One fund for long term saving

[justakiwi]

I am thinking about setting up a separate Sharesies account to invest in one fund for my 5 grandkids (combined). I know I could set up kids accounts for them with reduced fees, but to do that I need IDs, parental permission etc etc. I don’t want to do it that way for various reasons. I just want to invest a little each week for them, for the next 10-15 years or more, separate from my own investments. Won’t be telling them about it - will just let it grow and see what happens down the track.

I am thinking USF would probably be the best fund. Comments, feedback, suggestions? Not talking big amounts of money here. Just a way for me to do something for them.

[Pipi]

Great idea. What about TWF Total World Fund - you get a lot of the US in there, plus also exposure to the rest of the world.

[Snow Leopard]

I am thinking about setting up a separate Sharesies account to invest in one fund for my 5 grandkids (combined). I know I could set up kids accounts for them with reduced fees, but to do that I need IDs, parental permission etc etc. I don’t want to do it that way for various reasons. I just want to invest a little each week for them, for the next 10-15 years or more, separate from my own investments. Won’t be telling them about it - will just let it grow and see what happens down the track.

I am thinking USF would probably be the best fund. Comments, feedback, suggestions? Not talking big amounts of money here. Just a way for me to do something for them.

DON'T DO IT!

Either invest if for yourself and leave them a couple of dollars each in your will or put the money to your justakiwi treats (wine/chocolate/bubble wrap to pop) fund.

[justakiwi]

:laugh:

I’m not talking a lot of money. I’m only talking maybe $20 a fortnight or something. Which over 10-15 years would be less than $10,000 invested. But if I picked the right fund, hopefully there would be some growth on top of that. There are a few “It’s complicated” family dynamics involved.

(Could have done with some bubble wrap therapy these past two weeks ;))




DON'T DO IT!

Either invest if for yourself and leave them a couple of dollars each in your will or put the money to your justakiwi treats (wine/chocolate/bubble wrap to pop) fund.

[justakiwi]

True. That could be an option too. Thanks :)


Great idea. What about TWF Total World Fund - you get a lot of the US in there, plus also exposure to the rest of the world.

[couta1]

DON'T DO IT!

Either invest if for yourself and leave them a couple of dollars each in your will or put the money to your justakiwi treats (wine/chocolate/bubble wrap to pop) fund. Remind me again how many children and grandchildren you have? Disc-Have 2 children and 4 grand ones.

[justakiwi]

Four grown kids and 5 grandkids (including a step granddaughter). When I die, whatever I have will be split between my kids. If any of them die before me, their kids get their share. If I drop dead tomorrow my total estate is worth maybe $40,000 (I have no property) so we are talking small bikkies. Quite depressing when I look at that figure but hey, it is what it is.




Remind me again how many children and grandchildren you have? Disc-Have 2 children and 4 grand ones.

[couta1]

Four grown kids and 5 grandkids (including a step granddaughter). When I die, whatever I have will be split between my kids. If any of them die before me, their kids get their share. If I drop dead tomorrow my total estate is worth maybe $40,000 (I have no property) so we are talking small bikkies. Quite depressing when I look at that figure but hey, it is what it is. Its all about your heart not the amount, I like that story in the bible about the widows mite.

[artemis]

Whatever you decide to do, may I suggest you talk to the grandies about it. You are teaching them financial literacy, little by little. Like for example occasionally tell them they own a little tiny bit of company x, choosing a company in the fund that they might relate to. Maybe show them the Sharesies balance time to time and explain why it has gone up and down.

Just talking about a sentence or two now and again. Not a lecture.

I've been working on this in my family for a long time ... getting there.

[stoploss]

Pie Funds , Australasian Dividend fund is on sharsies .
I put some money in this for my kids 8 years ago , a dollar in ( div reinvested) is now $ 3.30 . Very happy.

[justakiwi]

Great idea/advice :)


Whatever you decide to do, may I suggest you talk to the grandies about it. You are teaching them financial literacy, little by little. Like for example occasionally tell them they own a little tiny bit of company x, choosing a company in the fund that they might relate to. Maybe show them the Sharesies balance time to time and explain why it has gone up and down.

Just talking about a sentence or two now and again. Not a lecture.

I've been working on this in my family for a long time ... getting there.

[justakiwi]

I had to Google that - perfect analogy :)


Its all about your heart not the amount, I like that story in the bible about the widows mite.

[justakiwi]

Getting back to which fund - any other suggestions or comments on USF v TWF or maybe even AIF?

[SBQ]

Getting back to which fund - any other suggestions or comments on USF v TWF or maybe even AIF?

