For those of you who are raising kids, I don’t know how you feel about it, but I wanted to share my personal insight. For me, the responsibility felt overwhelming at times (ok, I lie. It felt overwhelming almost all the time). Before my first child was born, I went looking for a better paying job even though I loved the job I had. Then when he was born, I was filled with anxiety, worrying about the best way to raise him and about his future, if I’m doing what I need to, to ensure that he can be happy, carefree and be able to enjoy his life. These thoughts invariably turned to financial matters – how do I ensure he will be looked after financially if I lost my job, fell sick or died? I always thought I had plenty of time to sort all these things out; but life and work always got in the way. I did none of the things I should have done even though I had the resources to do them. Instead I relied on good fortune and got lucky – which, admittedly, is not a very responsible way of looking after my children.
Back to the present, my brother has his first child, a 1-year old daughter. Over the weekend, I spent the day with him talking about parenthood, children, the mistakes I made in parenting, being a responsible parent – and most importantly, the importance of not procrastinating important decisions and actions. Yes, we discussed what I knew I should have done but didn’t do, this seemed especially important now, given all that is happening around us.
First, I told him he needed to get life insurance for himself to make sure that if anything were to happen to him before his daughter turned 25, she would be financially secure. Nex, I asked him to get a will done so that his finances go to the right person and the right people will be responsible for looking after his daughter if anything should happen to him. That was all pretty straight forward.
Second, we discussed how to start investing in her future. Now, my brother is pretty intelligent (he would say that he is more intelligent than I am – which I would respectfully but strongly disagree with him) but even he would admit that his level of financial knowledge is not where they should be. That got me thinking that there must be so many of us out there in the same boat – parents who want to save for their children’s future but don’t have the confidence and knowledge to invest in stocks and shares (luckily we have EPF, PNB and Tabung Haji).
So here are my two cents on gold and how it helps those of us who aren’t sufficiently informed or well plugged investors. Gold is a simple investment product but yet, very powerful.
If I had set aside a sum of money in gold savings for my first son back in 1998 when he was born, I would now have 7.5x more today. In contrast, if I had invested the same amount in the KLCI, I would only have made 4.0x more money. What’s even more amazing is that if I had invested RM100 every month in gold from the day he was born until today, that amount of gold would now be worth more than RM95,000. However, if I had put the same in the KLCI, that would now only be worth RM38,000. (And before you ask, RM100 invested every month since my son’s birth to the end of July this year is about RM26,000 of savings).
No one can tell you with any certainty how investments will perform in the future. We only have the past to give us some kind of guidance. So based on this, I told my brother to start putting some money aside every month in gold for my niece’s education/wedding/life needs. It is simple to do and history shows that saving for the long term in gold has been incredibly rewarding.
To sum it up, children are expensive, so it’ll help to save a little bit of gold every month starting from today, to avoid the anxiety trips later.