When I was about 25, my great-uncle decided he wanted to help me financially.
He told me that he didn't want to give me the money because I might blow it all on dresses, and to be fair that is something my 25-year-old self might have done.
So he decided he would pay off my HECS debt, which was roughly $10,000.
Younger readers will note that I went to uni in the 1990s and it was less expensive than it is now. Obviously I am lucky both to have a small debt in the first place and a benefactor who left me with no debt at all.
It was a kind gift, made in sad personal circumstances, and I'll always remember him with gratitude.
Yet – and I mean no disrespect to my late relative – if I knew then what I know now I would suggest something different.
You see, my great-uncle was a successful share investor. Imagine if he had given me a $10,000 share portfolio, coached me in the basics of investing, and encouraged me to add to it myself.
First, there's the financial difference.
A HECS debt is one of the best forms of debt you can ever have, because it only increases at the rate of consumer price index (CPI) inflation and you only pay it when you're earning a certain amount of money.
If my $10,000 HECS debt had been left untouched between June 2001 and March 2017, I would still owe less than $15,000.
In reality, as I already earned over the HECS threshold in 2001, I would have continued to chip away at it each pay day, except for the seven years I spent working overseas.
Meanwhile, if I'd invested $10,000 in the ASX200 in June 2001, and signed up to reinvest the dividends, it would have been worth more than $40,000 by May 2017.
The ASX200 delivered a 9.13 per cent annual return or 302.52 per cent in total over that time, but only if you reinvested dividends. The growth based on price change alone was only 3.15 per cent a year – and interest rates were higher than now, so even my savings account did better over that time.
Second, and more importantly, it would have opened my eyes to the effectiveness of investing in shares and the power of compound interest.
My uncle's coaching would have been invaluable, but experience is the best teacher of all. Actually owning shares might have fostered an interest in learning more about financial markets and investment analysis.
Just like the proverbial man who learns to fish, if you teach a woman to invest, you feed her for a lifetime.
If I had saved just $100 a month and added it to the $10,000 my uncle gave me, after 16 years my nest egg would have grown to more than $80,000 because of the power of compound interest. (Of course it's possible I might have out-performed, or under-performed, the ASX200.)
Since HECS debt is deducted from your pay automatically, along with income tax, my relative's gift meant I had a bit more in my take-home pay in the intervening years. But I wasn't a very good saver in my 20s, so I probably did fritter a lot of that away on dresses and travel.
Of course, it's possible I could have sold the shares to fund my lifestyle or pay credit card debt. There's always superannuation for kindly relatives who want to avoid that possibility.
But I don't think that's what would have happened. If I were given the share portfolio with a clear expectation that I wouldn't draw on it until I needed it for a house deposit, and my uncle checked in with me every year to see how the portfolio had grown, I can't imagine that I would have betrayed his trust.
Luckily it seems today's 20-somethings are a bit more clued-up about personal finance and investment than I was at their age.
Millennials – anyone who came of age in the 21st century – have been dealt a raw hand in the property market. Their ability to afford a home has nothing to do with avocados, a topic I explore along with my colleagues Jessica Irvine, Matt Wade and Ross Gittins in the new It All Adds Up podcast.
But in other ways they are doing so much better than I was at their age.
The ASX Australian Investor Study, compiled by Deloitte Access Economics, reveals that the proportion of 18 to 24-year-olds investing outside superannuation has doubled from 10 per cent to 20 per cent over the past five years. The proportion of 25 to 34-year-olds investing has increased from 24 per cent to 39 per cent over the same period.
For the population in general, 37 per cent of Australian adults own investments through a financial exchange, and 31 per cent own shares.
That means the 25-34 age group – most of Generation Y – is more likely than the average Australian to hold investments available through a financial exchange, including shares. I'm genuinely impressed.
Online share trading platform CommSec has also noted the trend. More than half of all new customers to CommSec are under 35, and overall Millennials represent 28 per cent of all active CommSec accounts.
Another trend is the embrace of technology. ME Bank did a survey of 1500 Australians earlier this month and found 49 per cent of the general population track their expenses electronically to prepare for their tax return, but 58 per cent of 18-34 year olds do.
This age group was slightly more likely to use a spreadsheet than the general population, but much more likely to use an accounting program such as Quicken or Xero or a mobile app such as ASIC's TrackMySpend.
To be fair, I've always been pretty tech-savvy. Perhaps I could have taught my uncle some new tricks in return.
Caitlin Fitzsimmons is the Money editor. Follow her on Facebook or Twitter.
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