Features
Omolola Olorunnisola: Investment Products to Gift your Child this Season
It’s my favourite time of the year. Everything about Christmas excites me – the decorations, the food, the time spent with family, and the positive vibe. It is a season when it seems like everything will be all right, no matter what the year has been like, and you’ll agree with me when I say 2020 has been a year and a half.
Then there are the gifts! Families give each other gifts, companies give employees gifts, and friends exchange gifts. Basically, a lot of gifts exchange hands in this season. In my extended family, we have this Christmas tradition of Secret Santa where you pick each other’s names secretly and openly exchange gifts. While some gifts have been impressive, others have not been so great. It is great to give lovely and thoughtful gifts but it is better to give gifts that have long-term rewards, gifts that add to people’s lives. One of such gifts is investment products.
Investment products are usually not the first thing you think of when in search of gifts but they are one of the best gifts you can give anyone. They add to your net worth and if managed properly, and continue to multiply over the years. In fact, some investment products are like fine wine – they get better with old age. Here are some of the best investment products you can gift your kids this season:
Investment Plan, a Budget Workbook, and an Expense Tracker
An investment plan is vital to the success of investments. If you want your child to start investing early, then one of the gifts you can give is an investment plan. An investment plan puts structure to your investment, it states clearly what you should invest in at different points in time and when to exit investment positions. An investment plan will definitely put your child in the right frame of mind in terms of investment. Talk to an investment advisor on how to put one together or send me an email and I’ll help you work one out. A budget workbook will help them effectively allocate funds while an expense tracker will help keep track of how they spend money. There are apps that help with budgeting and keeping tabs on expenses. Simply download one to get started.
An Insurance Policy
This is one of the most underrated financial assets in Nigeria mainly because of the distrust between insurance companies and the people. But an insurance policy is a must-have if you’re going to build a profitable investment portfolio. Emergencies don’t inform you before they happen, that is why they are called emergencies. You don’t want to dip your hands in your investments when you have an emergency situation. One of the most important insurance policy to have as a parent is a health insurance policy that covers the whole family. Another important insurance policy is a life insurance policy. Depending on your age, you can get a life insurance policy with a cover of N1,000,000 with as low as N10,000 a year. A life insurance policy protects your family from being financially stranded in case the inevitable happens. An education insurance plan is also a good insurance policy to own as a parent. It ensures your children’s education is not interrupted in difficult situations. There are a number of credible insurance companies, reach out to them for proper guidance.
Financial Literacy Books
Knowledge is light and it comes from books. One of the easiest ways of introducing financial literacy to children is through books. Thankfully, there are a number of books that pass this message across properly, one of which is A Chair for My Mother by Vera B.Williams. The book narrates the story of how a young girl and her grandmother worked together to get a gift for her mother. It is a good book for 5 to 10-year-olds. It introduces them to the basics of financial literacy. Another book that would come in handy is Rich Dad, Poor Dad by Robert Kiyosaki. This book will come in handy for teens as it highlights money lessons the author learned from his rich and poor dad.
A Child Trust Fund
I know a lot of people will raise their eyebrows at this but a trust fund is not so expensive. You can get a trust fund in Nigeria for as low as N500,000. A child trust fund makes sure your child is adequately catered for. There are different types of trust but the two notable ones are revocable and irrevocable trust. A revocable trust is one that is set-up in such a way that you can make changes to it while you’re still alive, while an irrevocable trust doesn’t allow for that. An education trust fund, for example, ensures the education of generations to come is taken care of. Talk to a trustee for proper guidance on this.
Other investment products you can gift your child are money board games like monopoly. Monopoly is an essential tool for learning financial literacy and, thankfully, we have a Lagos monopoly. It will make it easier for kids to understand.
Teaching kids about money requires creativity. A Christmas gift can go a long way in helping you drive home your financial literacy lessons.
***
