Teaching your child how to invest is like teaching them how to ride a bike, write, or paint. You introduce them to all these things by starting with the basics at an early age, which will help them get better acquainted as they grow up, and eventually be able to do those things by themselves.
When it comes to imbibing the good culture of investing in children and ensuring they have a stable financial future, it is important to note that there is no such thing as ‘too early’, and getting the child actively involved (find fun ways to do this, eg piggy banks, Goldenbridge Young Mutuals) is a bright idea. Children are considered very smart, and easily pick up on what they hear and see, so exposing them to investment at an early age is very advantageous. As they grow, include them in discussions about money, savings and investments; it is a good way to increase their financial literacy and build their investment knowledge which would eventually play a key role for them to reach financial goals in the future.
Here are some great investment ideas to help you kickstart your child’s financial and investment journey;
SOME INVESTMENTS FOR CHILDREN
- Stocks: Due to their long-term tendency, stocks are one of the best investments suitable for children. If started early, before they become of age, the stock would have provided great returns over the years for your children.
- Mutual Funds: Opening a mutual fund is like building a portfolio that contains a larger collection of bonds, stocks and other investments. Doing this for your children allows them to enjoy a long-term compounding of returns over the years, in a diversified investment.
- Exchange-Traded Funds (ETFs): ETFs, like the Mutual Funds, hold a diversified portfolio of bonds, stocks and other securities. However, unlike mutual funds, ETFs are openly traded on stock exchanges, making them more cost-effective and liquid. Because ETFs act as high-return investments, your children would enjoy great returns over the years.
ADVANTAGES OF INVESTING IN YOUR CHILDREN
- The earlier you start investing for your children, the more time you give for the money to grow, so they can benefit from compound growth. Every small contribution is important because they compound and add up over time.
- Also, starting early to invest in your children, will help reduce the need to borrow for their education, or the need to acquire student loans later. Investing money now for their future will help pay for their education, and also establish a solid financial foundation for them.
- As parents, one of the best ways to ensure your children are properly grounded in investing, and also have the foundation they need to build long-term wealth is by opening an investment account for them, because this provides you with a great way to educate them on how it works and how it benefits them.
- Starting now to invest in your children, also helps reduce the financial strain experienced due to unforeseen circumstances. If you start now, no matter what may come later on in the future, you will rest assured that the future of your children is partly, or even fully covered.
Having established the fact that investing for your children is a very important financial strategy that will help build a solid financial foundation for their future, Goldenbridge is here to help you actualize that. Our Young Mutuals investment plan is specially targeted at parents/guardians, who wish to invest on behalf of their children under 18years of age. Funds in Young Mutuals are invested in government securities, money market instruments, and alternative investments, with low-risk levels, and capital preservation features.
Happy Children’s Day!!
