Taking the plunge
When you think your child is ready, open a brokerage account for him and allow him to invest in stocks.
Encourage him to keep track of his investments and reshuffle his portfolio accordingly. This will help him get "a real-life understanding of economics, sectoral performances, businesses and also sharpen his instinct for gathering knowledge," says Pachisia.
Adds Vaibhav, "My father explained that inflation will bring down the purchasing power of my savings, unless returns from my investments are higher than the inflation rate. Then he explained how this can happen in equity investment, but with some risk of loss in the short term."
Image: Amitabh Bachchan (C) poses along with children during the launch of Zapak Kids and Bhoothnath movie gaming merchandise in Mumbai | Photograph: Sajjad Hussain/AFP/Getty Images
Also read:
Warren Buffett's 6 smart tips on investing
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