Share Builder Plan for the Little
This man is oh-so-familiar?
His investment strategy has been well published, read & known. Almost everyone yearns to be like him (I think), yet not everyone is discipline enough to work towards it.
I do not have deep pocket like Buffet does so I follow this guy more closely instead. :)
I admit that I don't model my investment strategies 100% after Warren Buffet. I have a mixed one. During the Lehman crisis in 2008, I took the opportunity to short the market (sell without scripts). I turned long (buy) in 2009 & sold my holdings in 2010 when STI hit 3100. Thereafter I only do swing trades, until now.
But I understand the beauty of dollar-cost-averaging investment method (by investing a fixed amount of funds consistently every month over a period of time, dollar cost averaging benefits you regardless of price fluctuation. You purchase more units when the price is lower and fewer units when the price is higher). As you can see from the Straits Times Index near 20-year monthly chart below, although there are ups & downs, the mega trend of the Index is upward.
So, after having discussed with the father about this, we decided to open a Share Builder Plan (SBP) for AJ.
As AJ is still a minor, he has to open a joint-account with me (or any related adult). It is called a SBP joint-minor account. We dedicate a sum of money monthly to purchase the stock(s) or the Index for him. We believe SBP will reap better returns than regular savings plan offered in any banks.
There are many people out there wishing to be financially free but do not know how. This is 1 way we, as parents, do our part to educate the little one. He has already read The Timeless Gift & has some vague ideas what is investing. Still, he is a young boy who is not mature enough to understand most of the things. We will coach him along the way for sure.
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| Warren Buffet |
His investment strategy has been well published, read & known. Almost everyone yearns to be like him (I think), yet not everyone is discipline enough to work towards it.
I do not have deep pocket like Buffet does so I follow this guy more closely instead. :)
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| 胡立阳 |
But I understand the beauty of dollar-cost-averaging investment method (by investing a fixed amount of funds consistently every month over a period of time, dollar cost averaging benefits you regardless of price fluctuation. You purchase more units when the price is lower and fewer units when the price is higher). As you can see from the Straits Times Index near 20-year monthly chart below, although there are ups & downs, the mega trend of the Index is upward.
So, after having discussed with the father about this, we decided to open a Share Builder Plan (SBP) for AJ.
As AJ is still a minor, he has to open a joint-account with me (or any related adult). It is called a SBP joint-minor account. We dedicate a sum of money monthly to purchase the stock(s) or the Index for him. We believe SBP will reap better returns than regular savings plan offered in any banks.
There are many people out there wishing to be financially free but do not know how. This is 1 way we, as parents, do our part to educate the little one. He has already read The Timeless Gift & has some vague ideas what is investing. Still, he is a young boy who is not mature enough to understand most of the things. We will coach him along the way for sure.
Have you started teaching your child on financial literacy?
PS: I happened to chance upon this series of Young Investors by Money Mind (Channel NewsAsia) & I thought it is worth watching. You may like to click on the link to watch.
Interesting post..Maybe I can start planning something for my lil one soon..
ReplyDeleteCertainly, Priya! Compounding effect is very significant when you start really early.
Deletethis is nice information. but i am wondering if interest is something that is needed for little ones.
ReplyDeleteYes, certainly, Amarnaik. But I'm quite sure majority of them will have the interest to be financially free, thus will be keen to learn.
ReplyDeleteThis was a very interesting post! As they say; you learn something new every day!
ReplyDeleteI wish I had learned about investments earlier on in my life. Definitely teaching my daughter now. Great information!
ReplyDelete