When you create a Kids Account, you’ll be able to sign in and switch between yours and theirs, just like Netflix. Because your child is under 18, legally they aren’t allowed to manage their own investments, however, you can decide how much or how little they can be involved. Some common approaches are:
Involve your kids!
It may sound lame to sit around the dinner table discussing share portfolios, but a LOT of Hatch investors do. If compounding returns are the 8th wonder of the world, the fascination you’ll feel when you buy shares could be considered the 9th. Some families like to talk about companies they’re interested in, or trends their kids are noticing. Others like to spot big brands they know and love as they walk down the street (Mc Donalds? Coke? Nike?) and add them to their children's watchlists. It’s like when you buy a red car, and suddenly you see them everywhere - once you buy shares, you’ll get interesting information from all directions.
A regular check of your Kids Accounts will also help them learn about the usual share market fluctuations and how share prices work over time. They’ll grow up comfortable with seeing red and green and knowing what they mean, which means when they eventually go out into the big wide world, they’ll have a level of financial literacy that most of us could only dream of.
Don’t get involved
One of the most dangerous myths when it comes to shares is that the more you do, the better. Shares are one area where laziness can really pay off (which is why some of us struggle to maintain an exercise regime, but nail a regular investing habit). Learning about different companies is a really cool way to upskill and get excited about shares - being a shareholder means you literally own a slice of a company. However, often less is more.
A lot of investors set up a set-and-forget portfolio. They get into the habit of depositing money every week, fortnight or month, then pick a handful of ETFs and set up auto-investments. Because auto-investments can be set up for any timeframe, your regular deposits stockpile in Hatch until your auto-investment is made - a simple and effective way to lower your fees while still getting the benefits of dollar-cost averaging. Investors who take this approach often don’t even sign into Hatch, they just let compounding returns do their magic. A $20 a week deposit adds up to over $1,000 in the first year, and if shares continue to deliver average annual returns of about 10%, it will lead to your baby having a whopping $42,000 nest egg by the time they hit 20.
To start, only parents and legal guardians will be able to open Kids Accounts, but after you've made an initial deposit, anyone can contribute to it.