1. Let children borrow money at home
One good way for Salmah and Hock to get their children to understand how basic investments work would be to get them to borrow money from their parents for the things that they want.
Instead of asking their children what they want and buying it for them, Salmah and Hock could lend their children some money to buy these things. Then, they can give their children a deadline by which that money should be returned to them — and encourage their children to save money to meet that deadline.
To top it off, some household chores can be thrown in as a form of interest! For instance, if Salmah’s daughter Nurul wants to buy a Lego set worth RM100, Salmah can lend her that sum of money and request that Nurul pays it back within 2 years. As an interest charge, Nurul will be required to do the dishes after dinner twice a week for those 2 years.
Salmah and Hock should remind their children to keep this practice of borrowing within their families or only at home, though, so that their kids don’t end up borrowing money recklessly with dangerous consequences outside!
2. Teach them about crowdfunding through sharingIf Salmah or Hock’s kids want something which they can actually share with their siblings or with all members of their households, Salmah and Hock could use this opportunity to teach their children about crowdfunding.
For instance, let’s say Hock’s daughter - Hana - would like a PlayStation 5. Saving up more than RM2000 for this console might be a heavy task for one child to do, so it could be a good idea for Hock to get Hana to ask her other siblings for help.
If Hana and her two brothers save RM800 each over the next year, they can combine their savings to purchase the PS5 in question, and David would return the favour — or “payback” his investors — by sharing the PS5 with his siblings.
This is essentially crowdfunding investment in practice, after all: getting investors to pool money together for a business idea or product, and giving them returns once the product is created or the idea materialises successfully!
3. Give children plants to look afterTaking care of plants and taking care of investments are very much alike if you think about it. This is particularly the case with plants that bear fruits or flowers. If you would like your plant to produce fruits or flowers, you would have to give it a suitable amount of attention and care.
By giving their children the responsibility of looking after some plants, Salmah and Hock would be able to teach their children about giving their investments a healthy amount of attention regularly. Their children could also learn about the right time to harvest the profits from their investments — or conversely when to cut off rotten fruits or unhealthy sections that could damage the rest of their investments.
Additionally, Salmah and Hock could throw in a lesson or two about diversifying investments by asking their children to choose a selection of plants with different fruits or flowers to look after, instead of placing all their eggs in one basket by having just one plant!
When we talk about investment-related games, quite a few names come to mind - like the celebrated board game Monopoly and its local Malaysian counterpart, Saidina. There’s also a portable card game version of Monopoly, called Monopoly Deal, which can be found almost anywhere today.
4. Play investment games with children
This tells us that Salmah and Hock are spoilt for choice when it comes to investment and trading games that they can literally play with their children. If they do opt to go with Monopoly or Saidina, they’ll be focusing specifically on investing in property, with the chance to introduce their children to important concepts like ‘rent’ and ‘mortgage’.
If their children are already familiar with games like Monopoly, Salmah and Hock could treat their kids to slightly more complex games, such as Chinatown, in which players have to build their own businesses and see them grow.
There’s nothing like practical, hands-on education — which is why Salmah and Hock should consider starting an actual small business with their children, like a small shop selling kuih-muih or drinks in the taman that they live in!
5. Start a business with children
From developing business ideas to sourcing for materials and financing this small business, Salmah and Hock could have their children tag along throughout the entire journey, learning first-hand lessons about creating a business and making profitable investments.
Their children would feel even more inclined to be responsible for the business if the idea comes directly from them, and children can sometimes have very creative ideas indeed! By doing this, Salmah and Hock might just end up sowing entrepreneurial seeds in their children, which would, in turn, make them highly resourceful and adaptable in future.
It’s never too early to start.
Do you find yourself relating to Salmah and Hock? If so, you’re probably a parent who is thinking about teaching your children the basics of finance and investing. This is definitely a good idea because these are all useful lessons that they will go on to use every day.
The key here? Don’t be afraid. Investing money and handling finances can be overwhelming and daunting affairs, but you should feel free to be creative with how you teach your children about these matters!
Remember to throw some fun into the mix too, and don’t dwell on the mistakes your children make — because falling and getting up again is part of the process.