Alternative investments that will generate returns for your children
Pension funds are in crisis, the stock market is in a semi-permanent slump, government bonds are teetering on the edge of negative returns and to top it all, Brexit is threatening to even send the property market into a downward spiral. There’s no doubt about it, the investment scene is hardly presenting a wealth of riches at the moment, and as you look out at the kids playing happily in the spring sunshine, it’s comforting to know that at least that’s not something they will have to worry about for a while.
Of course, that doesn’t stop us worrying about it for them, and the thing about investments is that like a really good casserole, the longer they have to quietly stew away, the better they will be in the end. In other words, you can never think too soon about buying some investments for your kids. But that brings us back to the question of how and where to invest?
A trust fund
When the government announced child trust funds in 2002, they seemed the obvious way to salt away some money, tax free, that your child could convert into college fees, a deposit on a house or, indeed, something less practical, in years to come. The scheme has now ended and been replaced by Junior ISAs. There is a limit to how much you can invest, so it’s hardly going to set them up for life, but it’s still worth doing.
There is an old joke that in the event of some kind of nuclear holocaust, all that will be left will be the cockroaches – and they will still be trading gold. It is the oldest and most established commodity out there, and it is also the safest. While gold will not escalate dramatically in value, it is also highly unlikely to go down. And when you are looking for something to generate long term returns, that is exactly what you need.
There are companies like Golden Eagle where you can buy precious metals of various types in any quantity, from silver dollars to the gold bars beloved of Bond villains. Take a look here for more details.
You can also invest in gold without physically taking possession of it by way of an exchange traded fund (ETF). In essence, these are mutual funds where your investment tracks with both the price of gold and the behaviour of mining stocks.
It might sound like some sort of joke to buy a house for your child when he or she is not yet able to walk or talk, but if you have the funds available, it could be a shrewd call. Despite a few shaky moments, and the best efforts of various governments to spoil things through increased taxation, the buy to let market is still buoyant, and presents the potential for lucrative returns. You could also invest in property without the aggravation of actually becoming a landlord via property investment trusts.