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Speaker 1: Welcome to start here the very special mini series within

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Speaker 1: Sugar Mamma's Fireplay, where I answer your real life questions

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Speaker 1: with practical empowering steps to help you finally get started.

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Speaker 1: Today's question comes from a very kind, caring, and thoughtful mother.

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Speaker 1: She wrote to me to share that when her daughter

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Speaker 1: was young, she received twenty five thousand dollars from the

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Speaker 1: government as compensation after a car accident. That money was

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Speaker 1: placed in trust about fifteen years ago, and it is

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Speaker 1: only grown modestly with inflation roughly twenty five percent, meaning

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Speaker 1: it is likely to be worth around thirty one thousand

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Speaker 1: dollars today. Her daughter has fully recovered, thank goodness, with

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Speaker 1: no impact on her health, and is turning eighteen shortly,

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Speaker 1: which means she'll soon have access to these funds. So naturally,

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Speaker 1: this mother has asked me, what should my daughter do

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Speaker 1: with this money? Now? This is such an important question,

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Speaker 1: not just because it's about setting her up financially, but

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Speaker 1: how we actually use these opportunities like this to educate,

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Speaker 1: empower and support young growing adults to make wise financial

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Speaker 1: choices and to know how to grow their own wealth

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Speaker 1: and financial independence themselves. So firstly, I want to acknowledge

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Speaker 1: this mother's care. It is so natural to be protective,

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Speaker 1: especially when this money came from something as traumatic as

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Speaker 1: a car accident. And whilst it's tempting to just want

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Speaker 1: a straight answer from me now, the truth is there

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Speaker 1: is no one size fits all solution. What I can

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Speaker 1: do in this episode, though, is walking through some possible pathways,

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Speaker 1: explain the risks and the rewards, and hopefully spark a

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Speaker 1: really empowerful conversation between you and your daughter. Because this

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Speaker 1: isn't just about the money. It's about using this as

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Speaker 1: a teaching moment, a defining teaching moment that could change

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Speaker 1: the trajectory of her financial life. So let's look at

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Speaker 1: the money itself. If twenty five thousand dollars was put

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Speaker 1: aside fifteen years ago and it only tracked inflation, it's

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Speaker 1: reasonable to assume it's now worth around about thirty one

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Speaker 1: thousand dollars. Now, that is a significant amount of money

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Speaker 1: for an eighteen year old. It could be used to

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Speaker 1: tick off short term goals, provide long term security, or

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Speaker 1: mix of both. But before rushing into decisions, it's really

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Speaker 1: important to think about the time frames and the actual

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Speaker 1: goals themselves. You know, what does she want this money

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Speaker 1: to do for her today and in five years, ten years,

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Speaker 1: twenty years, or even forty years. We need to think

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Speaker 1: about this and maybe write down some notes. Also, if

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Speaker 1: she thinks that she might need this money in the

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Speaker 1: short term, maybe to buy her first car, help pay

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Speaker 1: for university costs or other educational expenses. You know, maybe

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Speaker 1: she uses this money to put towards the home deposit

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Speaker 1: or an investment property, or even if she's just not

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Speaker 1: sure yet what she wants, then keeping it in cash,

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Speaker 1: to be honest, is the safest option. Why because investing

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Speaker 1: in shares or property for a short period of time

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Speaker 1: is fraught with danger. It is risky. You know, markets

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Speaker 1: can drop suddenly, and the last thing you'd want is

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Speaker 1: for her to need that money and the market is

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Speaker 1: down and be forced to sell at a loss. So

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Speaker 1: if she needs flexibility, cash is really the best place

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Speaker 1: right now. It may not grow by money, but at

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Speaker 1: least it will always be there for her now. On

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Speaker 1: the other hand, if she knows that she doesn't need

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Speaker 1: this money for many, many years, and she's curious about

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Speaker 1: how to make this money grow, then investing could perhaps

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Speaker 1: be a really smart choice for her now. This is

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Speaker 1: where it's important to think about her risk profile at

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Speaker 1: age eighteen, with potentially decades ahead before she needs this money.

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Speaker 1: She might be suited to some growth investments like ETFs,

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Speaker 1: listed investment companies, or even individual shares if she wants

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Speaker 1: to do this. These offer strong long term returns, but

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Speaker 1: they come with obviously an increased amount of risk and volatility,

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Speaker 1: particularly in the short to medium term. So the key

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Speaker 1: question is that I would be asking her, is you know,

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Speaker 1: how would she feel if her portfolio dropped by say,

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Speaker 1: twenty to thirty percent in a market crash. I'd also

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Speaker 1: be asking her to sh you understand the difference between

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Speaker 1: the market value of a share portfolio and the actual

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Speaker 1: dividends the income paid from these investments. I'd also be

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Speaker 1: asking her is she interested maybe long term wealth creation

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Speaker 1: or does she just want flexibility to be able to

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Speaker 1: access that money sooner. This is not about telling her

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Speaker 1: what to do or manipulating her. It's actually about giving

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Speaker 1: her the tools and the language so that she feels

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Speaker 1: empowered to make her own decisions with her own money.

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Speaker 1: And one of the best things that she can do

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Speaker 1: right now before making any decision is to educate herself.

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Speaker 1: I encourage or I insist that you get her to

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Speaker 1: read a couple of personal finance books and listen to

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Speaker 1: a few podcasts and inspire her to take ownership of

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Speaker 1: her financial wellbeing. You know, Mindful Money is a great

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Speaker 1: book to get started, or even the thousand Dollars Project.

