MENU

3 shares I’d buy for my children

Buying shares for your children could be the best way to set them up financially in the future. Allocating a smaller amount now and letting compounding work its magic should be better for your finances in the long run.

If you’re buying shares for your children they will need to be long-term ideas and also hopefully teach them some sort of investing lesson(s). This could either mean general investment principals or something more specific.

Here are three that I’d choose:

Greencross Limited (ASX: GXL)

One of the best ways to teach kids about investing is starting with something they can understand. Most households have a pet so the family will very likely go to a local Petbarn owned by Greencross, perhaps they also go to a Greencross vet.

Learning that you can make a little bit of money each time you go to the pet store could spark an understanding of how investing works. It also helps that Greencross is trading cheaply at 12x FY19’s estimated earnings and it has a growth strategy for the future with co-location and online sales.

Australian Foundation Investment Co. Ltd. (ASX: AFI) (AFIC)

AFIC is Australia’s largest listed investment company (LIC), its sole purpose is to invest in other shares mainly listed on the ASX. It has been operating for nearly a century, showing that you can invest in it for the ultra-long-term.

Some of its top holdings include Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), BHP Billiton Limited (ASX: BHP), CSL Limited (ASX: CSL) and Wesfarmers Ltd (ASX: WES).

It has a pretty diverse portfolio, it has a low management fee of 0.14% per annum, it has maintained or increased its dividend over the past two decades and it currently has a grossed-up dividend yield of 5.7%.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

This is an exchange-traded fund (ETF) that provides exposure to the biggest companies in the world outside of Australia. It has a low-cost management fee of 0.18% per annum.

It’s hard to think of many shares that offer a more diverse portfolio than this one. It has nearly 1,600 holdings, some of its biggest ones are Apple, Microsoft and Alphabet (Google) – a kid would probably use something provided by these three companies every day.

Foolish takeaway

A child would become very wealthy by just investing into the Vanguard ETF over the long-term, so spreading the money across these three ideas would be a good strategy.

Want more ideas to buy for a child? Some of these top stocks would make good long-term investments.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison owns shares of Greencross Limited. The Motley Fool Australia owns shares of and has recommended Greencross Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.