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FAMILY & RELATIONSHIPS

How to explain the basics of investing to your family

4 October 2018

This article is part of the Suncorp ESSI Money Family Challenge series, in partnership with the Financial Basics Foundation, an independent charity working to educate young people to better understand money and finances.

When it comes to investing, it’s great to understand your options so you can make the right decisions at the right time to help your money grow.

It’s a great lesson for all ages, as it’s never too late to start investing – but the sooner you do, the more time you’ll have for your investments to increase in value.

So here are the basics, think of it as ‘investing 101’, to help your family on the path to a brighter financial future.

Investing for young children

When kids are young, an easy way to get the ball rolling is to teach them how to save using a piggy bank. They’ll be excited to fill it up and be able to save for a special treat of their choice.

Understanding the concept and value of saving is not only a great lesson, but will also help them later in life if they decide to put money aside for investing.

Later on, you can help teach kids about shares using companies they are familiar with. You could track how the company that makes their favourite movie, clothing label or sports team is performing.

For more on investing, including topics to discuss with your family, download our fact sheet.

Investing Tips For Your Family – Fact Sheet

Different types of investments

There are generally 2 types of investments: defensive or growth. Defensive investments tend to generate income in the form of interest.

One example of this is a term deposit where you choose to deposit a certain amount of money for a certain amount of time, e.g. 5 years. Your interest rate will likely be fixed for that entire period, giving you a guaranteed return on your investment providing you don’t withdraw it early.

In comparison, growth investments aim to increase in value and have the potential to generate income. For example, buying shares.

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The Financial Basics Foundation is a non-for-profit charity focused on educating young people in money and personal finances. Their vision is, “that all young Australians are financially capable and can manage their finances now and into the future.” For more information visit financialbasics.org.au


This is general information only, current as at 20 November 2017 and is not legal or financial advice, nor is it intended to be legal advice or financial advice. It is not a recommendation or advice in relation to the Suncorp Group or any product or service offered by any company or entity in the Suncorp Group and does not take into account a person’s objectives, financial situation or needs. Before acting on this information you should consider the appropriateness of this information having regard to your personal objectives, financial situation or needs. The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

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