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Speaker 1: Of course, there are so many books out there, and

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Speaker 1: if she's interested in Australian shares, I've mentioned it before

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Speaker 1: and I'll mention it again. Peter Thornhill's motivated money because,

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Speaker 1: as the saying goes, you can lead a horse to water,

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Speaker 1: but she can't make it drink. As her mother, you

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Speaker 1: can guide her, but ultimately she's got to be the

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Speaker 1: one that is ready and willing to build her own

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Speaker 1: knowledge and confidence. When she starts to understand how those

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Speaker 1: small efforts made consistently over time create enormous long term

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Speaker 1: financial results, hopefully she'll begin to see that she has

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Speaker 1: the power to become a strong, independent and financially secure

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Speaker 1: woman and be part of the ripple effect where she

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Speaker 1: educates in powers the other women around her, and her

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Speaker 1: children and her grandchildren. This is so important, and of

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Speaker 1: course it doesn't have to be all or nothing here.

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Speaker 1: If she wanted to, she could actually split this money

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Speaker 1: and use it for say different buckets. For example, she

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Speaker 1: might want to keep behalf of this money and like

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Speaker 1: a high interest savings account for short term security, and

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Speaker 1: then invest the other half in to say, you know,

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Speaker 1: a dividend based ETF for a listed investment company for

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Speaker 1: long term growth, meaning that money can also be properly diversified.

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Speaker 1: This way, she has a safety of the cash, but

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Speaker 1: she's also learning firsthand how compounding interest works. In fact,

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Speaker 1: even fifteen thousand dollars invested for twenty years could grow substantially,

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Speaker 1: especially if she can contribute to this on a regular

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Speaker 1: basis as well. And it's not just about the returns.

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Speaker 1: It's about creating the habit and the confidence of being

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Speaker 1: a young investor, hopefully a young wise investor. So here

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Speaker 1: is my advice to this mother. Use this as a

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Speaker 1: chance to teach, not to decide. Encourage your daughter to

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Speaker 1: set really clear goals, think about timelines, and reflect on

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Speaker 1: her own level of comfort with risk. Remind her that

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Speaker 1: terr money should always stay in cash, but it is

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Speaker 1: actually long term money that can grow through investing, you know.

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Speaker 1: Encourage her to contribute to this when she can, even

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Speaker 1: small amounts. Build up over time, and please don't forget

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Speaker 1: about superannuation. It's probably the last thing an eighteen year

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Speaker 1: old's mind is on, but making sure her super when

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Speaker 1: she gets her first job is set up correctly, the

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Speaker 1: money's invested, and she understands about how to check her

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Speaker 1: employee contributions, the fees. You know, how it's going to

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Speaker 1: work for her, and how she can if she wants

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Speaker 1: to maybe look at contributing, because doing this can make

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Speaker 1: an enormous difference later on, and as her confidence grows

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Speaker 1: and she builds her post investment portfolio and is contributing

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Speaker 1: and has that powerful aha moment, there's also the possibility

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Speaker 1: of learning about more advanced strategies in the future, like,

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Speaker 1: for example, borrowing to invest through say a margin loan. Now,

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Speaker 1: this is not something she needs to rush in by

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Speaker 1: any means, and it is most definitely a higher risk

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Speaker 1: strategy that should always be done with professional personal advice

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Speaker 1: from a licensed financial planner and with a very clear

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Speaker 1: plan in place so that you can proactively navigate those

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Speaker 1: risks and obviously strategically minimize them as much as possible.

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Speaker 1: But when a gearing plan is done the right way

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Speaker 1: for the right reasons, and at the right stage of life,

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Speaker 1: it definitely can accelerate the wealth creation journey. And it's

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Speaker 1: something I started doing when I was in my early

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Speaker 1: twenties actually, But of course it's most definitely not for everyone,

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Speaker 1: but it's always worth her knowing about this particular tool

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Speaker 1: and strategy and how you know it exists, and so

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Speaker 1: that when she is older one day and more experienced

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Speaker 1: and you know, then financially ready, she'll know whether it's

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Speaker 1: right for her or not and how to set it

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Speaker 1: up and do it in the best way for her.

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Speaker 1: Of course, most importantly right now, frame this not as

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Speaker 1: a burden, and not that I think you're framing it

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Speaker 1: as a burden, but for other listeners in similar situations.

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Speaker 1: But think of this as a gift. This money is

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Speaker 1: a chance for her to learn, to grow, and to

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Speaker 1: start her adult life with a financial head start, if

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Speaker 1: you want to call it something that many young people

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Speaker 1: never really get. So no, I'm sorry, there's no single

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Speaker 1: right answer for you right now. But with education, empowerment

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Speaker 1: and the space to learn through books, through podcasts and

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Speaker 1: lived experience, she'll be in the best possible position to

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Speaker 1: turn this gift into something so much bigger over her lifetime,

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Speaker 1: and maybe one day, when the time is right, she'll

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Speaker 1: even be ready to explore more advanced strategies, but always

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Speaker 1: doing so with confidence and knowledge by her side. So

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Speaker 1: thank you so much to this mother for such a

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Speaker 1: full question and for caring so incredibly deeply about your

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Speaker 1: daughter's financial future. If this particular episode resonated with you,

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Speaker 1: can you do me a huge favor? Can you please

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Speaker 1: Number one co and share it with a friend who

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Speaker 1: might also be thinking about how to guide their kids

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Speaker 1: with money. Number two, can you please leave me a

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Speaker 1: rating at a review And of course, remember if you

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Speaker 1: would like me to answer your questions in the future

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Speaker 1: for any of the start Here episodes, please make sure

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Speaker 1: you send me a DM on Instagram at sugar Mama

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Speaker 1: TV or at my lifestyle account Canna Campbell Official. In

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Speaker 1: the meantime, keep that financial fire burning bright within and

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Speaker 1: I'll connect with you next Monday morning on Sugar Mama's

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Speaker 1: Fire