Private investor Faith on investing for her children

I’m Faith Archer, and I was actually born, and grew up, near Leicester, and ended up one way or another after university working as a journalist, and a money blogger. I met my other half, Josh, back in 2001. We went to Christmas drinks held by a mutual friend in a pub in Chiswick. We were together for about four years before we got married, and then had our first child, Finn, a couple of years later, and second child, George, a couple of years after that. And Finn and George are now 14, and 12.

I think my two kids are pretty different. Finn is really into drawing, loves drawing all the time, and on the sports side, I guess, is more into things like trampolining, and climbing. George, he is a big fan of board games, and computing, and at the moment, I think his big plan is to become an engineer. I think we realized there were going to be financial strains to becoming a parent before we even became parents. I think we were aware that for our own costs it was going to be fairly onerous, but also looking ahead for our kids, I think we were aware that their start in adult life was probably going to be more expensive than it had been for us. When we were looking to get our first homes, house prices were way lower. I think we were aware that our kids were going to have a trickier time financially.

I hadn’t invested myself, beyond my pension, before the children came along. I think I was worried about the risks of losing money, and I didn’t necessarily feel I had spare money. I thought that if we could build up some money for the children when they reached 18, that would open up many more choices for them. I think I knew quite a lot about the theory of investing. I was sure that over a long period of 18 years that I’d have much better chance of creating more money for my kids by investing than staying in cash. I also felt very strongly that I didn’t want to be picking, and choosing, individual companies myself, but wanted to used funds, where somebody else would be spreading the money across lots, and lots, of different companies, and lots of different countries.

At the time my children were born, the government was actually giving away money, gave £250 vouchers to each of my kids, that could only be used to open what was then called, a Child Trust Fund, and now you open junior ISAs instead.

That money grows free from the tax man. Nobody’s going to tax your dividends, and your growth. One of the other things about Child Trust Funds, and now junior ISAs, is that the money is locked away until the children reach 18. That’s why, with a junior ISA, the fact they could access the money at 18, that was quite important to me. When it came to actually investing the money, and choosing where to put it, I ended up using investment trusts. Looking at the amount of time, I figured that if the children couldn’t access the money until they were 18, then we could afford to take a few more risks on their behalf. I want my kids still to be motivated to make their own way in life, just hopefully with a little bit of support to get them started. I think that would be my main tip. Think about investing rather than saving, and don’t underestimate how much small amounts regularly invested can really add up.