Happy Children's Day

Enjoy ! Happy Children's Day !

We at twistntales enjoy our Children's day .. and like every year are happy to offer you a 10% off on all kids books for the day ! What better gifts can we give our children !

No, there is something better ... one more article from Shyam, very apt for Children's Day, posted below :


"When my client told me about how she struggles to find the right words to use as she gives her children financial gifts. Many of you have done well in life and wish to pass part of that on to your children.

Most people struggle with a shirt or a pant going up to a diamond set, a car or even better a house. That is not the point – what you give should be financially a great investment over a long period of time. Long after the wrappers have been thrown out, and the puppy has grown up is there a gift that will stay with them?

Yes, give them financial freedom!

To me, the key is to teach them that instant gratification is good, but teaching them that money should be got (earned is best), spent (some instant gratification) and saved / invested for the future.

If your child or grandchild is about to have a birthday, break the gift into various parts. Let him / her decide what to do with the 3 parts. Let one portion be for instant gratification (mobile, ipod, VCD, jeans) put away a portion for buying something he / she needs in say 5 years time (education?) and one portion that he / she will use when they are say 50 years of age.

This will teach them that instant gratification is great but if you look around the attic, it is not very inspiring. It will also teach them about “value” and help them take a decision on the basis of value rather than impulse.

Let us say you wish to gift Rs. 500,000 to your grand daughter who is all of 12 years of age. Fairly obvious that she will not be able to appreciate what this article says (my interaction actually shows that children deal with money far, far better than so called adults). However she will understand that our politicians have made it almost mandatory for kids from middle class families also to study abroad. She will understand that her father will have a conflict of interest when allocating money for her education and for his retirement.

An investment, requires patience, the ability to delay gratification, and a little bit of know-how. As a grandparent, you can help set lifelong patterns of financial responsibility by showing your grandchildren how to invest their money wisely.
Now sit with your grand daughter and teach her why she should delay gratification. Tell her how her money will grow in a mutual fund. How she should buy a MP3 player for Rs. 6000, and put the balance in a mutual fund. Teach her that she could be a lender to a company by buying debentures or a part owner by buying equity shares. Even better she could get excellent fund managers work for her by paying them a fee.

Introduce her to the big great world of finance and investments.




How when at 21 years she pays her college fees from the fund, her eyes will be moist. How at 32 when her husband is buying a house this fund will help bridge the gap. How when at 40 she decides to start a new business, this fund will give her the confidence to do something on her own.

Even Rs.1, 000 can buy a well-rounded mutual fund like Hdfc Equity fund. If you had invested in an SIP of Rs.1, 000 in Franklin India Bluechip since 1997, you would have invested Rs.128, 000 today. And that would have been worth Rs. 1,030,330.

Giving an annualized retun of 36%. Ok, ok your financial planner is telling you that past performance is not a guarantee of future performance.

Is he guaranteeing that it will not give 40% over the next 20 years? NO. The past is only a proxy for what can happen in the future. But surely you can afford a 5k SIP for your grand daughter? What about 10K? I surely do not know how much return to expect but a 15% return over the next 30 years CANNOT be a small amount. Do you agree?

What will it do? It will pay for her education, home down payment, marriage, her business and perhaps if she did not use it for any of these, her retirement.

You could perhaps help older children with more advanced concepts like Index funds, like saying it is better to receive interest rather than pay interest. On why they can save for an asset rather than pay an EMI. Or how a loan for a smaller time frame is cheaper than a loan for a longer time frame.

Help your children to see how much fun it is to watch an investment grow. Celebrate milestones--like when that investment doubles or reaches the target goal for something special. Drop in a small amount every time there is a celebration. When she gets a Rs. 25000 gift from her uncle tell her how she can invest a portion of that in the same mutual fund!

Finance is changing and changing dramatically. For sheer survival you need to learn and adapt. If you spent time with your child or grand child teaching her finance the satisfaction is two fold.

She will think of you whenever she looks at her degree, house, car or retirement plan. Less selfishly you would have spent time with her, and taught her things which corporate India believes the kids who join them know. At least your kid out of the 18443 people they recruit will know. Amen."

Enjoy Children's Day and prepare them to face the future ... when u may not be around to hold hands.