I knew before my son was born that I wanted to get him into the market as early as possible. The earlier you start, the longer the money compounds. Time in the market beats timing the market is the common wisdom here.

In reality it took me about five or six months to get around to it. Life with a newborn gets in the way. When I finally set it up, I put in $50 a month. I picked that number because it doesn’t hurt our budget, otherwise we wouldn’t be doing it.

When he was born we received a good chunk of gift money from family that went straight into the account. Some of his birthday and Christmas money has also gone in since.

I put his money into the Vanguard Total World fund (VT) at InvestNow. He has his own portfolio there, which I manage on his behalf. We didn’t want the money locked away until he’s 65 or buys a house. The goal is financial independence, and we want him to be able to access it well before that.

He won’t know about this for years. At some point I’ll show him the account, explain how it works, why we started when we did. I hope it helps him achieve his goals in life.

If you’re thinking about doing the same, there are a few things worth keeping in mind. Get your own finances sorted first. This only makes sense once you’re in a comfortable position and your own savings and investments come before your kids’. Put it in shares, not a savings account or term deposit. Cash feels safe but it won’t compound the way an index fund will and unless your child is about to need the money, there’s no reason to accept low interest rates. Skip KiwiSaver too. I’ve written about why KiwiSaver isn’t the right choice for your kids separately, but the short version is the lock-in until 65 or a first home defeats the point. And start as early as you can.