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Best investment for your child

Last week, I received persistent calls from an insurance agent coaxing me to buy some insurance product. Before I could really have time to think, the insurance agent was on my door the next day.

He was such a good marketer. He did manage to convince me by sensitising me on how my children would suffer should I die without leaving behind an insurance policy.

He put before me a whole lot of insurance products and I got so overwhelmed—I could hardly make a decision. When I asked him what would be the best investment for my children, he was quick to respond ‘education’.

I couldn’t agree the more with him. Often times as parents, we have missed it. We open bank accounts or build houses that will be handed over to our children once they reach their twenties. Worse still, some parents do take the time to tell their children the assets that will belong to them once they reach a certain age.

This is committing suicide for your child’s future. They will, very likely, be lazy thinking life will all be rosy for them instead of working at getting their own wealth when they grow up.

Perhaps I have a skewed perspective, but it seems to me that investing thousands upon thousands of dollars a year for a child to spend in his or her twenties when they’re barely out of diapers seems like overkill.

Shouldn’t that money be better invested in ensuring that they have every educational tool possible available to them? Shouldn’t your role as a parent be to equip the mind of your child, not to equip their pocketbook?

By equipping the mind, I don’t just mean the formal classroom education but even teaching your children how to manage money while they are young. Yes, agreed that you need to put aside money for your children’s education. But first, teach your child how to manage money before handing them anything of huge monetary value.

I do believe that educating your child on money issues is perhaps one of the most valuable gifts you can give to them. While you will have put aside some money or asset or insurance policy for their education, giving them a small amount of money to manage over time can be a worthwhile undertaking.

They might spend it on stupid things or they might invest it in a poor fashion, but if you provide a safety net of food and shelter and advice when they’re learning for themselves, you can train them how to walk the tightrope when you’re no longer there to support them.

Sometimes show your children how you spend money. Take them shopping with them, show them prices on the shelves, and then talk with them about what things cost. While still living in your house, involve them in the finances of the house. Show them what you spend each month and demonstrate that you do save each month.

The bottom line, equipping the mind of your child is probably the best investment than equipping their pockets with huge sums of money.

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