I'm Mike and my daughter just had a son - my first grandchild, and my son is about to have a child. So I'll have two grandchildren shortly and I've been thinking about how I can help them from this early stage in life, have a more secure financial future
When I was a parent, we were working hard, we didn't have a lot of disposable income. We didn't have the opportunity to set our kids up to get them financially stable by the time they were twenty years old but as a grandparent, I can possibly contribute something towards it.
I'm not a wealthy person but a small gift every month into an account for them accumulates and grows as they grow.
So, I first considered a savings account and um I dismissed that because the couple of disadvantages with a savings account.
Firstly, the return is not great and secondly, at eighteen years old, my grandchild can access it and they could spend it on some frivolous commodity that they don't really need but they think they need at the time and I'm putting it in there to try and give them some security for their long-term future not just giving them some disposable income for when they turn eighteen.
The advantage of setting up a super fund for a baby
is that they're going to have a twenty-year head start. So, in other words when they are twenty years old they're going to have a nineteen or twenty-year-old super fund.
Second is, the return is far greater than a normal savings account under normal circumstances and so, it's going to grow more quickly and the third point is that it's not accessible to them when they get to eighteen.
So they're not going to have access to spend it frivolously on some you know some items that are of no real value.
It's going to be carried on through their lives and give them financial stability later on in life. It's a twenty-year kickstart to a lifelong super fund that just hasn't been available up to now.
You know, as a grandparent, I'm really excited about this because it's going to make a meaningful difference to my grandchildren's futures.