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5 great growth stocks to buy before your child’s first birthday

Creating significant, life-changing amounts of money isn’t as hard as some people expect it to be.

In fact, I showed in this article, that $10 per day could turn into over $1.2 million in just 32 years, by investing in the stock market. It’s no wonder why Albert Einstein called compound interest, “the eighth wonder of the world.

As long-term investors, time is truly on our side and what might appear just a modest amount today could turn into an early retirement for you, or your child in the future.

That’s why I believe starting early is a fantastic thing to do.

For example, let’s say you deposit $500 on your child’s birthday into a bank account paying 5% interest each year until their 18th birthday. At the end, you’d have $14,066 in the account.

Now, let’s say you’d invested that money in the stock market instead. Reinvesting profits. The Australian market has, historically, returned around 12% per year.

From investing the money, the final figure would be $27,875. Meaning, you’d almost double the money by saving and investing.

If you could continue doing it until their 50th birthday, the amount becomes $1.2 million.

Not a bad return for less than $10 per week.

5 stocks I’d buy for my child

If I wanted to do the same thing for my child, I would start by buying companies like Ozforex Group Ltd (ASX: OFX), Collection House Limited (ASX: CLH), InvoCare Limited (ASX: IVC), Slater & Gordon Limited (ASX: SGH) and Nearmap Ltd (ASX: NEA).

Each are profitable and have exceptionally long runways for growth. In 18 years’ time, I’d be willing to bet they’re going to be stronger and more profitable businesses than they are today.

However, there's one more stock which I think might be an even better bet for your child's future. Our top analyst, Scott Phillips, recently identified this cheap but growing small-cap ASX stock which has a 6.3% grossed-up dividend yield. If you're interested in knowing its name, just click on the link below, enter your email address and we'll send you the FREE report on his top dividend stock idea for 2014 - 2015! It's FREE.

The Motley Fool's #1 dividend stock for 2014 - 2015

Motley Fool Contributor Owen Raszkiewicz owns shares of Slater & Gordon. The Motley Fool owns shares of OzForex Group Ltd.   

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