Ask Paul: Where can we start investing for our newborn?


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We have recently had a baby boy and would like to set up some form of investment or account where we will deposit money on a regular basis.

Our intention is that he will access it later in life.

What do you suggest would be a suitable course of action that has limited risk but will tick over until the time comes? - Rob

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A. What a great idea, Rob!

My parents did this for me from birth with not a lot of money each year and in my mid to late 20s it made a huge difference to buying a home and starting my business.

We did the same with our three kids and are about to do it again with our new grandchild.

I suggest an exchange traded fund (ETF) where you can make regular contributions.

The huge and very low-cost managers such as Vanguard and BlackRock are an easy way to get a global or balanced-type fund.

Dollar cost averaging and compound returns will do the heavy lifting for you.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.