Systematically - this is one of the keys that open the door behind which a new chapter of young people's lives with some financial support awaits. Even relatively small amounts of money can be saved over many years, and it is possible to save a considerable sum. However, this is only one form of saving money for a better future.
Wealthy parents may consider, e.g. a mortgage. However, if it would be too expensive for the household budget, there is still a way to invest in bonds, shares, currencies.
When will you get your first salary? When do you move out of the house?
According to research conducted by TNS Polska, your child will be 22 years old when they get their first paid job. This is an averaged figure, which should not be equated with full independence and financial self-dependence. This will happen more than five years later.
According to Eurostat data, young Poles are moving out, approaching their 28th birthday. This is much earlier than, e.g. inhabitants of Serbia, Montenegro, Croatia, Slovakia, Malta or Italy, who leave their parents for good when they are already in their thirties, but much later than, e.g. young Swedes, Danes, Estonians, Germans, Finns or the Dutch. Statistically, they become independent long before their 25th birthday.
Even if, like the most developed EU countries, these thresholds in Poland will soon be moved as well, which means an earlier debut on the labour market and move out of the family home, it is possible to boldly assume that a 25-year-old child will still be dependent on the help of his or her parents or guardians.
To help them start their adult life and get an education, savings will be useful. The earlier you begin to accumulate them, the greater the chance that you will gather enough money, e.g. for the studies, internships or efforts to get their first permanent job, namely the stages of increased expenses when a young person already has costly needs but is not yet able to finance oneself.
Key guiding principles for every beginner investor
Accumulating money in a bank account is quite an affordable form of saving. Great knowledge leads to investment. How to get down to it and is it really an area reserved exclusively for experts?
Bartosz Grejner, market analyst at Conotoxia.com, claims that investing is not a too complicated activity. Nevertheless, there are elementary rules that are worth knowing and applying in order to increase the probability of investment success.
The first one, which may seem trivial to some, will be to define the investor's target. We set a time frame, e.g. 20 years, and the amount that should be higher than the one we would have gathered on a savings account or a deposit. In the current reality, the matter seems to be all the easier because the interest rate on deposits has fallen to a record low level.
With inflation exceeding 3.5% and an average of just under 1.5% per year, the money kept in the bank is losing value because the interest does not compensate those who save for price rises.
Meanwhile, the investor's goal is profit. Therefore, once the investor has defined the timeframe and the amounts involved, he/she can move on to the next rule. In a word, it can be classified as diversification.
In a broader context, it is about avoiding placing everything on one card, because it can turn out to be risky and unsuccessful, and it is about securing money for a better future for our child. The way to reduce the risk, in this case, is to choose different investor tools. And one of them may be the aforementioned deposits, but also other banking products dedicated to people who are ready to make regular deposits to the account in the long run and not to use the accumulated funds for the declared period of, e.g. several or more years.
The following are also to be considered: bonds, currencies, equities, precious metals, shares in funds. It is worth mentioning that today licensed Internet platforms enable the safe and fast purchase of currencies from all over the world at favourable rates.
The Conotoxia.com portal offers 24-hour access to 27 currencies from different parts of the world.
In investing 101, there is also the principle of holding an emergency fund. Although, in the name of making a profit, we will accept the impossibility of accessing most of the invested funds for a few or even more years, it is worth keeping the gateway to a quick possibility of reaching for some of them.
Money from the so-called emergency fund may prove useful when an unexpected need or sudden occasion arises in the life of our child.
Loan? If someone can afford it, it may pay off
Another investment rule may seem controversial. It assumes that debt does not have to be the investor's enemy, and it may turn out to be a valuable ally.
We are not talking about consumer loans for the purchase of, e.g. the latest game console for our child or for financing exclusive trips, but about buying a piece of land or real estate in instalments, then the probability increases that the debt incurred will pay off.
If repayment of the loan does not significantly affect the family's standard of functioning, such an investment may prove to be justified. Mainly because until our offspring become an independent user of the apartment, one can rely on the profit from rent, which will reduce the cost of the loan.
Investing has more than one face
The first associations with investing lead to the stock exchange or real estate market, while probably the best form of investment may be education. Here, too, there is a case indicating that it is usually a good idea to take out loans. If, for example, borrowed money finances our daughter or son's foreign studies, which will result in finding a lucrative and exciting job, the expenses will most likely pay off.
Professional training courses or language camps, training, certificates and all practical skills useful in the labour market can be equally valuable.
It is first necessary to calculate whether a given course or selected foreign studies will translate into higher earnings or a more stable position on the labour market. The assessment complements the list of investor rules. Before making any financial decisions, we should consider their possible consequences, especially when it comes to gathering money for a better future for our children.
Relying on one's own feeling or opinion, even if one adviser is professionally involved in the investment sphere, should not block the basis for making key decisions. Therefore, if we give up the simplest form of saving, deciding to invest in financial instruments or real estate, we should act with caution and rely on the knowledge of at least several experienced experts.
Not every young person is lucky enough to get an apartment from their parents on their 25th birthday. If the financial situation leaves no margin for postponing substantial savings, it is not worth doing it by force.
The minimum amounts declared on the savings account may be much lower or there may not be any. Satisfying children's elementary needs, a healthy atmosphere in everyday family life as well as contact between parents and their children may prove to be much more valuable than the capital built over the years.