I've made some small purchases lately for the child portfolio so I thought I made a quick update here.
In the past week, I've invested his share of money into the STI ETF (ES3) at $2.85 for 300 shares which I thought was reasonably priced here for the long term. This is in addition to the previous holdings he has in his current portfolio which I have updated almost a year ago (Link Here) when he was 1 year old. How time has flies.
The intention of the child portfolio was relatively straightforward.
Every year, he'll most likely receive his fair share of "ang bao" during the chinese new year and birthday occasion from relatives, grandparents and us (parents). Instead of putting this money into his savings account, which my parents did when I was younger, I decided to go ahead with the plan of placing it into equities. There are some others I know that has the same plan but to put this into endowment, unit trusts or even CPF. That works equally as well.
I am not overly ambitious with the projected returns with this portfolio and while my target is to hope for a 6% returns (inclusive of dividends) per annum and if I can do that for the next 20 years, I think I'll manage to churn out at least $100k by the time he turned 20. Again, everyone seems to think that $100k is a big number but it's just how the logic of compounding works. Start at 20, you'll be great by the time you are 30. Start at 0, you'll be amazed by the time you are 20.
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Our idea of doing this is to instill a savings habit when he is young and as he grows older, I will be working with him on a lot more day to day habits on encouraging savings such as the dollar to dollar matching, delayed gratification and such. I think instilling investing will be far stretched but I wanted him to get the basic habits right in his mind first.
In the meantime, I'd like to again show the below example to others who has not seen on how compounding can actually works wonder.