Saving for my kids...

[Value Collector]

So I have 1200 in VAS which is a vanguard Australia index. I should also put some money into the international index also is what your saying?

I would, I have my superannuation set at 50% VAS and 50% VGS (VGS is the global index).

By putting some funds into the VGS you will have exposure to all the big names around the globe, eg Apple, Google, Microsoft, Samsung, Coke, Pepsi, Disney, Walmart, McDonald’s, etc etc etc about 3000 companies in total.

 

[Smurf1976]

By putting some funds into the VGS you will have exposure to all the big names around the globe, eg Apple, Google, Microsoft, Samsung, Coke, Pepsi, Disney, Walmart, McDonald’s, etc etc etc about 3000 companies in total.

Another option to consider would be currency hedged ETF's.

That way you're getting exposure to whatever international market without the risk of the exchange rate moving against you.

 

[Craton]

Insurance Bonds I believe. Simply put, Kids are beneficiaries parent contributes, monthly (?). Day you start at age 3. 10 years contributions then ‘matures’. Beneficiary, kid, can then pay for school or Uni. Invested in what assets/funds the contributor decides, and what the bond offers. Internally taxed at Corp Tax rate, but at maturity no tax to beneficiaries. Contributions set at what the contributor wants at start (eg. $100 Pm), if you want to contribute more in say year 3, at $200pm, you have to stay at $200 for the Term, ie, if you increase the contribution you can’t reduce in the future. This is what I know from my studies, but may be 2 years out of date.
NOT ADVICE, DYOR.
Ginnerguy
(M.FinP)

Thanks mate.
These weren't called Insurance Bonds back in early 1980's. Could start anytime after birth, term length 18, 21 or 25 yrs, had to pick one. Might have been a one off $100 min. to start/open the policy then min. contribution $20 per month which was indexed to CPI adjusted yearly.

Might see if the old doco's are around some place.
Cheers.

 

[Gunnerguy]

Thanks mate.
These weren't called Insurance Bonds back in early 1980's. Could start anytime after birth, term length 18, 21 or 25 yrs, had to pick one. Might have been a one off $100 min. to start/open the policy then min. contribution $20 per month which was indexed to CPI adjusted yearly.

Might see if the old doco's are around some place.
Cheers.

Craton,
Nope I’m talking about Investment bonds also known as child/education bonds. Here in Oz. 10 years to maturity, 30% tax. Minimum generally $500 py. You can increase contributions by up to 125% per year max but have to keep it at that rate for future years.
Gunnerguy

 

[Belli]

Investment bonds

Lifeplan Investment Bond | Australian Unity

A comprehensive, versatile & tax effective investment bond, which can be used to build wealth, without increasing your personal income tax liability.

www.australianunity.com.au

Various options. Some have used, or are using, the LifePlan offer from this provider to avoid estate disputes. I understand the bonds do not form part of the deceased estate and go directly to a nominated beneficiary. A way of trying to negate the vultures descending on the asserts in a Will.

 

[sptrawler]

Insurance Bonds I believe. Simply put, Kids are beneficiaries parent contributes, monthly (?). Day you start at age 3. 10 years contributions then ‘matures’. Beneficiary, kid, can then pay for school or Uni. Invested in what assets/funds the contributor decides, and what the bond offers. Internally taxed at Corp Tax rate, but at maturity no tax to beneficiaries. Contributions set at what the contributor wants at start (eg. $100 Pm), if you want to contribute more in say year 3, at $200pm, you have to stay at $200 for the Term, ie, if you increase the contribution you can’t reduce in the future. This is what I know from my studies, but may be 2 years out of date.
NOT ADVICE, DYOR.
Ginnerguy
(M.FinP)

My one experience with insurance bonds was way back in 1987-88-89 from memory, it was after the huge stock market crash, it was my first venture into market funds.
I waited until the insurance bonds I had chosen showed a glimmer of recovery and bought in, I then watched their unit price go nowhere for three years, while the market recovered heaps.
So I cashed them in, didn't lose anything but didn't gain anything either, so I would say do your research well.
Maybe things have changed, I've never looked at them since, so these days they may be more transparent than they were.
Just my experience, others may have done very well with them.

 

[Gunnerguy]

My one experience with insurance bonds was way back in 1987-88-89 from memory, it was after the huge stock market crash, it was my first venture into market funds.
I waited until the insurance bonds I had chosen showed a glimmer of recovery and bought in, I then watched their unit price go nowhere for three years, while the market recovered heaps.
So I cashed them in, didn't lose anything but didn't gain anything either, so I would say do your research well.
Maybe things have changed, I've never looked at them since, so these days they may be more transparent than they were.
Just my experience, others may have done very well with them.

I looked at them closely 2-3 years ago. They are very different from years ago, more choice for the contributor to select what funds to invest in.
I didn’t like to internal 30% tax rate but that was because my MTR was much lower. For someone in the +45% tax band and very young kids it may be worth looking at.
I believe there are several options available and there maybe something suitable to the original poster.
I’m not an FA, not is this advice, DYOR.
Gunnerguy

 

[Value Collector]

That way you're getting exposure to whatever international market without the risk of the exchange rate moving against you.

Yes, buying into a hedged fund takes away the currency fluctuation risk, which I would recommend if it was a shorter term hold.

However, hedging costs money and this is going to be funded by diverting some of the funds income away from your pocket and into the pocket of those providing the insurance.

So, atleast it my opinion, if you plan to hold the international index for quite a while, it is best to accept the currency volatility and take the unhedged version, and have the currency risk covered by the additional income you will receive.

there is a 50/50 chance the currency might even move in your favour, and create a windfall additional profit on top of your investment profit.

 

[over9k]

Another option to consider would be currency hedged ETF's.

That way you're getting exposure to whatever international market without the risk of the exchange rate moving against you.

GGUS is currency hedged

 

[Belli]

An afterthought. It could be wise if investing on behalf of your children to reinforce they should keep quiet about it. Otherwise they may find they attract undesirables. It can happen.

 

[Belli]

A way of trying to negate the vultures descending on the asserts in a Will.

One vulture who seems to have had her comeuppance.

A lengthy read so only the decision is quoted here.

"Conclusion


100 While the deceased had a general understanding of his assets, his understanding of the value of his assets was far beyond their actual value. He also failed to comprehend or appreciate the claims of the defendant and the two children on his estate on either 13 January 2020 when the deceased gave instructions for the 2020 will or 14 January 2020 when he signed the 2020 will.

101 Perhaps most significantly, given the deceased’s age and medical history, the medical evidence put forth by the plaintiff was insufficient to demonstrate on the balance of probabilities that the deceased had testamentary capacity.

102 The Court is satisfied that the deceased did not have testamentary capacity on 13 January 2020 when the deceased gave instructions for the 2020 will and when he signed the 2020 will on 14 January 2020.


Orders


103 The Court orders that the proceeding be dismissed."

Re Maddock; Bailey v Maddock [2022] VSC 346 (21 June 2022)

Always best to keep an eye on who Grandad (or anyone else for that matter) is hanging around with when money involved - unfortunately.

The audacity of leeches irks me no end.