I believe my kids will become better investors then we will be. I am beginning to see that. My 20-year-old son is a better investor than I am. There is likely a few reasons why this might be so.
He Has Less Money
I’m sure this comes from the fact that he has only four years of TFSA room to invest. I held back nine years of cash and had to throw in a large amount into equities last year. It was a high market but since this was funds for a very long term, I had no problem with doing that.
Many bloggers had a small amount of money during the 2008 financial crisis. They didn’t have that much money to worry about. It will be interesting how they will react when their much larger pile drops 30-50%. Some could watch 7 figures vanish on their balance sheets.
My children can learn a lot from this generation before them. The Internet has allowed us to learn from one another.
They Have The Proper Vehicles
My children also benefit from investment vehicles since Vanguard has come to Canada. In fact I opened my son’s TFSA account in December 2017 and VGRO came onboard in January 2018. This was perfect timing and had nothing to do with me.
I knew about Vanguard index funds when I was 25 years old. But there was no way for us to invest with these in Canada. Or so I thought. I guess I could have just bought VTI. But I was not aware that I could.
Having Vanguard in Canada now has made everything easier. There’s no denying that.
If these products were available when I was 25 years old, I would have invested in these right off the bat. And I would have never looked back.
They Have Seen Our Mistakes
My children has heard me recount that I could have just bought an index fund and have been done with it. They are going to learn from my mistakes. We haven’t done poorly by any stretch but we could’ve done it easier. And I love easy.
I want my children to have an easier time with investing. With all the financial literacy and education that I am providing for them, it should prove that way.
I feel strongly that my children can use equities to build growth. But they need to figure out what to use for building an income floor. I would prefer they not just rely on the equities market for their retirement.
My children are at the age where they need to find something that will allow them to contribute to the world. Whether that is with a profession or a business, that will be their choice.
But the plans for retirement start now. It starts when they begin their TFSA accounts. I will give them advice for consumption and advise them not to limit their options.
Both of my children have already started thinking along these lines. If they make mistakes, they will make the mistakes with their eyes wide open.
Unlike the rest of us who made mistakes without thinking. Many of us did not even realize there was another option. That is not the case nowadays as these young people realize there are plenty of options out there.
With the advent of the internet, everyone is able to see what many others are doing. And I think that has been proven to be very healthy.