Are you a parent who’s concerned about your child’s future? Constantly find yourself thinking about if they’ll have a successful career later in life?
Well, guess what – it doesn’t really matter what they choose as long as their understanding of the real world is early and they progress to make more controlled decisions every day.
As an adult, we understand that authority is everything. Be it an investment or a drive on a sunny day over the highway, as long as we’re in control – we’re happy. I don’t know how many of you look at it like this, but Happiness is the key asset that we chase throughout our lives. It’s bigger than a fancy house or the sports car around the next block.
But in order to do this for our children, how can we talk to our them about value investing? Talking to your child today about money investing may not interest them. And if you’re planning to put a few hundred dollars into a trading account just to teach them – that’s worse. If they lose the money, they’ll unconsciously switch off this mode of investment, on the other hand, if they end up making some profits – they’ll try to make bigger bets – which will more certainly convert into a bigger problem. So how are we supposed to bring them up to speed with the financial competition of the real world?
Use real-life examples to teach them time value of money.
Sow a seed with your child and let that blossom into a plant and then a tree full of fruits. Show them how a few months of care has helped in them relishing the fruit today. To understand that the journey contributes to creating the result is very important.
Tell them about companies wherever possible.
The best time is when your child pushes you to buy her/him something. Talk about the utility of the product, and also about its origin. So the next time that chocolate bar or soda you buy they get to understand about companies like Hershey’s and Coca-Cola, where they come from and where they are today.
Start investing for them. Teach them at the right time.
While I mentioned that a real money game at a very early age can result in demotivation or real betting traits, you can instead create a budget with life goals of your child – gauge when is the time to tell them about it and make them learn how you perform actions. Start as early as you can.
Say you’re envisaging higher education for your child 20 years down the line – what do you do? Align your financial goals and start saving today! As and when your child is 15, it’s time to reveal what you’re saving for them. At that age, children take interest and are highly motivated to become a part of the working group of the world.
Once they understand planning, give them a budget to save and invest.
Once they’ve understood how you plan for your own life goals to achieve them, they can do the same. They can actually orchestrate their life according to their financial goals, the way they want to.
If you invest INR 1000 every month, you can accumulate INR 1,00,00,000 when you’re 40. This definitely interests your 16-17 year old. (25 years of 25% returns in a growth MF)
Let them make mistakes. But make sure you give them the lessons around it.
Making mistakes, taking chances and failing are paramount for anybody’s learning experience. Once you feel that your child is ready to face the world, always encourage them to take chances, even if at the cost of making mistakes. Don’t protect your child, rather making them immune to such failures and help them focus on the learnings they get instead of the outcome.
By taking these simple steps, you can almost ascertain that your child will achieve in life what you may/may not have. Start today, give it your time and persistence.
All the best!