Mini moguls: 1 in 3 Aussie parents invest for their kids future
The next generation is in good hands with millions of parents investing on behalf of their children, according to a report by Finder.
Finder's Wealth Building Report revealed 34% of Aussie parents have bought shares or other investments for their offspring.
That's at least 2 million kids who are sitting on investments worth potentially thousands.
The report found 7% of parents did so as a 'once off' when their child was born, while 12% invested on their child's behalf on special occasions such as their birthday and Christmas in lieu of presents.
Roughly 1 in 7 parents (14%) invested regularly – some monthly – to help their offspring get ahead.
Graham Cooke, head of consumer research at Finder, said some Aussie kids are unknowingly sitting on pots of gold.
"Most parents want their children to have the very best head-start in life they can – it's encouraging to see so many making kid-vestments.
"With enough time, even small amounts invested on behalf of a child will amount to a tidy fund.
"It could one day be a substantial help with university fees or a first home deposit or as a future income stream if they continue to add to it.
"Regular contributions invested over the long term can far surpass what can be generated through saving cash in a high-interest savings account."
Putting money aside for the kids' investments is most common (38%) among households earning $50,000–$99,000, slightly above the higher income bracket of $100,000-$250,000 (34%).
Finder analysis shows $15,000 invested for 15 years returning an average of 8% could turn into more than $49,000.
"That's a pretty amazing gift to hand over for their 18th birthday."
Cooke said parents can have a huge impact on their child's financial future whether or not they have the spare change to invest.
"You don't have to be a millionaire to impart good financial literacy skills.
"Whether it's a discussion on pocket money, saying no to impulse purchases and explaining why, or even switching the lights off to save money on electricity, parents are laying the groundwork for their youngsters' financial future."
Cooke said to be aware of fees that can eat into the returns of their child's investments.
"Avoiding fees and charges will maximise any money that they will have once they turn 18.
"Remember, if your child holds shares – or an interest-earning savings account – in their name and earns more than $416 in investment income during a financial year, you'll need to lodge a tax return on their behalf."
Do you invest on behalf of your children?
| Yes, once off when they were born | 7% |
| Yes, on special occasions such as their birthday and Christmas in lieu of presents | 12% |
| Yes, regularly (e.g. monthly) | 14% |
| No, I have never invested on behalf of my children | 66% |
| Finder survey of 1,013 Australians, 387 of which were parents, September 2024 |  |
Where does Australia's wealth lie and how are we growing our wealth? Check out Finder's Wealth Building Report.