My teenage children want to invest $4000. Where should they start?

August 5, 2026 — 5:01am

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My children, aged 10 and 13, would like to start investing a modest amount in shares. They will have about $4000 to start and may then top up their investment once or twice a year with birthday, Christmas and pocket money. Could you please outline the best options in terms of simplicity and tax treatment, both now and into the future? I’m not sure whether the shares should be held in my name or theirs. My gross income is about $104,000 and my husband’s is $182,700.

We don’t want to spend too much time establishing or maintaining the investment – we’re looking for a “set and forget” approach – but we do want to be able to easily see fees, tax, performance (gains or losses) and overall returns. I’ve heard that platforms such as CommSec and Vanguard are fairly simple.

It’s terrific that your children want to start investing while they’re still so young. Time is the greatest asset an investor has, and starting early can make an enormous difference to the wealth they build over their lifetime.

One option is to buy shares or exchange-traded funds (ETFs) through a platform such as CommSec or Vanguard. But before you do that, think carefully about who should own the investment.

If the shares are held in a child’s name, special tax rules apply and investment income above modest limits is generally taxed at penalty rates. If they’re held in a parent’s name, those rules don’t apply, but all income and capital gains are taxed at the parent’s marginal tax rate.

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