What do you get your one-year-old for their first birthday? Let’s be honest, they already have everything they need – and they won’t remember it anyway.
That’s what I was thinking as I browsed the usual toys and games before my daughter’s birthday. I realised I wanted to give her something more valuable. Something that would grow with her over time.
That’s when it hit me: why not open a managed funds account for my daughter? While it won’t mean much today, it can grow over time to help with travel, university, her first car or even her first home – it’s an investment in her future.
It’s easy to get started
Opening a managed fund account was easy. I hopped on to the Fisher Funds website and downloaded the Product Disclosure Statement with the application form, completed it and emailed it back. Within three days, my daughter’s account was ready.
We chose to deposit the minimum lump sum of $2,000, but you can also start from scratch and make regular contributions from as little as $100 a month. It’s up to you. We chose to make both a lump sum and regular contributions.
With our $2,000 deposit and weekly contributions of $50, this little nest egg could grow to almost $58,000* over 17 years.
Growing the gift over time
Since the goal was saving for her future over 17 years, we chose a growth fund for our daughter. Growth funds are typically more volatile but offer higher returns over time, which aligns with our goal of giving her a financial head start when she turns 18. Since we’re investing for the long term, we can afford to take on more risk, knowing there may be some short-term ups and downs. In the long run, this approach should help maximise her potential investment returns. Once she’s old enough to access the money, she can choose the best option for her.
Little and often over time
The best thing about opening an account now, is the power of time to grow our daughter’s savings. Regular contributions are manageable right now, and her money is working hard for her with returns compounding over time.
When she’s old enough to understand, we can tell her about the account and start teaching her how good savings habits can add up to make a big difference in the future. So, not only can we give her a financial head start, but we can set her up for success, understanding the importance of saving.
Happy birthday, today and tomorrow
Looking back, we couldn’t be happier with our decision to open a birthday account for our daughter. It was easy to set up, and it’s flexible enough to change our contributions if we need to. Best of all, it’s simple. Like everyone, we’re busy parents so this is a set and forget that will tick away for our daughter’s future. That’s why we think it’s the perfect birthday gift.
Thinking about opening a managed funds account for your child?
You can learn more about Fisher Funds Managed Funds, or if you’ve still got questions, request a call from one of our advisers, or get in touch with our team – we’ll be happy to help you out.
* Using the FMA’s rate of return for a growth fund of 4.5% and adjusted for inflation at 2% p.a.
