Every parent wants their children to have a better life than they have had.
For mother of two, Claire Kidd, she plans to achieve that by investing on her children’s behalf.
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Here’s how she’s doing it.
Investing using Six Park and Raiz
Kidd, a business communications coach, told Yahoo Finance she has been on the hunt for a low-cost and equally low-effort way to invest for her children.
Both she and her partner are British expats living in Australia, so their families often send over money for the children. She wanted to maximise the cash and chose to begin by investing with Raiz.
Raiz is a micro-investing app that allows users to invest their spare change by rounding up purchases. Essentially, it means if an investor bought a $3.50 coffee, the app would round it up to either $4 or $5, depending on the investor’s chosen roundup, and that money then invested.
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Investors can also choose to top up the investment through deposits.
Kidd and her partner choose to deposit between $400 and $500 per month, in addition to any cash their family gives their kids for their birthdays.
“I … wanted to highlight (because I think this is important for other families to understand) that the micro-investing and the top-ups we add to Raiz are not necessarily huge amounts,” she said.
“I think so many people assume that you have to have thousands and thousands to invest – which of course is also great! – but starting small and early was key for us to take advantage of the compound interest on the accounts.”
They began investing with Raiz in January 2016, a few months after their first daughter was born, and have since seen a return of nearly 40 per cent. That’s made up of both reinvested dividends and market returns.
When the couple hit around $15,000 invested through Raiz, they decided they could make their money work harder by using another platform in addition to Raiz.
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They decided on investment management platform Six Park. Now, whenever their investments through Raiz hit $5,000, they sweep the money over to Six Park.
They started investing with Six Park in November 2020, choosing to invest in a sustainable share portfolio. They’ve seen a nearly 6 per cent annual return.
For Kidd, the combination of the two platforms is a winner.
She gets to maximise the spare change and gift money that’s on the table through Raiz, then take it even further with Six Park.
“It’s just like, why isn’t anyone doing this?” she said.
They’re also happy to leave the investments as a set-and-forget money plan.
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“It’s just that compounding effect that we’re taking advantage of now,” she said.
When their children, aged three and four grow older, they may reassess their asset allocation and invest more aggressively, but for now they’re happy to let the market do the work.
“We want it to be their legacy for them, and for their grandparents to know that they’re contributing to something that’s going to be around for a long time.”
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