We all know raising a family is expensive but what we tend to forget is that some of the biggest expenses for kids come as they get older. It might be helping them with Uni fees, chipping in to help them with a house deposit or helping them buy their first car.
What if there was an easy way to start squirrelling some money away now to help with these expenses down the track?
You guessed it! There is a way, and they are called Investment Bonds.
Moneysmart.gov.au defines an Investment Bond as a long-term investment offered by insurance companies and friendly societies where investors’ money is pooled and invested according to the investment option chosen. There are tax advantages if the investment is held for at least 10 years and other conditions are met.
The beauty of Investment Bonds is that small contributions can be made over the lifetime of the bond and invested within the bonds’ investment choice, with the goal to continually compound its value. Tax is paid within the investment throughout the life of the bond so after 10 years, any withdrawals are generally tax free.
There are some rules, costs, pros and cons attached to this type of investment. It is always important to research the product thoroughly to ensure it is right for your situation and that you understand how it works.
Here at Hunter FP, we are well versed with this type of investment and can provide tailored financial advice for investment bonds and many other investment products. If you would like to have an obligation free consultation to see how we can help your situation, call now to arrange an appointment.