Why Children Should Learn About Stocks And Property Investment

Singapore might have one of the best education systems in the world and over 40% of our labour force has a university degree or higher. However, how many of us can say that we're financially literate? It is important to know how to manage your budget, track your spending, save for future needs, understand financial concepts like compound interest, and weigh the risks of financial products such as loans or investments. 

If these are difficult for adults to grasp, how will children be able to figure it out? It doesn't help that we're dealing with less physical cash now so it's even harder to understand the value of money. It is also trickier for children to know who to trust when it comes to financial advice, with many "finfluencers" online purporting to impart the best insights. 

One Singaporean woman is doing her best to educate our population on important financial concepts – and she believes financial literacy should be instilled at a young age. This starts by teaching them how to handle money, both physical and digital. However, this is only a small component of financial literacy, says Germaine Chow, founder of I Quadrant. 

What financial literacy means

“It is really about understanding value exchange – which is what money really represents – and how this value exchange takes place in the world or in one’s environment,” she explains.

“In kids, learning financial literacy is not just understanding digital or physical transactions but it encompasses broader aspects such as money management skills, delayed gratification, financial responsibility, the value of money to effort and the value of hard work.”

The 34-year-old adds that many people grow up thinking that financial literacy is just about handling money, not understanding how this value exchange influences how they look at their career, how they exchange time with money, how they invest and grow their wealth and how all these affect their daily life. And this results in children growing up into adults who go through life only to realise in their 30s and 40s that they have not been making sound financial decisions.

Closing the financial knowledge gap

Germaine reckons the education system is one way to start children off on learning money skills. For example, schools teach children to manage money during recess and to spend within their means. When they go to secondary school, they can take accounting as a subject, then economics in junior college. But she believes there is so much more we can do to prepare our young adults. 

“After graduation, these young adults have no clue how to own their first property, how to calculate the total debt servicing ratio, what investment vehicles are available in the market, and what returns are the ‘norm,” she elaborates. “Bringing awareness to our youths can lead to them having a perspective of not just saving money but starting early in their investments.”

This includes knowing what fixed deposit returns are, what the inflation rate is and how to calculate return on investment as this will give them a kick-start to their investing journey, she says. 

“That knowledge gap exists and is difficult to close up because most adults do not even understand how things work in real-world markets,” says Germaine. “I would love to teach children about all different types of assets and markets. I was only exposed to stocks in my 20s, which seemed so foreign to me at the time.”

The mum of two kids aged eight and 10 believes children should learn about different investment asset classes when young. They include stocks, property and funds benchmarked against the S&P 500 (a stock market index tracking the performance of 500 of the largest companies on stock exchanges in the United States). They should also be able to understand how to calculate the return on investment as well as all the commonly-talked-about financial terms. 

“It will be helpful for them when they grow up – they will know how to discern between fake investments where they promise you overly skyrocketed returns that are impossible. As adults, we will purchase our first homes one day. So, learning these earlier will help them to make better and more informed decisions,” adds the former model and stewardess.

Learning from her losses

Germaine isn't just full of ideas, she walks the talk too. Spurred on to help others after her personal financial misfortunes, she started I Quadrant, a community-driven platform that educates Singaporeans to make fruitful, tangible investments. She and her husband lost $24,000 – all of their savings at that time – to a fraudulent investment scheme. She also unwittingly exchanged shares of her digital marketing company for a mere pittance, and then witnessed the company crumble under the new owners. These two experiences made her determined to not just empower novice and guileless investors to build wealth, but protect it too.

Her efforts have been acknowledged and celebrated, as she was one of only 17 winners of Singapore’s Women Entrepreneur Awards in 2023.

Germaine says her company closes up the knowledge gap of financial literacy, especially in the real estate segment. Monthly market insight sessions are held, to analyse the news, research and see where the market is moving towards. There are also group coaching sessions and one-to-one portfolio analysis sessions with their community members.

“We believe that one right property move can change a family’s life trajectory,” the entrepreneur shares.

What parents can teach the kids

 “Children often mimic us and our actions. So, the best way for parents to impart financial knowledge is to lead by example, show that we have this financial knowledge, and are able to journey with them and talk about subjects that their school doesn't teach,” says the entrepreneur.

Germaine tells us that her children own Disney stock, “simply because it's easy for them to visualise and understand”. 

“I asked them, ‘Do you think Mickey Mouse and Disneyland will be around 20 years from today?’. They said yes. It's a matter of opening up their perspective and knowing what is a stock,” she explains. 

She also played Monopoly with them from their younger days so they know what "landlords" are and that they can collect rent if they invest in a property. 

Beyond being exposed to different investment vehicles, Germaine's children have also learned to set aside money for their wants, and be generous to people around them. 

“My proud moment was when my daughter gave ang pow to everyone she knows, including to us, her grandparents, her aunt and her cousins,” she reveals. 

She is keen on spreading a positive message to children through her business too. The company is currently coming up with a youth program for children to learn more about financial literacy. But she insists that, more beneficial than any program is for parents to set the best examples for children by their actions. 

“Just by being an investor themselves, many of our members’ kids do see their parents as role models and know that they too need to learn how to invest and have a commitment to learning for life,” she adds.

Germaine reveals that while she hasn't shared her experience of getting scammed with her children, she has told them about her business failure. She used this opportunity to teach them a lesson too, telling them that, “Failure is just an event and not the person (mummy). It is okay to fail again and again... just try again”. 

“I don't want to give them an expectation of a perfect person, that everything has to work out and that I have never failed,” she adds. “They were shocked but that, to me, is the whole point of having conversations with children. It is so that they can take away something good from that experience.”

Can money buy happiness?

“I want my children to learn to grow their money but not be blinded by money. Money is important to enjoy life but it's not everything,” she says. 

With her fair share of financial ups and downs over the years, does she think that money can buy happiness? She agrees that money can buy many comforts and privileges in life, and these can bring about happiness to some extent. However, she admits that, even if you have money to buy a nice home, you can't buy the people in it.

“Having no one to celebrate one’s life is the definition of what true poverty looks like,” she says. “So, to me, money is important but more important than having money is the wealth of relationships, having people to celebrate, inspire, encourage you and enjoy these comforts together.”