To all parents, this is your sign to start teaching your children how to plan for their future through investing! Financial security is an important matter to be taught to young minds as it gives them a sense of independence and organization. Preparing for their future is important in order to provide their lives with ease. Financial literacy should be known by everybody, that is why it is important to teach financial security, especially about investing for students and beginners. 

This blog serves as a guide for parents to get their children interested in venturing into the world of investing. It tackles concepts such as real estate investing for beginners and stocks for dummies. Every parent desires prosperity for their children. We have a big part in shaping their future, so browse through the blog and equip yourself to inspire your youngsters to venture into the world of investing!

Parents are the First People to Influence the Lives of Their Children 

For all of the parents out there, how can you say that you have successfully raised your children?

For sure, some of you might define successful parenthood as having children that live in accordance with the values and the skills that they were taught ever since they were little.

Parents, as their children’s first teachers, are responsible to develop their child’s sense of independence and organization. Handling finances is one of the most complicated life skills that we, parents, should impart to them. Familiarizing children with financial matters is a big step in teaching them how to make decisions and rely on themselves as they venture into their life’s journey. Financial literacy should be known by everybody, that is why it is important to educate them about financial security, especially about investing for students and beginners.

1.Introduce the Concept of Investment

Engage them in conversations that concern financial matters. Introduce them to the topics that revolve around investment and risk-taking for beginners. It is also essential for parents to explain it to them in simpler terms catered to teach stocks for beginners. In line with this, parents must thoroughly explain the concept of investing in terms of using the 5W-1H method.

Identify WHO to Connect With

Identify the roles of stockbrokers, finance managers, and firms. Emphasize the importance of confidentiality and trust — wherein they should be aware of whom to give it to.

Understand WHY You Want to Invest

Expound the importance of creating long-term goals and help them visualize how they want their future lives to turn out. 

Determine WHAT Your Risk Tolerance is

Explain that investors must be equipped to take risks and to cope up with financial losses. Not every day is a sunny day.

Know WHERE You Plan to Invest

Introduce them to the different avenues to invest! (All avenues are explained in the 2nd step!)

Learn WHEN to Invest

Determine your child’s financial stability and the abundance of his/her knowledge about generating passive income. This is to get them ready before actually entering into investing

Establish HOW You Will Strategize Your Investment

Explain that there are varying methods in order to succeed in investing!

TIP: Enroll them in interactive online courses such as in stocksed.com that cater to teach stocks for dummies!

2. Sustain Their Interests in Financial Matters

Now that your children have a grip of what investing is, you must encourage them to think long-term. Throughout this process, help them set goals by giving concrete examples about what they should aim for. You may open up about paying for their college finances, starting businesses, buying cars, or even traveling places. You must also be attentive to their questions related to keeping their interests soaring.

Download and let your child/ren answer this printable worksheet titled “My S.M.A.R.T Goals” and guide them as they visualize how they want their middle-aged life to turn out!

3. Let Them Invest

Once you have already gotten their interests in handling finances, introduce them to the different avenues of investing. Listed below are some of the most common ways for your child to generate passive income in the Philippines.

TIP: Answering Investment Risk Tolerance Assessments help you determine what your strengths and weaknesses are in creating your investment strategy!

GInvest

Minimum Initial Investment Deposit: Php 50

This feature of the GCash app is the most simple, most accessible, and most affordable way for beginners to begin their investment journey! 50 pesos, a smartphone, and the GCash app is all that you need to start growing your money. The app also gauges how much you are willing to risk in order to guide you with the right investment option.  Lastly,  it also provides a hassle-free cash-in and out system given that everything’s accessible in GInvest. 

Stock Investment

Minimum Initial Investment Deposit: Php 5000

Stock trading for beginners may seem overwhelming. But trust me, it’s just as easy as 1, 2, 3! Engaging in stocks make you a part-owner of a company, making your earnings depend on the financial success of the company you choose to invest in. Therefore, It is considered as a high risk, high reward type of investment.

Bonds

Minimum Initial Investment Deposit: Php 8000

In contrast with stock investment, bonds are described to be of low risk with low reward. Your earnings would not depend on the success of the company, but would rather give you a fixed amount over a certain period. 

PAG-IBIG MP2

Minimum Initial Investment Deposit: Php 500

Part of the PAG-IBIG program, this second cheapest option offers a tax-free, risk-free, and a short-middle term investment plan. PAG-IBIG MP2 is a voluntary program wherein one can earn through dividends — a portion of a company’s profit through dividends. 

SSS PESO Fund

Minimum Initial Investment Deposit: Php 1000

The SSS PESO (Personal Savings and Equity Option) Fund is a voluntary investment program wherein all SSS members are eligible to apply. It caters to people who want to make the most out of their post-retirement life. It is risk-free and tax-free, wherein earnings are accumulated through compounding interests. 

VUL Insurance

Minimum Initial Investment Deposit: Php 1,300-1,500

Combining insurance and investment in one, it is ideal for parents to apply for their children in order to safeguard their future such as their education. These types of insurances are handled by fund managers. Hence, making it ideal for beginners who have little to no knowledge about investment. VUL insurances allocate 5% to the cost of insurance, while 95% goes to investments. Just like stocks, it is also high in risks as it does not guarantee returns. 

Real Estate Investing

Minimum Initial Investment Deposit: 20,000 pesos

Similar to stock trading, real estate investments are also dependent on a firm’s shares for earning, but in the form of properties and lands. Real estate investing for beginners might be a bit challenging compared to the others mentioned in this article, which is why it is considered to have a high-risk high reward ratio. It is ideal for long-term investors given that it deals with properties, such that land appreciates through time. Investing in rental properties that comprise this type of investment is the most ideal investment for starters. 

Mutual Funds 

Minimum Initial Investment Deposit: 5,000 Pesos

Mutual funds are the collated investments from different allocations such as in stocks and bonds. Investing in mutual funds is one of the most ideal for starters given that skilled financial investors would be the ones to handle and decide for the best investment options to increase your assets. 

UITF 

Minimum Initial Investment Deposit: 5,000 Pesos

Unit Investment Trust Funds (UITF) are for long-term plans and are considered to have a high-risk-high-reward ratio. UITFs affect your share earnings as it is dependent on the fluctuation of interest rates and the performance of the market.

Let us all Invest for the Best!

Now that you already have a grip on how to introduce your children to investing, it is high time for you to let them experience how to make independent decisions and how to take risks!

Wealth investment has become more accessible throughout the years, that is why it is important to provide opportunities in investing for students and beginners. For parents, immerse your children in your daily financial decision-making activities to train them on how to minimize risks when investing.

As parents, we should always guide them while allowing them to explore independently. Applying the three (3) steps to introduce investment and stocks for beginners is a great step towards increasing financial literacy and promoting financial security. 

So what are you waiting for? Inspire your children to venture into the world of investing! Allow them to grow their money, in order for them to live their lives fully!

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