All in all, the best value parents can teach a child is arguably the value of money. This should be begun well in advance – from the childhood days – so that later in life the kid will have some idea as to how to handle this most vital resource efficiently. He would have a mind to save and save up. This equips him for the realization of future goals, for spending wisely on utilities, and maybe even for financing his own studies.
Get your child to invest in small amounts when you think he’s old enough to handle it. There’s internet banking facility nowadays, or if not, traditional local banking; choose whichever is convenient. The interest rate should be the main criterion for the choice of account. A savings and checking account can be had, if the child is mature enough. Trivial expenses can be made out of the pocket money, as far as the first tentative steps go. Gradually he’ll learn about managing finances and saving up for the future.
It is good to have savings bonds purchased in the child’s name, if you have the money to fund investments spanning a period exceeding 10 to 15 years.
Buy good quality stocks of companies. Seek the help of a financial adviser before investing. The adviser should be reliable and competent enough. This is one of the best ways to invest money if the child is of a young age, and does not need require the money in the near future. Try and make him understand as much as he can the intricacies of the capital market.
Subscribe to a mutual fund, which is also a good way of investing. It helps to grow the capital in a diversified way, and also helps in the long run. You are never stuck with the performance of a single company as in the case of stocks, where there are such chances. Mutual fund investments purchase stocks of different companies and bonds from different sources, to diversify their investments.
Some of the best ways to invest money, for a child, have been given here. You may teach your child to learn these initiatives, and get him to practice them during later years.