When we were still kids, we immediately spent the little money savings on toys and food. However, studies show that setting some money aside can save you more for spending after a few months or better yet, years. An 8-year-old girl in Australia bought her first house together with her siblings, Angus, 14, and Lucy, 13, and with the help of their parents. The 3 children combined their savings and bought a house worth AU$$671,000.00. With the title of the new house under her name, she has become the youngest homeowner globally!
According to the Daily Mail UK report, 8-year-old Ruby McLellan was born in Australia. 2 years ago, she and her siblings would rely on weekly labor to get paid by their parents. With their help, the 3 siblings learned how to save their money and were taught how to invest at a very young age. A total of AU$6,000 savings were combined by Ruby and her siblings, and they used this as a downpayment on a house they wanted to purchase. The house was worth AU$670,000.00 when Ruby made the downpayment, making her the youngest homeowner in history.
Ruby’s journey in investment was not without the help of her parents, who are real estate investors. The siblings’ father, Cam McLellan, said they get paid weekly for helping with housework. Fortunately, they are aware of financial management and minimize their expenses. The siblings were taught the basics of investing when they were younger, and together, they have raised AU$6,000 in just weeks. Their parents helped with the process of purchasing the house.
The house exceeds 200 square meters, and the title of the property will have the names of the 3 children. The house is now worth AU$960,000, and Cam said that it will be rented out. The monthly rent will be paid to the children and will be split into 3 equal amounts. Cam also said the children are already discussing purchasing a second property. Cam also said to let the children learn about financial management as early as possible by encouraging them to purchase real estate properties with their savings. According to him, it is a good investment.
Cam explained that when he was working in real estate, he had a deep understanding of the impact of inflation on future housing. “The earlier you start, the better,” Cam explained. “Australia’s housing prices will only continue to rise, and the housing supply is seriously insufficient.” Therefore, the money the children used was their start-up capital, and the house could be their children’s home in the future. Cam even wrote a book entitled “My Four-Year-Old, the Property Investor” based on his children’s investing experience, encouraging parents to cultivate their children’s financial management skills as early as possible.
The story of Ruby’s journey attracted the attention of netizens. However, many questioned how much the parents shared since AU$6,000 was not enough for a downpayment. Although Cam did not say how much he and his wife shared when they purchased the property, netizens estimated that property downpayment is usually 20% of the price. The downpayment should have been around AU$110,000.00. Some of the netizens commented:
“So, it is actually the parents who bought the house for their children?”
“How much exactly are the children’s pocket money?”
Some netizens who work in real estate criticized the parents’ behavior as using their children to evade taxes. “Are you trying to use your children to evade taxes? Because this is the best way to do it.” Cam McLellan easily shunned all bashes and claimed he would never let his kids read the personal attacks on social media.
“It’s easy for someone who doesn’t have property or hasn’t made sacrifices to be angry about it and easily target a young kid who has a leg-up,” Cam said. “You don’t want to aggressively rub that into the young generation, but they need to sacrifice and delay gratification. There’s no easy silver bullet, but while my kids will get enough to get started, they are not silver spoons. They have a leg up, but so can anyone in Australia.”
Cam McLellan said that bashers would be better off using their energies to find jobs, not destroying people’s hopes and dreams. It would be wise if they cut down on their discretionary spending and save money for their own first investment.
Images credits: © DailyMail UK and GirlStyle Presslogic
