Happy Chinese New Year 2019!
Year of the Pig 2019 means prosperity and ever lasting wealth. I would like to warmly greet all my Chinese readers a wonderful year ahead. Besides the amazing food, gathering and fireworks festive; my favourite part of Chinese New Year is the ‘Hong Bao’ or red packets my parents and relatives give away generously.
The ‘Hong Bao’ is basically a red envelope filled with red hot cash! The more relatives and friends you visit over the next two weeks, the more you will collect.
Always remember how I would recklessly spend my ‘Hong Bao’ money over silly things like video games, toys and NBA trading cards!
Lack of financial Maths
If I could turn back time, I would have slapped myself for spending all the monies on these worthless items which do not appreciate in value. No difference from tossing all these monies into the river. DO YOU KNOW………..
$1,000 collected per year on average.
Invested in stocks and shares every year with the same amount.
13.2% growth for next 12 years
$30,000 in 12 years!!!
13.2%??? DON'T BE A FOOL!
I am being serious. This is not a scam. Just hard cold facts! See the data below of the top global companies performance in the last 12 years. I am sure you know at least 6 out of 7 of the presented companies. IF NOT I WILL GIVE YOU A MOOMOOCOO T-SHIRT!
Diversification of these 7 companies gives you a 15.3% yearly yield for the last 12 years!
Yes, every stocks and shares portfolio need a good diversification. Above 7 companies with equal weight in the last 12 years data would provide a 15.3% yearly yield alone. So this clearly shows 13.2% yearly yield growth is not a MYTH!
Its easier said than done! Looking back at the data makes it so appealing, but not at all easy. Its difficult enough to try to forecast good comapnies for tne next 12 years alone. However buying excellent companies with strong business is not rocket science. Everyone have a different prespective, opinions and ideas. We can at least assure this is better than SPENDING THE MONEY or Storing them in low interest yeild savings accounts!
Always go for higher risk with kid's Portfolio.
Investing in your kid or child’s portfolio is actually easier than your own pension or personal investment portfolio. Simply because they have the luxury of time! An Early Investment portfolio the larger the compounding interest effects rolls on over the years. Financial crisis is not a major issued because your kids would have more than 2, 3 or 4 decades to ride it out.
Never misunderstand ‘High Risk’. Higher risk means going for excellent companies for potentially higher returns. This does not mean penny shares, start-up oil companies, next crypto phenom or next cannabis stock. Let’s keep it simple!
Think of companies which would still be striving when your kids turn 18, 24 and 30.
Or companies which would still be in business when you become a grandparent.
Needs and Wants of a child
A child does not need a new phone, tablet, games or LOL toy console every single year.
For me the most important part of growing up are the memories my parents spend with me every single Chinese New Year. A child needs their parents presence and love to build their everlasting memory of their childhood.
Let’s be responsible parents by investing these ‘Hong Bao’ monies and also teaching them the value of savings and investing. It could be more valuable for them at a later stage in life.
Have a Wonderful Chinese New Year 2019!
Thanks for reading! Please share this with other parents to help raise awareness of wealth building which are not taught in schools education system. Please leave a comment or discussion topic too.