For the sums you're dealing with, investment in overseas equities does matter. Sharesies etc. would not care if you're small investor or a big time roller and i'm quite certain (or I would be surprised otherwise) that their USF and TWF funds would be bound by IRD's FIF tax rate. I also would be surprised if any of those overseas invested funds would outperform the other method... for which is to invest in those funds directly.

In a different thread, you may recall I said if you're dealing with small sums... you should buy the index ETFs directly and not through some managed fund structure like USF. Because the key point is FIF does NOT apply for amounts under $50K in value. All the capital gains would be tax free vs under managed funds, they're bounded to FIF and have to pay for it on years of losses. While for yourself that invests directly, you can choose the 'Comparative Rate' method for FIF and pay no taxes on years that you have a loss. Get the picture?

[justakiwi]

I don't understand what you mean by "invest in the index ETF directly." The Smartshares US 500 ETF invests in the Vanguard S&P 500 ETF, which tracks the S&P 500 Index. I can't invest directly into the Vanguard S&P 500 ETF, through Sharesies - only via the Smartshares ETF. What exactly are you proposing that I should do?

EDIT: did you mean “invest in the index directly” - not “invest in the index ETF directly?”


For the sums you're dealing with, investment in overseas equities does matter. Sharesies etc. would not care if you're small investor or a big time roller and i'm quite certain (or I would be surprised otherwise) that their USF and TWF funds would be bound by IRD's FIF tax rate. I also would be surprised if any of those overseas invested funds would outperform the other method... for which is to invest in those funds directly.

In a different thread, you may recall I said if you're dealing with small sums... you should buy the index ETFs directly and not through some managed fund structure like USF. Because the key point is FIF does NOT apply for amounts under $50K in value. All the capital gains would be tax free vs under managed funds, they're bounded to FIF and have to pay for it on years of losses. While for yourself that invests directly, you can choose the 'Comparative Rate' method for FIF and pay no taxes on years that you have a loss. Get the picture?

[SBQ]

I don't understand what you mean by "invest in the index ETF directly." The Smartshares US 500 ETF invests in the Vanguard S&P 500 ETF, which tracks the S&P 500 Index. I can't invest directly into the Vanguard S&P 500 ETF, through Sharesies - only via the Smartshares ETF. What exactly are you proposing that I should do?

EDIT: did you mean “invest in the index directly” - not “invest in the index ETF directly?”

Open yourself an account in the US and send the funds there so you can start trading / buying.
https://interactivebrokers.com/inv/en/main.php#open-account
This is a proper brokerage account and none of the fluff we have in NZ brokerage firms. Their commissions are competitive with again, none of the rip-off account management fees we see by NZ providers. IB also have brokers in Australia if you find having a US account is too far away.

Once your funded and ready to make your investment, the world is your oyster. But since your interest is specifically with Vanguard S&P500 ETF, it's ticker is VOO

https://finance.yahoo.com/quote/VOO

Since it's over $300 USD per share, you'll have to check if they do fractional shares. Also if you're only sending $20/week or so, then it may be a waste of time. I suggest to send much larger sums to make it worth while.

[audiav]

Consider TWF as per others or possibly InvestNow vanguard international AUT (tax implications but low fee). Personally I’m using Simplicity growth for my kids as they have a great ‘Where in the world is my money invested’ section where it tells you beautifully the top 10 portfolio companies with the dollar value. Most are NZ companies so easy to relate to for teaching. You can play around with amounts in the calculator as well.

[justakiwi]

Ok. Not a viable option for my situation.


Open yourself an account in the US and send the funds there so you can start trading / buying.
https://interactivebrokers.com/inv/en/main.php#open-account
This is a proper brokerage account and none of the fluff we have in NZ brokerage firms. Their commissions are competitive with again, none of the rip-off account management fees we see by NZ providers. IB also have brokers in Australia if you find having a US account is too far away.

Once your funded and ready to make your investment, the world is your oyster. But since your interest is specifically with Vanguard S&P500 ETF, it's ticker is VOO

https://finance.yahoo.com/quote/VOO

Since it's over $300 USD per share, you'll have to check if they do fractional shares. Also if you're only sending $20/week or so, then it may be a waste of time. I suggest to send much larger sums to make it worth while.

[justakiwi]

Simplicity is great. I am with their KiwiSaver but their $5000 minimum deposit for their investment funds, is way too high. I have talked to them about it and they have said "watch this space" so I think it is something they must be planning on changing.


Consider TWF as per others or possibly InvestNow vanguard international AUT (tax implications but low fee). Personally I’m using Simplicity growth for my kids as they have a great ‘Where in the world is my money invested’ section where it tells you beautifully the top 10 portfolio companies with the dollar value. Most are NZ companies so easy to relate to for teaching. You can play around with amounts in the calculator as well.