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Not only is it a great way to teach them about the value of money from an early age, it can also be a lot of fun and a great way to spend time together.
Getting things started
While there are a number of ways to get the ball rolling, probably the best first step for you and your child is to visit the New to investing section of our website, which explains how investing works in a way that’s simple and easy-enough for just about anyone to understand.
Once you have the basics figured out, the next step is to find out which funds are best suited to your child’s investment horizon, objective and risk profile. This is really where the fun begins! Each of our funds have different objectives, which means that the assets that they hold are also different. Some funds are better suited for longer investment horizons, while others are more suited for short-term investments. Depending on whether your child wants to invest towards a new bike in two-years’ time, or a brand-new car for their 18th birthday… we have a range of options for them to choose from. Try our Fund Selector Tool to help you navigate the different options and to see which funds best meet your (and your child’s) investment objectives.
At this stage you may be wondering how much starting a new investment will cost. The good news is that it’s relatively inexpensive. In fact, at Prudential you can start a new investment for as little as R500 a month. Your child can also add to their investment at any stage, which is a great option for when Gran and Grandpa come fishing for birthday present ideas.
And finally, once you know which funds you want to invest in and how much you would like to invest, the next step is to complete a new investment application form. Fortunately, gone are the days when these forms involved having to complete pages upon pages of information. With Prudential, you can now complete the entire investment process online in under 10 minutes.
Checking in from time-to-time
One of the benefits of starting a new investment with Prudential is that we will issue you (as their legal guardian) with an online account that will allow you and your child to monitor their investments online. This is a great way for you both to see how it grows or shrinks, depending on how markets have performed. You’ll have the chance to talk through factors that influence investment performance and broaden their understanding of things like politics and economics and how these factors influence investment performance. And in case you don’t know anything about either of these topics, have a read through our fund commentary and investment-related articles on our Insights page, which is packed full of useful insights and information.
Another important lesson your child can learn through investing is the value of patience. If you give your investment time to grow, and stick to your original timelines by staying patient through the inevitable market downturns, you and your child will likely be rewarded with meeting your goals.
While an investment may not seem like the most exciting gift in the world, and probably isn’t on any of your child’s top-ten wish lists… if you play it right, starting an investment for them could be a lot of fun and teach them important life lessons which may very well give them a competitive edge in years to come.
For more information, please speak to your financial adviser, call our Client Services Team on 0860 105 775 or email us at query@prudential.co.za.
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