Investing

Looking for a recommendation for a Child investment product

  • Last Updated:
  • Jan 27th, 2021 9:35 am
[OP]
Newbie
Nov 23, 2019
11 posts
1 upvote

Looking for a recommendation for a Child investment product

Hello everyone!

I recently found this great community and would like to ask a question - we are relatively new to Canada (since 2014) and that might be the reason for our lack of knowledge in some of the finance issues.

We have a 3-year-old girl, while she is still young we are looking for an investment product that will allow us to help her a bit when she would be older - let's say 25 years from now. We have a self-directed RESP account which we max out on an early basis. What we are looking for is a "tax-smart" additional investment account that would be in her name or will have some kind of deferred tax structure to which we would invest additional funds on a monthly basis we have been searching for such a product for a while now with no luck. We are hoping for advice.

Thank you, stay happy healthy and stay safe.
2 replies
Member
Sep 23, 2010
376 posts
150 upvotes
TORONTO
GME 1/29 options obviously!

Actually, my parents bought some whole-life life insurance for me when I was very young and I really appreciate having it. If you apply for a child, there's likely a very minimal health questionnaire and decades of compounding should make it grow substantially. Although things are likely somewhat different now with the interest rate environment, and also new policies don't necessarily have the same tax advantages as some of the old policies, it is something you might want to talk to an insurance agent about to see if it might work for you. If, in the future, a kid is 28 with student debt and a mortgage and a couple of kids, having some whole-life life insurance, in addition to term, can be nice to have. I don't think it can ever go down in value so its not something you or your kid is going to panic-sell in the event of a market crash. And by that time, I suspect that re-invested dividends will more than cover the premiums, so no worry about being able to afford the premiums in that case.
[OP]
Newbie
Nov 23, 2019
11 posts
1 upvote
Thank you for your reply - i am indeed in process of checking whole life insurance, it seems to be a product most suited for later in life added value let's say 40+ it seems to be a good option if i won't be able to find any alternatives. There is a lot of fine print on this product but cut everything clean i do believe that 200CAD spend /m basis invested 100% equity ETF will eventually yield higher returns for a 25 year period than whole life insurance.

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