Bonding With My Kids

Hi Scott,

In a previous article called ‘Time to Think of the Kids’, you outlined an investment bond strategy which would work well for our two kids, who are four and six. After researching it I'm not sure how to go about investing in bonds. Are you able to point me in the right direction? Also, do you think this is still a sound approach given the current low interest rates? Thanks for your help and your articles, which are the only financial information my wife pays attention to!

Tony

Hi Tony,

Excellent question. The word ‘bond’ throws people off. Your ‘investment bond’ doesn’t actually have to invest in bonds -- and in fact, given it’s a long-term investment for your kid, I wouldn’t advise it. Instead, you can choose to make the underlying holding a managed portfolio of shares. Lifeplan has a range of options that since 2008 have returned around 8 per cent for international shares and 10 per cent for Aussie shares.

Scott