When Amanda Derham was in her early 20s, an extraordinary gift from her grandmother changed her life.
“During World War II my grandmother started a mail order business selling live yeast – I only learned about this when I’d finished university and came home from 12 months working in South America and Europe,” Amanda recalls.
“My father told me that my grandmother had left me a small legacy from her business that was enough to buy my first car. I’d never really known her, and so that was my introduction to investing for the future and investing for my family. We’re a business family and I knew about many of our business stories, but I had never known that story and I was amazed and so grateful and it came at a time when I really needed the money.”
Now Amanda is planning ahead to create similar legacies for her own grandchildren, setting up Six Park investment accounts for two-year-old Woody and his newborn sister, Piper.
“I opened an account for each of my grandchildren when they were born. I don’t know what they’ll want to use the money for – it’ll be up to them. My niece was telling me that 80% of her friends don’t drive, so maybe they won’t need cars, maybe it’ll be a very different world, but the beauty of their Six Park accounts is that it will be growing. Money gives you choices, so I’m giving my grandkids a choice,” she says.
“I plan to add money at each birthday – if I end up being lucky enough to have 10 grandchildren I might have to reassess that!”
Amanda, who is a non-executive director, consultant and angel investor, says she would rather invest for her grandkids than buy them “the latest jacquard cardigan”.
“I’m not very good at buying things, I’m much better at buying opportunities,” she says. “I look at my kids and they’re at the coalface of life – they’re very, very focused on building enough wealth to educate their kids and cobble together a life. So I then look at my grandchildren and think ‘Okay, it’s time to contribute to your world’ because I’ve given my kids an education and a family life – two big ticks – so now it’s my job to help the next generation.”
Amanda found the process of setting up the accounts straightforward.
“Form filling isn’t one of my skill sets, so ticking boxes is much easier for me. Doing it online is much easier too,” Amanda says. “When you’re doing it, you need enough head-space to think about the questions. As long as you can spare an hour or so to go through the material and answer the questions thoughtfully, it’s easy. Sometimes when we think about money we assume it’s going to be hard, but often it’s not as hard as it seems.”
She has been investing for more than 20 years but says she wasn’t a very good saver in her 20s.
“I found credit card payments very hard to manage and the interest rate of 19% was a critical issue in my life,” Amanda recalls.
“As I got more established career-wise and more focused on what I had to do with my money – managing a family and managing a budget – I became a bit better. In the work sense, I had a career pivot in my 40s and focused on establishing a family office and building a number of investment portfolios, and started investing in a range of asset classes through a range of fund managers. I weathered the GFC and I’m still alive and continue to invest.”
Amanda believes Six Park is an ideal vehicle for harnessing the power of compound interest at a low cost.
“I regard Six Park as a strong manager of money because, while they invest in ETFs, they have the bonus of the investment committee and it’s their decisions rather than mine. Investing for grandkids means that I need to know that there’s someone outside of myself managing the money. I believe Six Park is a robust organisation built on robust principles so I have faith that they’ll live on.
“Investing is part of the rhythm of life – it’s about scrambling around in your 20s and 30s building a business or a career, saving for a house, taking out a mortgage at 17.5% for us! You have kids, and you juggle work and family. In your 40s it’s time for consolidation, climbing the corporate ladder, paying the school fees, navigating life with kids … then in your 50s and 60s it’s about reinvention and looking to the future, believe it or not, because we’re living longer.”
Amanda hopes to help her grandchildren learn one of the most fundamental principles of managing money.
“It’s all about the money you earn and the expenses you have. If your expenses are greater than the money you earn, you’re in trouble. It’s a difficult but important lesson. Then I hope they learn about the power of money to provide opportunities and the importance of a legacy – because really you’re always a custodian for the next generation.”