When it comes to building long-term wealth for my kids, my focus is on high-quality ASX shares that can compound over decades.
After all, my kids are still little. So there's no point in me chasing the next big booming growth stock when consistent growth is much more valuable for my kids' futures
Here are two ASX 200 shares I'd buy and hold for my kids.
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iShares S&P 500 ETF (ASX: IVV)
I think one of the best ASX shares to buy for kids is a broad-market ETF. Rather than picking individual stocks, an ETF gives its shareholders a stake in multiple companies at once.
IVV is a great example. The ETF provides its shareholders with exposure to around 500 of the largest US-listed companies, including well-known global brands, businesses with large customer bases, and those with strong balance sheets.
The ETF holds major names that even your kids would be aware of. Such as Nvidia, Apple, Amazon, Tesla, Netflix and many others.
The benefit of investing in an ETF rather than a single stock is that if one company suffers a share price decline, it would have a limited impact on the ETF as a whole.
And this is ideal for investors looking to buy ASX shares for their kids to hold for the long term.
IVV is generally a low-risk investment versus trying to pick an individual winner. Instead of betting on a single company, investors are effectively buying their kids a slice of all the largest US businesses at once.
IVV pays passive income, too. It generally pays its shareholders four dividends per year. Most recently, it paid shareholders 13.95 cents per share in April, which translates to a trailing dividend yield of roughly 1% at the time of writing.
Telstra Group Ltd (ASX: TLS)
If I were to buy a single stock for my kids, it would be a classic ASX defensive share, such as Telstra.
The telecommunications company is dominant in Australia. It operates one of the country's largest mobile networks and is a major fixed-line internet provider.
Mobile phone and internet use are already considered necessities, and I think both services will only continue to grow over the next few decades.
This stable and growing demand means Telstra is also well-positioned to benefit from recurring revenue and earnings. And this will be the case regardless of the stage of the economic cycle we are in.
This type of stock is also perfect for investors who want to hedge against potential volatility elsewhere in their kids' portfolio.
And if that isn't enough, Telstra's defensive nature means it can also pay shareholders a consistent passive income, too.
The ASX 200 telco most recently paid shareholders a dividend of 10.5 cents per share in March, 90.48% franked. Analysts forecast Telstra to pay a total dividend of 21 cents in FY26. This translates to a forward dividend yield of around 4.1% excluding franking credits, at the time of writing.
Washington H. Soul Pattinson and Company Ltd (ASX: SOL)
If I were to focus on long-term dividend income. Soul Patts is another ASX share I'd consider buying for my kids.
Soul Patts is an Australian diversified investment house. It's often compared to Warren Buffett's Berkshire Hathaway because it invests in a broad portfolio of assets ranging from ASX-listed companies, to private credit, to real estate, and others.
Not only is it widely regarded as Australian dividend royalty, but it's also one of the few ASX shares that have continually raised its dividend payments over the past 28 years.
Soul Patts historically pays its fully-franked dividends twice per year in May and a final dividend in December. It occasionally also pays shareholders an additional special dividend.
For the first half of FY26, Soul Patts paid a fully-franked interim dividend of 48 cents per share. This was a 9.1% increase on the prior corresponding period. At the time of writing, the ASX shares have a grossed-up dividend yield of around 2.4%, including franking credits.
