How to buy shares for a child

TL;DR

Learn how to invest for your children or grandchildren, starting with as little as $500, to help secure their future financial goals.

Transcript

hi my name is Olivia Claire and I'm a financial advisor here at consortium Private Wealth this is my first video so they say there'll be a fair bit of AI bubbles and not sure where to look and maybe a few arms thrown in here and there hopefully over time my um videos will be a bit fine-tuned as well as Rob gaudi's and Ashley Rollins are so thank yo... Read More

Key Insights

• 🥅 Investing for minors is gaining popularity to provide financial security for their future goals, such as education or homeownership.
• 🍉 Starting a share portfolio with as little as $500 can offer excellent long-term growth opportunities for minors' investments.
• 🥹 Setting up a trading account in an adult's name, holding shares in trust for the minor, is a practical and simple approach.
• 🚕 Tax implications should be considered, including the completion of a minor's tax return and franking credit refunds.
• 🧑 The adult managing the account should avoid using the portfolio or dividends for personal purposes to prevent complications with the Australian Tax Office.
• 👶 Ownership of shares can be easily transferred to the minor by creating a new trading account in their name and initiating off-market transfers.
• 🤗 Seeking advice from a financial advisor can assist in opening the share trading account, making investment decisions, and providing additional investment advice.

Questions & Answers

Q: Why should I consider investing for minors?

Investing for minors provides an opportunity to secure their financial future, whether it's for a first car, home, university fees, or other significant milestones.

Q: How do I set up a share trading account for a minor?

To avoid the need for a formal trust, the most common approach is to create an account in the name of the adult, who becomes the legal owner of the shares while holding them in trust for the minor.

Q: Are there any tax implications for minors' investments?

Yes, tax implications exist, such as the need to complete a tax return for the child if they earn over a certain threshold or are entitled to a refund on franking credits.

Q: How can ownership of shares be transferred to the minor in the future?

By creating another online trading account in the child's name, the existing shares from the original portfolio can be transferred through off-market transfers.

Summary & Key Takeaways

• Olivia Claire discusses the growing interest in investing for minors, as parents and grandparents seek alternatives to low-interest bank accounts.

• Creating a share portfolio is an effective long-term investment strategy to build a modest nest egg for minors.

• It is possible to set up a trading account in the name of an adult, holding shares in trust for the minor, with no minimum age requirement.