Hello Readers! 

A child is brought up by his/her parent with good habits and good lessons of life. And when they grow young and start their career, the lesson of saving money for the future from the parents, start. Parents who are over 50 and also an investor, often initiate their millennial children into investing as soon as possible.

They guide their children with advice, suggestions to start their first step of investing journey. But where they mistake is passing the same traditional suggestion, what they received from their parents. They mistake because with the change in time and environment, they still are stuck with the old and outdated saving and investing habits, better say financial habits.

This is the first reason, if we look for the second then with a wide range of financial products available for investing today, sticking to old, traditional and one kind of financial product is completely unreasonable.

Here is a list of such advice and suggestions that parents must suggest to their child but in the developed version.

Relationship With Bank Is Necessary!

As per parents, what RM (Relationship Manager) advice or suggests is the best for their child's financial planning, so they advise their children to always be on the good list of the RM’s of their bank. Not only for the good suggestions but to get your work done fast in banks, parent advice to maintain a good relationship with the RM of their bank.

However, the time has changed and so the medium of many bank related works has changed. That’s what parents need to understand. They need to understand that now their millennial kid is hardly going to visit a branch for the rest of his/her life. There will be no occasion requesting for cheque clearance or asking for a change in denominations of 10s and 50s, nor is a higher education loan dependent on how much you invested through the RM.

Basically, parents need to realize that their children do not need to bind themselves with the RM’s advice. In fact, they need to invest in financial products that can support their financial goals and their requirement from their investment, like a good growth of their money, very less lock-in period, easy liquidity, less risk, and others. So dear parent, let your millennial kid explore their own ways for a good financial journey. Let them know about the different financial products and choose what best suits them.

Insurance Policy Is the First Thing You Must Purchase!

Traditional investment journey that is mostly preferred by our parents mostly starts with an insurance policy, what is more, outdated about this is that here policy refers to LIC pension plans, if not stated anything else. Now what pension policy will give you is a handsome Rs 8000 per month after 25 years of investment.

Here it is noteworthy to ask the parent that, whether an amount of Rs 8000 per month, 25 years after today, will be enough to cater to their child’s expenses, even in a low inflation scenario? Even assuming it will just add to the rest of his income sources, what is the return?

The insurance policy must be included in a millennial portfolio, but it will be different from the insurance policy that parents had purchased. Millennials can look forward to taking a term policy or a health insurance policy or maybe others. Basically, they would look for insurance policies that would give them support if they lose their job or on the diagnosis of major medical illness and so on.

So, before you plan to gift your child the first premium of the pension policy, I suggest let them explore the other insurance policies and let them choose which policy is beneficial for them more and go for the same.

For any kind of query you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).