1. While it would be ideal to believe that all kids would be able to continue their existing lifestyles out of their first paychecks itself on their own, it's not always so, hence the need of parents to chip in, which is not a crime or sin committed by either of them.
2. Parents of young earners do "preach" them to save for their future, for their own good, and for their retirement, but it seems far off and unimportant to them.
3. Parents should realize that it is tough for kids to "save", because it is triggered by "fear" of the future, which they do not see it with pessimism of parents or grandparents, as they are more confident about their ability to earn, to find another job, to change vocations and pursue dreams, and thereby savings is not a natural behaviour for this optimistic generation, while spending is.
4. Kids are also impatient, want to take charge of their own lives, fight their demons of wrong education and career choices, like to set these right through corrective action, and for which they spend their earnings by avoiding their parents for such funding.
5. However, saving comes naturally to them for immediate personal goals, like studying for a better course and living in a better place, for which they will heed advice too, and when they need to be protected from plunging into stock market and commodity trading for making quick money in their 2-3 years time frame they are giving for it.
6. Youngsters are often hesitant to make choices that will help them save, because the consequent trade-off is unnatural or unacceptable to them, like always staying with parents, saving money on rent, food and other spends.
7. Also, not many youngsters can make money choices rationally and objectively, and whose happiness quotient is low, like choices between designer labels or clothes on sale, second hand or new vehicle, paying for ambience or simply good food, etc., and at such times, they need counseling, not judgemental advice.
8. Several young earners do save and invest - for a solid future, higher education, a more comfortable life - but are not well-informed about their investment choices.
9. They think that SIPs will be able to fund their higher education in three years itself because they don’t understand market risk.
10. They buy insurance thinking that it will help them save with disciplione without realizing that the return is abysmally low.
11. They plan to buy a house thinking it is an appreciating asset, forgetting that it could be more illiquid than their need.
12. Youngsters who know that investments come with specific return, liquidity and risk features and that the choice has to align with their foreseeable needs, fare better.
13. They may also not be able to take risks, even if they have age on their side, because they don't have the cushion of accumulated wealth, as risk-taking is about ability, not willingness.
14. The youth, therefore, need liquid, flexible investments, with a small regular amount in equity, which they need not access for a long while, through their normal paychecks.
15. Parents, therefore, need to help kids to spend, save and invest as per their needs, by helping them figure these out at their convenience, and can start by encouraging them to utilize their first year's earnings (within 10% to start with) to:
a) invest, through online auto-mandate, in a long-term monthly SIP in a Balanced equity fund, even by considering it as "a natural spend on parents",
b) buy an online individual health plan, and
c) buy an online term plan.
2. Parents of young earners do "preach" them to save for their future, for their own good, and for their retirement, but it seems far off and unimportant to them.
3. Parents should realize that it is tough for kids to "save", because it is triggered by "fear" of the future, which they do not see it with pessimism of parents or grandparents, as they are more confident about their ability to earn, to find another job, to change vocations and pursue dreams, and thereby savings is not a natural behaviour for this optimistic generation, while spending is.
4. Kids are also impatient, want to take charge of their own lives, fight their demons of wrong education and career choices, like to set these right through corrective action, and for which they spend their earnings by avoiding their parents for such funding.
5. However, saving comes naturally to them for immediate personal goals, like studying for a better course and living in a better place, for which they will heed advice too, and when they need to be protected from plunging into stock market and commodity trading for making quick money in their 2-3 years time frame they are giving for it.
6. Youngsters are often hesitant to make choices that will help them save, because the consequent trade-off is unnatural or unacceptable to them, like always staying with parents, saving money on rent, food and other spends.
7. Also, not many youngsters can make money choices rationally and objectively, and whose happiness quotient is low, like choices between designer labels or clothes on sale, second hand or new vehicle, paying for ambience or simply good food, etc., and at such times, they need counseling, not judgemental advice.
8. Several young earners do save and invest - for a solid future, higher education, a more comfortable life - but are not well-informed about their investment choices.
9. They think that SIPs will be able to fund their higher education in three years itself because they don’t understand market risk.
10. They buy insurance thinking that it will help them save with disciplione without realizing that the return is abysmally low.
11. They plan to buy a house thinking it is an appreciating asset, forgetting that it could be more illiquid than their need.
12. Youngsters who know that investments come with specific return, liquidity and risk features and that the choice has to align with their foreseeable needs, fare better.
13. They may also not be able to take risks, even if they have age on their side, because they don't have the cushion of accumulated wealth, as risk-taking is about ability, not willingness.
14. The youth, therefore, need liquid, flexible investments, with a small regular amount in equity, which they need not access for a long while, through their normal paychecks.
15. Parents, therefore, need to help kids to spend, save and invest as per their needs, by helping them figure these out at their convenience, and can start by encouraging them to utilize their first year's earnings (within 10% to start with) to:
a) invest, through online auto-mandate, in a long-term monthly SIP in a Balanced equity fund, even by considering it as "a natural spend on parents",
b) buy an online individual health plan, and
c) buy an online term plan.