Give your kids a head start in life by investing with reduced tax

Give your kids a great start with financial stability

Everyone wants to give their kids a good start in life, one big part is financial stability. With some capital your kids might be able to buy their first resident or in some other way take their first step towards independence.

I save SEK 1,000 per month for each child which I invest in preference shares with fixed dividend through Untie Group where I also obtain monthly payouts. I am using the return to buy more preference shares and throughout time this produces compounded interest.

The minimum investment for these preference shares is SEK 2,000 so every other month I can buy new shares. After about two years the monthly payout is enough to purchase more preference shares and it accelerates from there.

The cash return gets larger and larger and the pace of re-investment increases as well. After 18 years the amount is larger than SEK 350,000 after tax with the reduced Swedish tax rate of 25 % instead of the regular 30 % on capital gains.

The total amount is now SEK 355,078 which is made up of SEK 216,000 of deposits and the remaining SEK 139,078 is pure return after tax.

The chart below shows the relationship between the capital deposited and the generated return, notice how the return accelerates over time.

It is never to late to start investing for your kids, through smart investments you can almost double the invested capital during a period of 18 years.

You can find more information at www.untiegroup.se and www.konsumenternas.se.

Good luck with your investments!

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