Financial literacy has come to the forefront amongst parents, who are valuing more and more the importance of their children understanding finance.
CEO and co-founder of investing platform Superhero, John Winters pointed to the benefits of saving for children.
"I think it's important to look at how child wealth is created," Mr Winters said.
"If you if you put money in your bank account and you save it, over time you build up a store of cash.
"But it's never really going to grow. So I think it is important young parents, people with with kids, to really start thinking about how they can grow that sort of nest egg, and how you know how that can really set up your kids for a successful future."
Superhero's minor account allows parents to invest in ETF, ASX and US shares for their children by making small regular deposits over time to grow a healthy amount of savings for when the child turns 18.
Mr Winters told Savings.com.au parents setting up a Superhero Minor Accounts are using it as a way of teaching their children about investment and financial literacy.
"I know some people who have set up minor accounts for their kids and, and sat down with them and spoken to them about what it means," he said.
"In some cases we've seen kids say, 'I want to buy shares in Roblox' because that's what they play.
"And if you look at the business model, it's actually quite an interesting business model, with huge global growth.
"So they're investing in what they've already sort of invested their own time in, and it comes back to that financial literacy, and being able to, even from a young age, give people that understanding of money and long term growth."
How to Set up a free Minor Account with Superhero
A Superhero minor account allows you to invest for your children.
You must be 18 years old or over to legally buy and sell shares in Australia.
With Superhero, you will be able to trade ASX, ETF and US shares in your child's name until they turn 18.
When they turn 18, they can then have the funds transferred to their own Superhero account through an off market transfer.
You can set up regular deposits when you get paid, or on their birthday etc.
Australian trades with Superhero have a $100 minimum with $5 brokerage fees and US shares have a $50 minimum.
Steps for setting up a minor account:
- Click on the ‘Profile’ tab within your Superhero account.
- Click ‘Add Account’ followed by ‘Minor Account’ on the top of the page.
- Fill out the required fields and click ‘Create Account’.
What are parents using it for?
Mr Winters said one option is to pay off important life costs for your child.
"If you do have that long term focus, where you really are sort of buying good quality investments and and sort of setting and forgetting, it does give you that opportunity to build up a sizable amount of wealth that you can use for school fees or for university costs or a first car," he said.
Mr Winters also told Savings.com.au that ETFs are popular amongst parents investing for their children.
"When you're investing over the long term, with an ETF you don't need to worry about an individual company doing really well or maybe not doing so well," he said.
"It does give you that diversification so that they are they are very popular."
Image by Ben White via Unsplash