Teaching Your Children About Investing

March 13, 2013

in Investing

By Eileen Tan and Ui Wei Teck (guest contributors)

If you can get your teenage children interested in investment at a young age, you deserve a big round of applause! By starting young, not only will they benefit from a longer investment duration, they will also gain from the power of compounding when they re-invest their returns.

For my children, they are not interested in investment yet. To them, pursuing their dreams is more important. We will, of-course, support them in the fields they are passionate about. Even though they are not interested in investing yet, it is crucial to help them get into the habit of saving. When they are older, they will need it to buy their first property at the appropriate time.

Imparting financial literacy

There will come a time when our children are interested to know more about investment and that’s when we can impart our financial literacy. My children have good saving habits and put aside one third of their pocket money into a separate savings account.

We will encourage them to start investing in the STI ETF when they turn 18 years old by putting in just $200/month, and increase the amount or buy into some stocks at later stage. They can then use this fund to buy their first property when they are ready. When they have a keen interest to learn more, we will be so happy to see them joining our Learning Group to learn, share and grow together.

If you or your children can start early without the pressure to make ends meet, you will have all the time in the world to learn the right skillset and the right mindset to benefit greatly from it.

The most important message

The most important message to the Learner is: Do not give up in your investment learning journey. It is common to lose some money when you are learning. Do not give up just because you cannot make money yet, but learn from experience and make every failure a step closer to your success.

This is an amazing way to have an additional source of income by owning part of a business, without having to operate it. So be committed to be financially savvy and practice continuous improvement on your learning journey.

 

By Eileen Tan and Ui Wei Teck, authors of Enjoying Mid-Life Without Crisis.

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