FINANCIAL LITERACY (INVESTMENT)

AN APPROACH TO LIVE WEALTHY LIFE

       I believe that it is both desirable and possible to begin to make people financially literate at a tender age in order to make it possible for them to begin to secure their own financial future early in life. In Robert  T. Kiyosaki and Sharon L. Lechter’s Rich Dad Poor Dad, published by warner Business books we are told that rich dad started to teach his son and his son’s friend the basic principles of financial literacy when the lads were only years old in a bid to prepare them to become business owners or investors when they grew up. It should interest you to know that one of the things he thought them was how to prepare and read simple financial statements, including cash flow. His son learn the lesson well and soon began to apply them under his guidance. Little wonder that by the time he was 25 years of age he had build up for himself a substantial investment portfolio.

        Whatever career a child chooses, Nothing is more important to his financial future than that she should have learnt the basic of how to be an investor ( in shares, real estate, and in business generally) by the time he/she is leaving the secondary school, such knowledge will guide him/her for the rest of their life.

        In the contest of this write up the greatest legacy that investor in shares can leave for his children is to teach them the basic principle of investing in share and any business, when they are still young. There are different way in which you can teach your children on how to invest.   

·        Introducing them to investing in share for instance Smart Money, All things Digital, Market Watch United Breweries, Gainer and Fallers, Goldmar Sachs(Gs) Morning Star European Economic Area, Money control, time Warner (TWX), FTSE AIM All shares, Godrey Consumer production, Giuj Mineral Development, and other shares companies right from childhood. Robert schuller said that “You can count the number of seed in an apple, but you can not count the number of apple in a seed.” The potential from investing is endless. However the challenge is not but stock for buying sake but to be an informed investor.

·        Another way is, may be an investor owns share in a company producing soap or detergent (e.g. China OEM detergent companies, Aqua product detergent company, National detergent company (SAOG). The next time she buy detergent or soap from a particular company, she should tell her child that she owns a small part of the company that make it. She could then teach about saving, investing, shares, bonus shares e.t.c.

Or you might even take your child along while going to withdraw some money from the bank were the investor owns some shares. Back at home you could teach the child what a bank is and while people keep their money there. Them she could tell her one reason while she keep her money in that particular bank is she own a small part of it. She could then show her share certificate as her proof of ownership. She could tell her that she had to save part of her income and not spend all of it in order to be able to invest in shares of the bank. This would naturally lead to having to explain why the habits of saving and investing are necessary.

·        Finally, in addition to teaching them about shares I think parents should strive to build up for their children a substantial investment portfolio ever before they complete their secondary school course. These will help in no small way to make them less financial dependent in later life.

According to Albert Einstein, the greatest mathematical physicist said, “The greatest mathematical discovery of all time is compound interest”.  When some one ask Baron de Rothschild, a member of the famous Jewish family of bankers, to name the seven wonders off the world, he said, “I cannot but I know that the eighth wonder of the world is compound interest.” Both of them were right. ‘The eighth wonder of the world is compound interest.” It can work wonder for a small investor who is prepare to wait and see her money grow. As the Japanese proverb says, money grows on the tree of patience.”

    My final word is based on a statement that I wish to borrow from Chris Ferrell’s Right on money: taking control of your finances, published by villard Books. Lets be clear in today world; the biggest mistake is not invest. The financial penalty for not participating in long terms savings plan is far bigger than the risk of picking a poorly performing stock or a bad managed mutual fund. The financial price for procrastinating is more than dollars, dividends and interest payments. You don’t get valuable real-world lesson about money management by delaying. “You have to know a little bit. And then you take the plunge. And then you learn as you go. “Says Paula Kennedy, a Leading financial planner… “If we know about everything there was to know about everything we were attempting to do, we would never do anything. So you have to take the plunge”.

    Certainly you don’t have to be rich to invest either in share or other business and make money. But you do need. To envision a secure financial future, draw up a saving and shares investment this plan on the basic of current information you have.

    According to a Chinese proverb, “The journey of thousand miles starts with the first step.” Friend, if you want to invest in share and make money, I want you to know that you have a one-thousand mile journey ahead of you. The earlier you start this journey the better you can go. The sense of urgency is well captured by the title of Wole Soyinka’s latest literature work, you must set forth at dawn. Why not take your first step today? Do not worry about having to start small; just start anyway and as keep going. Remember what Robert Schuller said about the apple and apple seeds. Starts sowing your seed.