With the ever rising cost of living, spike in debt-to-income ratios, and intergenerational shrinkage of stable income (the list goes on), it’s no surprise that many parents are becoming increasingly worried about what the future holds for our little ones. With this in mind, many Aussie families are turning towards smart investment choices to ensure the future comfort of their children in today’s uncertain times.
However, with so many potential investments to choose from, finding what works best for your family unit can become slightly overwhelming. So, if you’re scratching your head and wondering which investments will make the most sense for your unique circumstances, we’re here to help.
Here are 5 investments that are becoming increasingly popular with Aussie families.
1. Education Bonds
It’s no secret that education costs a bomb, especially in this day and age. For families who are looking to fund their children’s education without the burden of immediate debt, education bonds are truly a fantastic investment choice. Through education bonds, families are able to invest a capital lump sum or monthly investments that allow them to plan ahead and contribute to their children’s education over an extended period. Not to mention, they are incredibly tax-effective and provide access to funds at any time.
However, education bonds can be a little intimidating for families who are new to the game, which is why it’s always a good idea to work with a financial planner if you are interested in this type of investment.
2. Managed Funds
Another investment that’s been on the up and rising amongst Aussie families are managed funds. Simply put, a managed fund is a type of investment where your money is pooled together with other investors. This money is then managed by a fund manager to create a diversified portfolio that may include shares, bonds, cash and many more.
So, why exactly would one choose a managed fund over another type of investment? Well, it all boils down to easy diversification without having to actively manage individual assets. This makes it a great choice for families who are busy and prefer a hands-off approach to investing.
3. Real Estate
Considered one of those ‘safe investments’, putting your money in real estate is rarely ever a bad idea. For many Aussie families, investing in one or two properties can provide the comfort of a predictable cash flow, numerous tax advantages, and long term capital gains. Not to mention, with the current rental crisis that is truly alive and well in Australia, even more families are turning towards real estate to secure stable and reliable income.
Ultimately, real estate doesn’t just ensure a steady income stream, but can also be easily passed down to the next generation for wealth preservation. Parents can rest easy knowing that their children are provided for down the line, whether that be through rental income or simply a comfortable home to live in.
4. Stock Market Investments
We know what you’re thinking: stock markets are complicated, high risk and far too much stress for a growing family. Well, we’re here to help you change your thought process. In reality, stock market investments don’t always have to be intimidating. In fact, they’re a great choice for families looking to secure long-term capital growth and handsome dividends.
For example, exchange-traded funds (ETFs) provide a user-friendly gateway to the stock market, without the higher risk levels associated with individual stock picking. Families can also choose ETFs that align with their goals and values, ranging from renewable energy, technology, or global markets, amongst many others.
5. High Interest Savings Accounts
Often overlooked, high-interest savings accounts are yet another fantastic (and most importantly, easy) investment option for Aussie families. Rather than keeping all your funds in a checking account, transferring a portion to a high-interest savings account can be a great way to accrue some extra dollars and cents without having to lift a finger.
Fortunately, there are a ton of different high-interest savings accounts to choose from in Australia, with Bankwest and Macquarie leading the pack with their 4.5 – 5.5% interest rates. Moreover, many banks also offer zero penalties for withdrawals, ensuring that you have access to funds whenever you need them. This can be a better option for families who prioritise liquidity, compared to other options like term deposits.
And there you have it — 5 investments that are transforming how Aussie families think about building wealth and securing their financial futures. At the end of the day, it’s all about making your money work for you, and not the other way round. So, be sure to do your research and choose the investments that align with your family’s long-term vision. All the best and happy investing!
