Gifting your loved ones with traditional gifts this festive season is great, but have you ever thought of gifting investment funds, shares, or even a Unit Trust as an investment for the future and a gift that has the ability to keep on giving? This can be an even more thoughtful way to secure your children’s and loved one’s financial future. This is a gift that can help kick-start their financial and money management journey and help instil sound financial decisions that will help them in the future.
Akweley Laryea, Head of Retail Banking at First National Bank, says: “While traditional gifts may provide immediate joy and satisfaction, gifting a loved one invested or saved funds offers a long-lasting and potentially rewarding opportunity, where this gift is an asset that can grow over time.
Akweley unpacks the benefits of gifting your loved one their first start in investing:
Financial education: Gifting shares and investments provide an excellent opportunity for financial education. It allows recipients to learn about investing, stock markets and the importance of long-term financial planning. By owning shares, they become a stakeholder in a company which can foster a sense of financial responsibility and understanding of their investment.
Wealth accumulation: We all know the saying “Rome was not built in a day”, and the same goes for wealth creation. It takes time and consistency, which is a valuable lesson that can be learned by investing. Shares and investments have the potential to appreciate over time, leading to wealth accumulation.
Ownership and decision-making: Owning an investment instils a level of decision making. Like what to do with my returns, do I spend or reinvest? How long do I stay invested in one entity? etc. This helps you make informed decisions and understand the consequences of your actions.
Compound growth: One of the key advantages of gifting an investment fund is the power of compound growth. Over the long term, reinvested dividends or interest and the appreciation of stock prices for shares can result in significant returns. Starting an investment portfolio early in life can harness the full potential of compound growth, providing a financial cushion for the future.
Flexible and transferable: Investments are a flexible and transferable asset. They can be easily gifted or passed down to future generations. This flexibility allows for strategic financial planning, ensuring that the investment aligns with the recipient’s financial goals and objectives or the option to pass down to their loved ones at some point if they choose to gift others.
Promoting financial responsibility: Gifting investments encourages financial responsibility and a long-term perspective on money management. Recipients learn the value of patience, strategic decision-making, and the importance of maintaining a diversified investment portfolio. “Gifting saved funds or any investment is meaningful and provides a forward-thinking view of investing in the financial well-being of your children or loved ones. By combining the benefits of financial education, wealth accumulation and ownership, gifting shares sets the stage for a brighter and more secure financial future,” concludes Akweley.
Akweley Laryea is Head of Retail Banking at First National Bank
