How to Invest as a Family and Build Generational Wealth

We all want to set our children up for a secure future. With living costs rising and home ownership increasingly out of reach for many young Kiwis, giving the next generation a genuine leg up requires more than just good intentions. It takes a practical plan, the right money habits, and accounts structured to work in your family's favour.

But the good thing is, you don’t need a fortune to get started building wealth for your family.

The best predictors of a child’s wealth later in life are their parents’ socio-economic status and the child’s ability to exercise self-control. That means the smartest thing you can do for your kids when they’re very young is to lead by example, and show them what good money management and self-control look like.

Here are a few Kernel resources to get you started:

• How to set clear money goals
• How to save money
• How to set up an emergency fund
• Everything you need to know about KiwiSaver
• Should you pay down debt?

Great as they are, our resources are just the beginning. You might like to speak to a qualified financial advisor to get advice specific to your personal situation.

But let this be your reminder that it’s never too late to boost your own financial literacy.

While many couples keep separate day-to-day accounts, pooling your long-term investment goals often creates greater clarity, accountability, and compounding momentum.

A Joint Kernel Account allows two people to own, fund, and manage a shared investment portfolio together through one unified dashboard.

• Shared Visibility and Goals: Rather than wondering who is saving what, both partners have full visibility over your household’s core wealth-building engine. You can set goals or group assets for specific shared milestones, such as upgrading the family car, renovating, or building your nest egg.
• Streamlined Admin: Instead of managing two separate transfers, separate reports and rebalancing portfolios twice across individual logins, you can manage one simplified account with visibility for both account holders.

Tip for Partners: Pour a cup of tea and spend 20 minutes each month reviewing your joint account balance, celebrating milestones, and checking that your automatic payments match your current household budget.

Before opening a joint account, it’s good to know that both account holders are jointly responsible for it and either can make withdrawals without the other’s approval. Joint accounts also aren't a substitute for trust or company structures and relationship property and estate considerations can apply.

Set up a joint account here

Once your household foundation is set, opening a dedicated Kernel Kids’ Account is one of the smartest moves you can make for your child.

In New Zealand, you (the parent or guardian) manage the account on their behalf, but the investments legally belong to your child. Once they reach the age of majority (typically 18), full ownership and control of the portfolio is handed over to them.

Note: Kernel Kids Accounts can only access Kernel Funds currently.

• Tax efficiency via Prescribed Investor Rates (PIR): When you invest in a multi-rate PIE like Kernel’s funds, investment income is taxed at the account holder’s Prescribed Investor Rate (PIR).

If you invest for your child under your own name or joint account, your returns will likely be taxed at your personal PIR. However, a kids' account is held in the child’s name, so it uses the child’s own PIR. Because children generally earn little to no taxable income, their PIR is usually just 10.5% (for income under $14,000) or 17.5% (for income between $14,000 and $48,000).

Saving up to 17.5% in tax on annual distributions and foreign investment fund calculations means more money stays in the fund to compound over 10, 15, or 20 years.

• A visual, tangible goal: A separate kids’ account gives your child a tangible sense of ownership. With Kernel Kids’ Accounts, children can be granted log in access to view their balance and help get them even closer to their money. Talking helps, but getting them personally involved in the process of saving, investing, earning, and spending money turns these theoretical concepts into something real. Read our guide to how to talk to kids about money for more tips on this.
• Greater flexibility than KiwiSaver: KiwiSaver is a great tool, but its funds are strictly locked away until age 65 or your child's first home purchase. A Kernel Kids’ Account gives your family flexible access. If your child needs financial support at 18 to fund university tuition, buy their first car, or embark on an OE, the funds can be accessed.

Create a Kernel Kids Account

• Small actions taken consistently beat big bets. In other words, investing whatever you can regularly over a long period of time is a more reliable strategy for most Kiwi families than trying to pick the next Apple or Tesla.
• Diversify your portfolio. The easiest way to do this is often with low-cost index funds as the core of your holdings, then smaller holdings of more speculative assets. The core-satellite strategy is a good way to achieve this.
• Link investment accounts to goals. This can help motivate your children and teach them to prioritise multiple goals. Kernel’s platform allows you to do this, with all investments in one easy-to-view dashboard.
• Know whose name to invest in. You can hold your child's investments in your own name, which keeps you in full control, or in their name where they gain access at 18. There are pros and cons for both structures so it’s worth considering what best suits you and your family. Read our guide to learn more.

There's plenty of different tools your family might want to consider when starting their wealth building journey. We'll explain them in a bit more detail below.

A savings account is the simplest place to start, and a great first money tool for kids. It's lower risk and easy to access, making it ideal for pocket money, short-term goals like a new bike or a school trip, or a family emergency fund.

Check out Kernel Save

A cash fund invests in things like bank deposits, term deposits and bonds, and can offer a potentially higher return than a standard savings account. It's still relatively low risk, but returns can move with interest rates and aren't guaranteed. Cash funds suit short to medium-term family goals, like a holiday or a car, where you want a bit more growth without the ups and downs of the sharemarket.

Check out the Kernel Cash Plus Fund

Index funds buy a slice of every company in a market index, giving you instant diversification at a low cost. They're higher risk than cash in the short term, but have historically grown more over long periods, making them better suited to long-term goals like university, a first home deposit or a nest egg for when your child leaves home.

View Kernel index funds

Buying individual shares means owning part of a single company, like the big household names your kids have already heard of. That makes shares a great teaching tool, but they're higher risk, as one company's fortunes can swing sharply. Exchange-traded funds (ETFs) hold a basket of investments like an index fund, but trade on a stock exchange like shares. Risk depends on what the ETF holds - a broad market ETF is well diversified, while a niche or themed one can be much more volatile. Most families choose to keep shares as a small satellite holding alongside diversified funds, rather than the main event, and focus on long-term goals.

Browse Kernel ETFs and shares

KiwiSaver is built for two main goals: a first home and retirement. Starting early gives compounding decades to work, and a growth fund can suit a young child's long timeframe. The money is locked in, though, and Kernel's KiwiSaver Plan is only open to over 18s, a possible workaround is to invest in the same underlying funds through a Kernel Kids' Account.

Check out the Kernel KiwiSaver Plan

Building generational wealth is all about having good habits, the right accounts, and time - and the sooner you start, the more your family's money can grow. Whether it's a savings goal for pocket money or a long-term fund for your child's future, every small step adds up, and you'll be teaching your kids lessons that last a lifetime.

Kernel Wealth Limited is the manager and issuer of the Kernel KiwiSaver Plan and Kernel Funds Scheme. Product Disclosure Statements are available at Kernel Wealth | Resources & Documents. Investing involves risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time. The information provided should not be relied upon as investment advice or recommendations and should not be considered specific legal, investment or tax advice.