

(and those who don't give a rats, but forget them for the moment)

In reality I suppose every parent is a mix ox the above, but I suggest parents who are strongly type 1 are toxic, hence I like what you have written.


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## Sean K (30 April 2007)

moXJO said:


> I’m fishing for ideas for giving my kids a better start(one is 5years the other 8months).I have 5k that is set aside for my 5year old.



If you're not going to actively manage these $$ after you've pulled the trigger, I'd be looking at a managed fund with a regular investment each month. Start with one and when it gets to 10 or 20k, diversify into another fund in a different sector with a different manager. This should build up to something significant after 20 years.

If you're going to actively manage it, then that's a different kettle of fish. In that case, blue chips that pay a dividend. 

If you're going to be short term trading dodgy speccies, then a combination of the above and trade. 

Just ideas!  

Note: Not qualified to give advice on footy tips, let alone money.


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## grumpee boi (30 April 2007)

Vanguard has 4 lifestrategy funds that range in asset allocation from 30-70 conservative-aggressive all the way up to 10-90 con-agg.  The actual allocations include everything from bonds to emerging markets.  Generally the consensus is that short-term horizon equals more conservative and long-term equals more aggressive.  I will let you be the judge.  Min investments is 5k and only 0.9% per annum fees.

Best part is that the portfolio is extremely well diversified and gives the kiddies a great start.  

Adam


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## barney (30 April 2007)

tech/a said:


> I have and still do,invest time in THEM---My kids.
> 
> Ive never pushed them---always encouraged.
> I've never critisised the path they have chosen as its their path not mine.
> ...




I'm off topic, but nice post Tech................. Family (kidz etc.) are everything ............... all the money in the world won't make you happy without someone to share it with.  (I have a great family to share it with,.........  but I have no money LOL ...........)


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## tech/a (30 April 2007)

> Note: Not qualified to give advice on footy tips, let alone money.




Kenna's.
I gotta tell you I'm damned hopeless!
Ive had a standing bet for 6 yrs with the organiser of a footy pools here and EVERY year I lose!!
This year I'm doing just the same--losing I'm 47th out of 65.
My Secretary---an American who has no idea about AFL is 3rd!!!

And EVERY week I lose the $5 side bet with her!!

So I'm going to start a thread "Help Tech with his footy tips".


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## moXJO (1 May 2007)

Knobby22 said:


> I don't see why you want to differentiate between your normal investing and the child.




   I'm more off a short term trader and prefer using options, but I find it more time demanding(have to watch the screen more).I do well from it, but of course every now and then get a 5 loss run. I would wait till I hit the 15k mark and then use a combination. I am currently focusing more attention on the business, and running round with the kids in the afternoons. So I get a bit stretched for time. I find that I can lose an hour looking for chart patterns or getting caught up on the net looking for something usually not relevant.

  So I was simply looking for some different methods and ideas people have used with their own kids. And allows me to have more time to do other things. At the moment I'm taking a breather with my trading.

Some really great replies thanks all


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## Prospector (1 May 2007)

I am with Knobby and TechA on this.  We are in the last throes of having second son finish Year 12 and other son having graduated last month from Uni. Both went through non public schools (for lots of reasons and dont need to go into details) and while TechA doesnt agree with this, we also paid (and will pay) their HECS for their primary Uni Degree.  But most people dont pay that HECS fee and I can see really valid reasons why they wouldnt, just as we have valid reasons why we did.

Anyhoo, we never said "we must put aside XX dollars for their education'.  But we knew that we had a target amount we had to pay each month to pay the fees and I guess we preferred to invest in hard work, the business, etc and if we got that right and were lucky, well we would have enough cash to pay the bills.  I would never put away money with those scholarship investment funds either.

Happiness versus achievement?  Well, my older son is incredibly happy that he has just achieved a Uni degree in area he loves and chose himself.  Younger son - in his final year of schooling he has chosen subjects that he really loves and for the first time in 12 years, almost likes going to school and had ambitions of getting 'full marks - a '20' ) in one of these subjects so he can get a new playstation from us.  (then he will be really happy with his achievement!) HIS aim, not ours! I told him we would reward him for his hard work (he is working damn hard!) and not the result he gets, but HE wants a '20'.  I think he just wants to meet the Governor myself, which is what happens when you get a 20 in SA!

Do you really need to separate it?

I guess that doesnt help you much, does it


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## Sean K (1 May 2007)

Prospector said:


> I am with Knobby and TechA on this.....
> Happiness versus achievement?  Well, my older son is incredibly happy............



Perhaps that's because you bought PDN at 2 cents Prospector.


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## Knobby22 (1 May 2007)

Great post Prospector.


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## Prospector (1 May 2007)

kennas said:


> Perhaps that's because you bought PDN at 2 cents Prospector.





Actually, he is quite chuffed that his mum trades in shares and does OK but peeved that he missed out on doing that himself.  Now he wants to sit down with me once a month to have 'a financial chat'.  Too cute! Oh, and it was 11cents not 2 cents.  If I had bought at 2 cents I probably would have sold at 11c.  Paladdin was purchased in the company, and it certainly helped with Cash Flow last year, to the extent that we wont have a cash flow problem EVER in the business.

His proudest moment though was last year when I asked him to put $20 on the horse in stall 13 (I think it was 13).  And it was a rank outsider but it won!  Only reason I picked it was because I had heard on the radio that morning that most Melbourne Cups had been won by horses starting in that stall.  Sorry fftopic:


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## Mousie (1 May 2007)

wayneL said:


> Great advice Tech,
> 
> Going a bit off topic here, but I certainly notice 2 types of concerned parents.
> 
> ...




Well Wayne, food for thought here...

I'll be ensuring my kids are getting what they need to get set up for life, and am definitely not gonna start giving them each and everything they ask for. Although there's a lot more for me to see and know about life I believe I have seen enough of it to have formulated quite a clear idea of how I want to raise my kids up.

And this is where a personality (disorder?) kicks in: regarding "Type 1", I don't give a rat's ass as to what they choose to do in life, but they better sure as heaven give it their 110%. Nobody is (and will ever be) great without work.


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