A growing number of Australian children are being introduced to the investment world, according to a new study from Finder.
According to Finder Parental Report 2021, who surveyed 1,033 Australian parents of children under 12, 7% of children – the equivalent of 270,000 Australian children – have a stock trading account in their name.
The survey also found that 2% of children under 12 have a cryptocurrency account in their name.
Finder investment expert Kylie Purcell said it’s never too early to introduce kids to key wealth concepts like investing.
âFinancial literacy is often something we don’t learn until we finish school. While teaching children about saving and budgeting is essential, the concept of investing is also important.
âStarting an investment fund early on is a great way to teach your kids the concepts of wealth accumulation and compound returns over time. “
Although you must be 18 or over to buy and sell stocks, parents can open minor accounts in their child’s name. This means that stocks and ETFs are owned by the child, but cannot be accessed until they are of legal age.
âGenerally, for tax reasons, it is not a good idea to hold investments directly on behalf of a child under the age of 18.
âThey can only earn $ 416 per fiscal year tax-free. Once you go over that amount, you can be hit with high tax rates of up to 66%.
“The tax implications of investing for your children are complicated. When in doubt, a conversation with an accountant can save you a lot of heartache,” Purcell said.
Purcell said parents need to oversee their children’s investments.
âTake the opportunity to educate them on the importance of not putting all your eggs in one basket, but rather spreading their money across different funds and businesses.
âIf you are investing small amounts of money, microinvestment apps like Raiz are ideal because you won’t face large brokerage fees and you can let your child invest their pocket money.
âIf you are looking for a full stock trading account, CMC Markets and SelfWealth are great options to consider. They recently won top awards for Best overall stock trading platform and Australian Equity Trading Account at the Finder’s Investment Awards 2021. “
The Finder Investment Awards 2021 recognize the best Australian and international equity trading platforms and accounts. The awards cover a number of categories for different levels of investors, including the best Share Trading Platform for new investors.
Finder’s survey found that more than half of children under 12 (58%) have a savings account.
Children of Generation Y parents are more likely to have a stock trading account (7%) or a cryptocurrency account (2%) than those of Generation X parents (5% and 1% respectively).
However, children of Gen X parents are the most likely to have a savings account (66%), compared to those of Gen Z parents (53%).
|Does your child have any of the following?||%|
|Stock trading account||7%|
|Cryptocurrency trading account||2%|
|none of the above||37%|
|Source: Finder’s Parenting Report 2021 of 1,033 parents of children under 12|
Are you looking for an easy way to buy and sell stocks? Discover the winners of the Finder Investment Awards 2021.