How good are we in Ireland at educating our children about the importance of investing & saving? It’s not uncommon in the U.S. for parents or grandparents to gift a baby shares to start them on their investment journey early. It is seen as a fun but educational and potentially profitable way to teach kids about the stock market. It can also be a very tax efficient to gift cash on a more regular basis rather than waiting for big life events such as a wedding or buying a house.
Did you know that you can gift up to €3,000 to any person, not just to your child, each year tax free? For instance, a set of grandparents could gift €3,000 per annum to a grandchild, a total of €6,000 thus enabling them to gift €30,000 over a 5-year period. We work with our client’s other advisors to make sure they gift in the most tax efficient way. We also facilitate our clients who want to make long-term investments on behalf of their underage children.
“If you decide to give a gift of money or an investment, the one tenet we would say is that long-term planning requires discipline and patience. It’s not a gift that gives an instant thrill but can have a very rewarding long-term benefit and serves as a good educational tool.”
Leanne Malone, Key Capital Wealth Management
Whether you gift money to buy prize bonds, to set up a regular saver or make investments on your children’s behalf, the concept of buying and holding for the long term teaches them to understand the process.
Encouraging children to manage money early, build on that each year and broaden the discussion around investing for the longer-term can never start too early. At Key Capital, we find with our clients they often start with their involvement early in the giving portion and this serves as a good educational tool around the purpose of wealth ultimately, but also an early introduction into philanthropy.
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