When your child becomes an adult at the age of 18, he will be eager to get into every aspect of life, be it education or experimenting with money. However, unless he is already earning through a hobby or his own startup, he is unlikely to have enough money to make large investments. Since the monthly allowance may not be enough for him to invest a large amount, he can start small. or, if he shows a keen interest in learning about various Investment Along the way, you can pique his curiosity by offering some financial help. Here’s how you can start your 18 year old’s investment journey.

1. Identify and explain the various Investment Start by Listing the Different Devices financial instruments Those available for investment are classified according to their risk and return potential. Remove the functionality and features of each option, whether it is the rate of return or interest, investment limit, tenure or lock-in period, penalty, and most importantly, the purpose for which the instrument is best suited. Give the child time to understand and absorb the information, and provide him with reading material or links to websites that explain the workings of each.

2. Investment Objective The next step is to understand why the teen wants to invest. Ask him if he has any long-term goals or dreams that have inspired his interest in investing, or if he’s just looking for the fastest way to make easy money to meet his growing expenses. It can also simply be an exercise in assessing your own investing skills or the performance of an instrument. Without understanding the reason he wants to invest, you won’t be able to guide him down the right path, or expose him to the risks involved. Plan,

3. Decide the amount and time If he doesn’t have a set goal and just wants to save so that he can have a bigger corpus in later years, he can start with small amount deposits or regular investments. If he has a specific goal, target price and time frame in mind, you will need to help him calculate the amount he needs to invest. More importantly, they have to check the feasibility of investing with their limited allowance.

4. Select Devices The next step is to choose the right device. This can be one or multiple options depending on the funds available to him. He can start with Recurring Deposit, Fixed Deposit or even Mutual Fund SIP. Also, explain why stocks and options like buying gold or insurance are inappropriate at his or her life stage. If he is too eager to invest cryptoYou have to uncover the huge risk involved and suggest a small amount that he is willing to write off.

5.Monitoring and Review Lastly, explain to the child the importance of monitoring and reviewing their investments. Be it bank deposits or mutual fund SIPs, he should check it every six months or a year to understand its growth and whether he needs to reconsider other options based on its performance. This practice would stand him in good stead in his later years.


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