SETTING CHILDREN up for life

We've partnered with New Zealand's low-fee, nonprofit KiwiSaver provider Simplicity to answer your financial questions Co-founder and financial commentator Amanda Morrall talks about nest eggs for children

Why is it important to consider investing for my kids? 

Compounding returns! It’s a kid’s best friend, so the earlier you start investing on their behalf, the better off they’ll be when they need it. Any parent who took advantage of the $1000 KiwiSaver kickstart on behalf of their kids (which the government removed in 2015) and then regularly contributed over the years will know that. From birth, $1000 invested with $5 a week regular contribution over 18 years could be worth more than $9000 before tax and fees (nearly $6000 after factoring in 2% annual inflation), assuming a 4.5% annual rate of return. Compounding returns is when returns are earned on both the principal amount and any accumulated investment earnings generated by that principal amount. It is an important concept in investing and can help your money grow faster over time. 

Where do I begin?