There are better ways to invest for your child than just stuffing all their money in a jar. You can be setting your child up to have a better and easier life than you did. The importance of this is that your child will have a greater chance of success and achieving their life goals. This article will help explain why you should invest in your child from the time they are born and what happens when you do so.
- TO FINANCIALLY PROTECT YOUR CHILD
In the unfortunate case that something terrible happens to you, your child will still have money to take care of themselves. You can protect your children from all kinds of harm financially, even if you are not there to provide for them yourself. For example, investing in health insurance can protect your child if they get sick or injured, and life insurance can provide for them financially in the unfortunate event that something happens to you. They can also be nominated as beneficiaries of your will to make sure they are looked after even if the worst should happen.
- TO GIVE THEM THE EDGE IN LIFE
Parents should invest in their children’s education, so they have the best opportunities in the future. Still, it shouldn’t stop after school or university – you should continue investing for them right through to adulthood. You should make sure your child can get ahead in life by investing throughout their career, no matter at what stage. For instance, you could invest in a share portfolio that will increase in value over time and provide your child with an additional income stream later on down the track. Your investments can also be passed down to further generations, so you are giving your children a greater chance of success in life.
- TO ENSURE YOUR CHILD IS FINANCIALLY LITERATE
Your child will have a higher chance of being financially fit if they have been taught about money since they were young. It is never too early to begin teaching your child about the value of saving and putting money into investments. You can train your children about what they need to do to achieve their goals with financial education programs. If you have already started teaching them about the value of savings, you are off to a great start! You could even consider opening an account for your child so they have their bank account and learn how to manage it.
- TO ENSURE YOUR CHILD GROWS UP WITH A SENSE OF FINANCIAL RESPONSIBILITY
Teaching your child about money will also mean that they are likely to be more responsible on the whole. Many people struggle financially because of irresponsibility with their finances. If you are teaching them right from an early age, they will learn how to manage their money well and avoid many mistakes that other people make.
- TO GIVE THEM A SENSE OF SECURITY
Investing for your child from the time they are born will help them feel safe and secure as adults because they have money set aside. This is particularly important in comparison with other generations, as it can be more difficult to find a job that provides you with security. Investing for your child will help them feel safe and give them peace of mind, knowing that they are on track financially.
- COMPOUNDING BENEFITS
When you invest for your child, the money they receive from their investments produces even more income. This is known as compounding, and it means that your child will have more and more money over time. You can help them maximize this by choosing investments that are likely to give the most significant returns, for example, stocks or property.
- PROBABLE ENTREPRENEURSHIP
Your child will likely want to branch out on their own one day, so they must be ready for this. Investing for them right from the start gives them a greater chance of success in life and helps them get ahead with their career. By investing early, they will also have more time to learn how to be responsible with their money. For example, Mark Zuckerberg’s parents invested in his company when he was in high school, and now Facebook is worth an estimated $400bn. Jeff Bezos’ parents also invested in Amazon initially, and in 2015, he was named the wealthiest person in history.
There is no time like the present to start investing for your child from when they are born! If you want to protect them, teach them about money, give them a sense of security and give them a head start in life, then you must invest as much as possible for your child. Ensuring that you set up investments for your child as soon as possible is of great benefit to them in the future as this will give them time to compound and gain the benefits of investing. All of these benefits will give your children the best chance at success financially in adulthood, which will lead to happiness and contentment. So when it comes to investing, don’t wait until tomorrow – start today!