Advice: Dinah Wolf learned from her father about how to grow a nest egg
Setting a young family member on a sound financial footing can be an expensive business, but new research suggests one of the best ways may involve handing over no money at all.
Simply talking to young people about saving and investing can help embolden them to take the first step themselves.
The Association of Investment Companies (AIC) asked a panel of young investors what prompted them to get started in the first place. The most common trigger – for 39 per cent of those surveyed – was a discussion or recommendation from a family member.
Other motivators included a build-up of savings (36 per cent); low rates on savings accounts (24 per cent); and seeing something online that sparked their interest (24 per cent). Three quarters of young investors said they knew someone else who invests.
Annabel Brodie-Smith, communications director of the AIC, says: ‘Friends and family who invest have a key role to play in encouraging the under-40s to start investing.
‘Friends, family and financial advisers are also the main sources of information for younger investors. It’s encouraging that these investors are engaged and interested, with two-thirds holding individual stocks and shares.’ Wealth & Personal Finance spoke to three young people about what helped them to get started investing.
Dinah Wolf, 23, invested her £2,000 savings four years ago, after conversations with her father throughout her childhood piqued her interest.
Dinah, from London, said that even as a child she would often rather hear her father share tales about investing than listen to a bedtime story. That was because money feels like a taboo subject – which made it sound like a secret world she wanted to learn more about. Dinah prefers to invest in things she knows about and thinks show great potential.
So far, she has invested in a watch company and an investment platform through a crowdfunding company, Crowdcube.
She also plans to put some money in investment trusts to invest in a wider group of companies. ‘I am a believer in investing for the long-term and not get-rich-quick – nor putting money into something I do not understand, such as biotechnology,’ says Dinah.
Dinah, who writes a lifestyle blog on kneadyourdough.uk, adds: ‘One of the great lessons I have learned from my family is compounding – how drip feeding money over time can turn a small nest egg into a substantial investment pot.’
Kieran Ayre, from Shaftesbury in Dorset, is thinking about investing, thanks to the encouragement – but not the funds – of his parents.
Kieran, 18, was given a £250 Child Trust Fund by the Government when he was born. His parents invested it on his behalf and he now has £790. Kieran has been discussing with his mother, Maggie, how to grow his money further still. He is looking at investments that align with his own interests.
Kieran, who is hoping to study physics at the University of Bristol, is considering funds that invest in new types of energy.
‘My thought is that nuclear fusion will help as an energy in the future – so that fossil fuels will no longer have to be relied upon,’ he says.
‘Many think of atom bombs, which involved nuclear fission where atoms get split. But nuclear fusion is where atoms combine – and in the last year scientists have had some exciting breakthroughs.’
Investing in fusion is still quite challenging as it is a relatively new innovation for creating energy. But, Kieran is biding his time and is looking at environmental funds that also hold other energy stocks.
Kieran’s mum, Maggie, works for the charity Young Enterprise, which provides financial education support for schools – so knows the power of talking to young people about money.
Saira Pandhal, 11, used to spend her pocket money on things like chocolate. ‘But then my mum told me I could afford an iPad if I saved towards a goal, and that changed my thinking,’ she says.
Saira, who lives with her parents and two siblings in Rugby, Warwickshire, started saving through financial education app GoHenry three years ago. Every time she was rewarded with £5 for completing chores around the house, she added it to her pot until she had enough money for the iPad.
‘Now I want to move on to the next step and invest my savings,’ says Saira.
‘But rather than putting my money into stocks and shares funds run by others, I want to put it towards starting up my own business.’
Saira is a budding actress and has had roles in three films. ‘I want to start a business that helps other young people who want to act, with tips and support material posted out as a subscription service,’ she says. ‘My mum is a real entrepreneur and this has inspired me.’
This post first appeared on Dailymail.co.uk
