My Kids Will Never be able to Afford a House!

Something I hear quite regularly is that parents are concerned that their kids will never be able to afford a home.

And that is a real concern, one that I share.

As much as we don’t like to admit it the burden will fall on the bank of Mum and Dad to give our kids a leg up.

For my kids, I have a direct debit that comes out for them every week with $20 and then is invested in a growth ETF.

By the time they are 20 that savings would be $20,800, which we all know won’t be enough to get them onto the property market. Even if they are willing to pay Lenders Mortgage Insurance and borrow 95% that would allow them to buy a home for roughly $400,000, which in 20 years won’t go a long way if we continue on our current trajectory.

But, with a low-cost Growth Electronically Traded Fund (ETF), you’d expect to make somewhere between 6-8%, or more, annually on average over that 20 years. Which is an extra $19,244 to $30,248. A total of $40,044 to $51,058.

With that sort of deposit behind them and some of their own savings, you’d think they would be well on their way to being able to own their own property.

For any Financial Services assistance, please speak to a Financial Planner now at BW Private Wealth Financial Planning | Ballarat | Ararat | Surrounds

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