Recently, as I started to get involved in the financial industry, I had more opportunities to share with many people a simple and practical method: how to use a small amount of money to accumulate wealth through "regular fixed-amount investment."
Many parents said that their main purpose was to save money for their children, hoping to prepare for their children's future education or life stages.
In the early days, most people used traditional bank deposit methods, which are no longer able to meet such needs.
Therefore, it is an ideal way to create a more productive financial future for children through investment.
Limitations of Traditional Deposits
Bank deposits have always been a safe and stable way of managing finances, so the older generation loves to use them, but their interest rates are usually low.
Especially in the case of inflation, although the amount on the books remains unchanged, the actual purchasing power may decline year by year, so that there is a feeling that saving money cannot keep up with the speed of spending.
This is also why more and more parents are starting to look for other more efficient ways to accumulate wealth.
Advantages of investing in the stock market
"Regularly investing in the stock market" is a simple and long-term financial management strategy.
By investing a small amount of money on a regular basis every month, you can not only gradually accumulate assets, but also spread the risks brought by market fluctuations.
Since the investment is made in batches, there is no need to worry about buying at a high or low point. In the long run, the average cost will approach the middle value of the market, which is the "cost smoothing effect."
In addition, this investment method can also allow children to learn asset allocation and financial management thinking from an early age, laying a good foundation for the future.
Choice of valuable insurance policies
In addition to investing in the stock market, some parents may also consider purchasing insurance policies with cash value, such as savings insurance, life insurance or investment policies.
In addition to providing basic protection, this type of policy will accumulate a certain asset value over time, which is the so-called "policy value".
When the child becomes an adult, this money can be used as a first pot of gold for marriage, career planning or buying a house. It can also be used as proof of financial credit when applying for a loan from a bank.
How do I start investing small amounts regularly?
For beginners, it is not difficult to get started. You can follow the steps below:
Choose the right platform
You can start with a reputable securities company or fund platform and choose an account with the "regular fixed amount" function.
Set investment amount and frequency
According to your own financial situation, invest a fixed amount every month, for example, 1,000 yuan or 3,000 yuan per month, and stick to it.
Select suitable investment targets
Beginners are advised to choose lower-risk targets, such as index ETFs such as Taiwan 50 and S&P 500, or stock funds with stable dividends.
Regular review and adjustment
Review investment performance regularly every year. If necessary, adjust the target or increase the investment amount to plan for different stages of life.
Whether it is through regular investments in the stock market or purchasing insurance policies with cash value, parents' core goal is the same: to accumulate a solid financial foundation for their children.
This is not only the accumulation of assets, but also the starting point of financial education.
As long as you master the right method and make good use of every small amount of money, time will help you unleash the power of compound interest and create more possibilities for your children.
If you still don’t understand, you are welcome to come and talk to me. I believe that learning simple investment concepts will be of great help in the future!
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