Why my daughters will be richer than I ever was at 21

When I turned 21, I didn’t have a wealth strategy. Like most young people, I had a part-time job, a few savings in the bank, and not much else.

But my daughters—currently just 5 and 2 years old—are already on a very different path. And it’s not because we’re doing anything extravagant. It’s because we’re starting early, keeping it simple, and letting time do the heavy lifting.

The power of starting early

Most parents, grandparents, aunts, and uncles want to give children gifts, often toys that are forgotten within weeks. But imagine if, instead of another plastic toy, every $50 or $100 gift went towards an investment for your child’s future.

The earlier you start, the more compounding works in your favour. A dollar invested when your child is 2 could be worth several times more than a dollar invested when they’re 12, simply because it’s been working harder for longer.

As Albert Einstein famously put it: “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it.”

A simple plan that works

Here’s what we’ve set up for our girls:

1. Start small: You don’t need a fortune. Even an initial $2,000 investment, plus $200 a month, started early, can grow into something meaningful.
2. Be consistent: Automate contributions so they happen every month, no matter what.
3. Get the family involved: Encourage grandparents, aunts, and uncles to contribute instead of buying more “stuff.” Every birthday, every Christmas, it adds up.
4. Invest for growth: While they’re young, time is on their side. That means high-growth investments, such as shares, managed funds, or investment bonds, are the best way to maximise compounding returns.
5. Stay the course: The biggest wins come not from timing the market, but from time in the market.

Why we use investment bonds

An investment bond is one of the smartest tools for this kind of long-term wealth creation:

• Tax-effective: Earnings inside the bond are taxed internally at a maximum rate of 30% (gross), which is often lower than the marginal tax rate of high-income earners. Importantly, you don’t need to declare the earnings on your own tax return each year.
• 10-year rule: Hold it for 10 years or more, and all withdrawals are completely tax-free.
• Contribution flexibility: You can increase contributions each year by up to 125% of the previous year’s amount—perfect for growing with your income.

We started with a modest balance, made a manageable monthly contribution, invested in high-growth opportunities, and plan to increase it steadily each year. By the time our daughters turn 21, they’ll have a substantial nest egg ready for a first home, further study, or even their own first investments.

The numbers don’t lie

With an initial $2,000 investment and $200 a month invested in a high-growth portfolio (assuming an 8% p.a. return), by age 21, our daughters could each have around:

$127,000+

That’s from consistent contributions and the power of compounding—not a lump sum, not luck, just steady investing.

Visualising the growth

Here’s what that journey looks like year by year:

(Figures are approximate and based on an 8% annual return, compounding monthly.)

This simple chart illustrates how the investment growth line steadily rises above the contributions line—highlighting the power of compounding.

Teaching patience and money lessons early

This isn’t just an account we set up and forget about. We talk about it regularly with our daughters, using it as a chance to teach them about patience, saving, and long-term thinking.

Sometimes, when they have a choice between spending on lollies, some new toys, or putting money into their investment account, we frame it as a real decision: 

Do you want a short burst of fun now, or something much bigger later?

And here’s the part that makes me proudest: after our eldest’s birthday, her daycare teacher asked if she was going to spend her money on some new toys. Her reply? 

“No, I’m going to put it into my investment account so it keeps growing.”

That was a genuine proud dad moment—seeing our little girl already embracing the mindset of building for the future instead of instant gratification.

A growing trend among grandparents

As financial planners, we also work closely with our older clients—many of whom are now grandparents. One of the most popular strategies we’re seeing is setting up dedicated investment accounts for their grandchildren.

For some, it’s part of a broader estate planning process, allocating funds now so that when they’re gone, a meaningful legacy remains in place. Others like the idea of a final gift at a milestone birthday—for example, having funds become available when a grandchild turns 21.

For families with more substantial wealth, we often extend the vesting age to 25–27, ensuring the money is accessed when the grandchild is more financially mature and ready to make considered choices.

This approach combines two powerful outcomes: supporting the next generation while also giving grandparents peace of mind that their legacy will have a lasting impact.

The bigger picture 

We’re not trying to make our kids millionaires by 21. What we’re doing is more important: giving them options, opportunities, and financial confidence.

When they reach adulthood, instead of just having memories of toys long gone, they’ll have a pool of capital working for them. They’ll learn that wealth is built through patience, planning, and consistency, not quick wins or luck.

And maybe, just maybe, that lesson will be worth more than the money itself.

Ready to set this up for your family?

Contact Singleton Financial to put a smart, tax-effective wealth creation strategy in place for yourself—and a future fund for your child(ren) or grandchildren.

Our financial advisers will help tailor a personalised plan that fits your goals, timeline, and budget, so you can start early, stay consistent, and let compounding do the heavy lifting.

What we’ll help you with:

• Choosing the right structure (e.g. investment bonds, managed funds, or other tax-effective options)
• Setting practical monthly contributions (e.g. $200/month) and one-off gifts from grandparents, aunts and uncles
• Selecting high-growth investment options appropriate for long timeframes
• Creating a simple, automated plan you can stick to.

Take the next step: Book an initial chat with Singleton Financial and get your tailored plan underway.

Disclaimer:

The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information, you should consider its appropriateness regarding your objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of the licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the author’s express written consent. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.