The wealth playbook Aussie kids inherited is broken

"Get on the property ladder as soon as you can."

It's the advice that's been passed down at kitchen tables across Australia with the same confidence as a family recipe.

For decades, buying property has been a reliable formula for building wealth, how security is a way to help give your children a better start than you had.

For many years, the advice was largely correct. But for the generation now trying to make it a reality, the math has stopped adding up.

Recent research from Propertyology found the average value of the main residence for Australian households has risen about 560% over the past 25 years. This is significantly further ahead of the increase in the average income for Australians in that time.

This means the vehicle most Australian families relied on to build and pass on wealth has become, for many young people, the single biggest barrier to starting at all.

The advice hasn't changed. But the Australia it was written for has.

The data paints a stark generational picture.

Baby Boomers hold the highest net worth of any generation while Gen X households have the most wealth in property and shares. Millennials, by contrast, carry significant mortgage debt, student loans, and the rising cost of simply getting started.

They are not behind because they are less capable. They are behind because the asset prices that made their parents wealthy are now the barriers preventing the same story from repeating.

And yet, something else is happening beneath the surface.

Younger Australians are not disengaged from wealth creation - they are engaging differently. According to the ASX Australian Investor Study 2023, 43% of Gen Z already hold Australian shares. They are also the cohort most likely to hold ETFs (33%), invest internationally (25%), and hold cryptocurrency (31%). Far from being financially apathetic, they are digitally fluent and globally minded in how they approach investing.

Millennials, often described as the "bridge generation", are reinforcing that shift. The same study shows they favour ETFs and digital investing platforms, prioritise risk awareness in decision-making, and are more likely than older generations to factor ESG considerations into their investment choices. They sit between the property-driven wealth model of their parents and the diversified, digitally enabled portfolios of their children.

Alongside property, long-term share market investing has quietly delivered strong returns for decades - without attracting the same cultural reverence.

The difference is that most Australians haven't been invited into that conversation early enough for it to matter.

Minor investing matters more than ever

Over the past few years, CMC Invest has seen an increase in parents reaching out about Minor Trust Accounts as ways to invest for their children's future and ensure they have a financial jumpstart once they reach adulthood.

That interest is not theoretical. The Finder Wealth Building Report (September 2024 survey) found that around 34% of Australian parents have already bought shares or other investments for their children. Behaviour is shifting.

Accounts designed to build future savings for your kids, provide a unique bridge between a standard savings account and a formal family trust. However, parents should be aware that minor trust accounts may have different tax treatment depending on the structure and income generated, and it may be worth seeking independent advice to understand any potential implications.

But beyond supporting your children with a nice nest egg, investing for your kin can help set them on a path to lifelong financial success.

1. Financial literacy that sticks

Research has found that from a young age, children can begin to grasp delayed gratification, risk, and the relationship between decisions today and outcomes tomorrow. If you bring your child along on the journey of their investing account, it can serve as a practical teaching tool where they can see their balance grow.

At the same time, it provides a natural opportunity to explain that investments can rise and fall in value and that outcomes are not guaranteed. Strong financial habits formed early tend to be the ones that last.

2. Time doing the heavy lifting

The single most powerful variable in long-term investing is not stock selection or market timing, it is duration.

An investment started early and held consistently can represent the difference between a meaningful asset base and a standing start. While time can help smooth out short-term volatility, investments can still experience periods of loss and should be approached with a long-term mindset. Starting early is not a nice-to-have - it is the whole strategy.

3. A head start

A young adult facing a uni degree, a rental bond, a house deposit or simply the desire to head overseas for a holiday before settling down needs capital.

A minor investing account, started early and contributed to consistently, can become the financial foundation for all of those moments.

4. Accessibility

Modern investing platforms are professional, slick, and user friendly - making it straightforward for anyone interested to open an account, contribute flexibly, and access thousands of local and international shares and ETFs and crypto with low or no brokerage on many markets.

The barriers that once made this feel like a product for the wealthy have largely fallen away in recent years making it more accessible than ever.

A changing landscape

The shift we are seeing across investing from different Australian generations is not about decline but change in how we invest, our financial strategies, but also in opportunity and accessibility.

For most of modern financial history, investing for a child's future required wealth to begin with. That is no longer true.

The ability to give a child a real stake in the global economy is now available to Australian families of all shapes and sizes in a way it never has been before.

As with any financial decision, it's important for families to consider their circumstances and understand both the potential benefits and the risks involved.

Minor investing accounts will not solve every challenge currently facing young Australians. But they are a practical, and now widely available tool, to give our kids something no amount of advice can substitute for: a head start, a foundation, and the knowledge that someone invested in their future before they were old enough to do it themselves.

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