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How to Start Investing For Your Child

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eToro is a publishing partner of CoinGecko

Warren Buffett started investing when he was a mere 11-year-old. While not all children will get inspired to invest after reading a book in the library, they still do deserve a comfortable future. As parents, it is your duty to prepare for times that require large amounts of money such as paying for a University education or unexpected medical expenses. While you could put aside money into a savings account, it would be better to put that money into an investment so that the value will grow over time.

Know What to Invest In

Yes, you’re investing in your child’s future. But what would that future include? For most parents, that would mean their child’s education, medical expenses, living expenses, and emergencies. You would need to consider these expenses as long as they are under your care. The benefit of starting such an investment is so that they could have a headstart in life as well as a smooth transition into independent adult life.

Decide Where to Invest

Once you know what to invest in, you have to look into where you should invest. There are many investment options available and it can be confusing at first. You may want to seek out a financial consultant who will give you the best options. All that is required of you is that you know what you need and what value you want to get from an investment. Remember, this is a long-term game. You don’t need to take out any money until it is needed. You would just have to put in the necessary amount each month and observe the compounding effect about a decade or so later.

Investing in Stocks

A stock is a type of investment that represents the ownership of a fraction of a company. You may often hear the phrase ‘investing in a share of a company’. When you purchase a company’s stock as an investor, you are essentially purchasing a small piece of that company. If the company does well, the value of the stock increases and your money grows. Over the long term, despite the ups and downs, you may see an overall profit from your investment.

Investing in Crypto

Cryptocurrencies are digital assets that can be used as investments as well as for purchases online. Unlike fiat currencies, cryptos are traded between consenting parties without the middleman or broker. The transaction is tracked on digital ledgers that are immutable. While this is a riskier investment than others, the gains can be large. But if you stick to well-known and relatively stable cryptocurrencies, and put your money in for the long-term, you may see an overall profit just like you do stocks.

Insurance Funds

Insurance funds, like an education fund, will cover your child’s education as long as you pay insurance premiums each month for several years. These can earn dividends and bonuses when the insurance policy reaches maturity, i.e. when your child needs the funds. Most would opt for such insurance funds because it’s almost a guaranteed coverage for a part of your child’s future.

How to Get Started Investing For Your Child

Like it or not, it is your duty as a parent to provide the best for your child. To ensure that they get a good education and ensure that they don’t go into severe debt when encountering unexpected medical emergencies, you would need to get started with investing as early as possible.

So head over to your bank and ask them questions about investment options. Pick up a few books on the topic so that you have a broad view of things and so that you don’t settle on the first option available. To be even more certain, reach out to someone in the industry or a financial consultant who could guide you even better.

Education Starts At Home

If you’d like your child to be the next Warren Buffett, teach them young. Talk to them about the importance of saving money. You may use interesting stories and simple language to help them understand. Perhaps you could also enroll them in an interactive course for children. These efforts are to help cultivate interest and awareness of personal finance so that they may grow up to be financially responsible.

eToro is a publishing partner of CoinGecko

eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. 
 

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