The knowledge of financial topics and investments are underserved in
our communities, especially for young people. It is important for young adults
to understand fiscal management when they are young and about to move on from
both high school and college.
Micro-investments made by the younger generation potentially have a large positive
monetary impact over time due to compounding and good financial rigor. Whether
the investment is $5 or $500, the learning is the same.
READ MORE: Helping teens develop financial literacy
Wealthsimple, a Canadian boutique
online investment firm focused on millennials, offers an “InvestingMaster Class” course that is tailored to provide a video-based learning
opportunity for young adults. The videos are free to view and the course is narrated by Nicholas Braun, who presents
the content in a light and witty approach that works well with young people. Braun
is an actor with many roles in both movies and television.
The course’s topics include:
1.
The Stock Market
2.
Investing 101
3.
Saving vs. Investing
4.
The Five Simple Rules of Investing
5.
The Waterfall Method
6.
Automating Your Finances
7.
Should I Pay Someone to Help Me? (Wealthsimple
services)
8.
Socially Responsible Investing (Wealthsimple
services)
9.
When It’s Actually Okay to Pick Stocks (Wealthsimple
services)
10.
How Much Do I need to Retire?
Sessions 3, 4 and 5 have the most impact and value.
Session 3, Saving vs. Investing, covers the basics of saving money and
how each person can reap the future benefits of small or micro-investing by
starting now. It focuses on financial timelines and how near-term requirements
should certainly be housed in savings accounts. But to meet longer term financial
goals, money needs to be invested to provide higher returns.
Session 4 describes the following rules/topics: Leverage Compound Interest, Don’t Pick Stocks, Keep Costs Low, Diversify and Tune Out the Noise. These supply solid advice for the new
investor who is looking to create wealth over time. Young adults can take control of their
financial futures by following the suggested rules, setting up a micro-investing strategy and sticking to it.
Session 5 discusses the basics of financial priorities and managing money
such as high interest debts/credit cards, savings and emergency funds,
employer matching, taxes, low interest debts, and financial goal setting. This session builds on the previous ones and
wraps up the learning sessions for the Master Class. Although young adults may not be interested in taxes and its implications at this stage, the video
presents valuable concepts to build on.
The remaining sessions focus on information about the Wealthsimple financial
services.
Most online brokerages offer no commission custodial accounts (for
minors) or joint accounts that could be setup for young adults to get started
on investing and research. Parents can setup accounts and work with their kids by
discussing investment options and approaches to keep their investments on
track. Given the long-term horizons of
young adults, even micro-investments made today can provide significant gains and more financial freedom and independence as they get older.
Paul Goldstein is the father to two kids. He
introduced the Wealthsimple video-based course to his own kids. He uses the financial
concepts introduced as a base of discussion about money and investments.