Investment for children

With rising costs and increased learning needs, financing our children's education is no longer a simple walk in the park. Discuss with other parents about how they are managing their finances to cope with their expenses.

Investment for children

Postby ngl2010 » Sat Mar 16, 2013 8:21 am

I always feel heartache when DS spends his leftover pocket money, ang bao money, etc buying Vanguard cards, Lego, etc. After a while I can see that the money spent on those items is actually a lot.

I am thinking of "persuading" him to invest the money. What kind of investment is suitable for him? He is only 12 years old and I don't want a too risky investment. I am thinking of govt bonds but not really sure...

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Re: Investment for children

Postby slmkhoo » Sat Mar 16, 2013 8:55 am

How much savings would he have? I don't know much about investments, but don't you need a fairly big sum to start (more than a child might have available)? Does he have a bank account? Is he allowed to draw from it at will? What we do with our kids is that most of the money they get in gifts, hongbao etc is deposited in their bank accounts which they cannot access without my permission. We allow them to keep what we regard as a fair amount for spending on whatever they want. My husband has taken some of their bank money (with their agreement) and has amalgamated it with our family investments as bank interest rates are so low. We have told them that we will return the amount plus gains when they reach university age or when they become independent of us (whichever comes first!).

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Re: Investment for children

Postby ngl2010 » Sat Mar 16, 2013 9:36 am

He has a bank account and he is not allowed to draw it at will. However, he does not put his money into that account as he thinks ang bao money and his leftover pocket money and other money gifts are his money to spend.

I am not sure what is considered as a fairly big sum to start investment. How much is required to start an investment? My purpose is for him to save and grow his money so that he would have enough money for HDB downpayment in 15 years time. He currently has a low 5 digits savings. Property will be very expensive in 15 years time. It is very difficult for me to explain to a 12-year old boy to save in order to buy his own property. But he likes to see his money increases every month so I am thinking of setting up a separate investment and let him receive monthly statement so he can see how his money grows.

I am bad at investments. I ever used his money to invest in foreign currency and the value had gone down. So, I am looking for a conservative investment. Any suggestions?

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Re: Investment for children

Postby Harlequin » Sat Mar 16, 2013 10:03 am

Bonds with AAA and above rating are relatively low in yields.

Maybe you can try to source some blue chips stock to kick start?

However, as he is not yet at the legal age to have his own trading account, he has to park his investment with you, and it becomes part of your estate, and as like any other of your assets, it's subject to liabilities. (you know what I mean.... :xedfingers: ) Have to take this into consideration.

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Re: Investment for children

Postby ngl2010 » Sat Mar 16, 2013 10:42 am

Harlequin wrote:Bonds with AAA and above rating are relatively low in yields.

Maybe you can try to source some blue chips stock to kick start?

However, as he is not yet at the legal age to have his own trading account, he has to park his investment with you, and it becomes part of your estate, and as like any other of your assets, it's subject to liabilities. (you know what I mean.... :xedfingers: ) Have to take this into consideration.

I am bad in picking up stocks leh.... Most of my stocks lost money... :cry:

It is not my money so I will feel extremely bad if he loses his money...

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Re: Investment for children

Postby Harlequin » Sat Mar 16, 2013 10:49 am

ngl2010 wrote:
Harlequin wrote:Bonds with AAA and above rating are relatively low in yields.

Maybe you can try to source some blue chips stock to kick start?

However, as he is not yet at the legal age to have his own trading account, he has to park his investment with you, and it becomes part of your estate, and as like any other of your assets, it's subject to liabilities. (you know what I mean.... :xedfingers: ) Have to take this into consideration.

I am bad in picking up stocks leh.... Most of my stocks lost money... :cry:

It is not my money so I will feel extremely bad if he loses his money...


Choose bluechips with steady dividend payout if you are looking for long term (5yrs and above).

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Re: Investment for children

Postby ngl2010 » Sat Mar 16, 2013 10:58 am

Harlequin wrote:
ngl2010 wrote:
Harlequin wrote:Bonds with AAA and above rating are relatively low in yields.

Maybe you can try to source some blue chips stock to kick start?

However, as he is not yet at the legal age to have his own trading account, he has to park his investment with you, and it becomes part of your estate, and as like any other of your assets, it's subject to liabilities. (you know what I mean.... :xedfingers: ) Have to take this into consideration.

I am bad in picking up stocks leh.... Most of my stocks lost money... :cry:

It is not my money so I will feel extremely bad if he loses his money...


Choose bluechips with steady dividend payout if you are looking for long term (5yrs and above).

Other than stocks and bonds, what other things can he invest in? Gold, unit trust, land banking? What else?

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Re: Investment for children

Postby Harlequin » Sat Mar 16, 2013 11:11 am

ngl2010 wrote:
Harlequin wrote:
ngl2010 wrote:I am bad in picking up stocks leh.... Most of my stocks lost money... :cry:

It is not my money so I will feel extremely bad if he loses his money...



Choose bluechips with steady dividend payout if you are looking for long term (5yrs and above).

Other than stocks and bonds, what other things can he invest in? Gold, unit trust, land banking? What else?


Nooo.... :scared: no gold and land banking!! (Gold- not now. Land banking- too risky.)

Unit trust is more complex than buying stocks, other than commissions and management fees payable, there are other things to note, eg. some unit trusts stipulate that the dividends have to be use to purchase more units... so, you can get your cash only when you redeem partially or full. Your position/s is vulnerable when markets hit a major correction.

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Re: Investment for children

Postby slmkhoo » Sat Mar 16, 2013 11:12 am

ngl2010 wrote:Other than stocks and bonds, what other things can he invest in? Gold, unit trust, land banking? What else?

I don't know much about investments as my husband handles that for our family, but how about him 'investing' with you? You can set up an account with him, then pay a higher rate of interest to him than the bank. He will be able to see it grow, which is what you want. Or you can do a dollar-matching scheme that for every x dollars he saves, you give him some percentage of that amount.

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Re: Investment for children

Postby Harlequin » Sat Mar 16, 2013 11:19 am

Frankly, IMHO, 12yo is too young to start any investment... I know this is against all the gurus advice. :lol:

What I am trying to say is, anyone without any incomes should not subject their savings to any form of investment risks.

Often, we only think of how to grow our money, but not well informed of the associated risks.

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