Monday, 27 January 2014

Best Investment In Children

If you have kids, do you consider them as an asset or liability?

Before children can earn their own money, parent actually spend a lot of money on them for about 20 years. This is not a small financial burden especially when children pursue tertiary education. I guess most parent will agree.

So, are children a liability to parent?

Nevertheless, some parent treat this as a long term investment. They invest their money for 20 years and hope to get "dividend" monthly from their children when they retire. The more successful the children are, the more "dividend" they can get. So children are an asset to them.

But what if their children do not give them the "dividend" and do not even want to stay with them in the future? Isn't it a risky investment with non-guaranteed return?

I think most people do not think of all these things when they want to have children. Having children is a norm in life like birth - old - ill - death, or work - marry - baby - retire.

In these modern days, it is no more how many children do you want to have, it is how many children can you afford to have.

For most wage-earners, having an extra child can significantly delay their early retirement plan, unless one of the children earns big money at very young age and gives his/her parent handsome pocket money every month.

This is a true story. A professional couple can buy a new proton saga with cash every month with their salary. So I think their parent will surely have their 3 meals & special needs covered every day. Isn't it an example of successful investment in children?

The couple move into a new million dollar house. When being asked whether parent are staying with them, the answer is: I'll go crazy if staying with old fellow...

One old couple are in their late 70s now. They have 2 sons, both were sent to USA for tertiary education in their early 20s. Both are highly educated but do not want to come back, not even every year during new year reunion day.

The old couple invested for 20 years in their children, and get the reward in the form of money, but apparently lose their sons for 50 years. Is it a successful investment?

I'm sure that there are a lot of similar cases around us and I think it will get more common in the future. Perhaps you are one of the many that are involved in such situation.

Should we blame the children? Sometimes their talents are only appreciated by or applicable in other more developed countries. They have much better income & better living there. The children have no choice...

Should we blame the parent? As both parent are busy earning money for a living, the important early bond with their children are largely neglected. So the children tend to "forget" about their parent when they turn adult. But parent are forced to work hard to give their children a better living...

In term of financial planning, it is true that we should maximize our earning potential by earning as much as possible when we are young.

However, we should strike a balance between work and life, especially when we have a spouse or child.

I think children need their parent's accompany the most when they are below 12 years old. The younger they are, the more important the bond is to them.

Some people may say: I work very hard day & night for 10-15 years, then I'll be able to enter semi-retirement or retirement stage and will have plenty of time to be with my children.

However, when the time finally comes, their children will be in secondary school, or even have their own family where friends and work are more important to them.

At this stage, it is difficult to improve the bond between parent and children significantly. For those who have bad relationship with their children up to this stage, it is almost beyond repair.

Thus, parent should spend more quality time with their young children. If you think that you have no enough time, then cut down on your time on TV, online, hobby and even work if you can.

What is the best form of investment in children? Is it tuition class, piano class, swimming class, best school, insurance or educational fund?

I believe that parent will be able to reap more "reward" from time, rather than money invested in their children. If this fundamental bond with children is not established properly, it would probably be a regret for the rest of our lives.


  1. There is no enough in enough. When a person has more, he/she wants more. The person has to give before he can receive.

    It's really important to have a balance between family, health and wealth. They're equally important.

    I always feel blessed when I saw 3 generations of people doing something together. That's is priceless nowadays.

  2. Agree, people tend to compare with those who are better than them, so they always feel not enough. I have to admit that I were one of them before. However, I'm trying my best to change and I can feel that live is much more comfortable & easier after the change.

    Always value what we have, rather than unhappy with what we don't have :)

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