We all know the importance of teachers in shaping our career and life. Teachers play a significant role in shaping the future of students, not just academically but also in imparting valuable life lessons.

When it comes to investment, teachers can help the young generation learn about the dangers of investment schemes promising unrealistic returns. They can also teach about patience and discipline which are two important things early investors must know.

Here are some important lessons teachers can give on Teacher’s Day 2023.

Start Investment Early

Teach youngsters the power of compounding. Encourage them to start saving and investing as early as possible. The earlier they begin, the more time their investments will get to grow.

Adhil Shetty, CEO, Bankbazaar.com, says, “Compounding is the best ally. By investing early, even modest amounts can grow significantly over time, allowing early investors to accumulate substantial wealth for their future needs. Additionally, early investments help in achieving long-term financial goals, such as buying a home, funding higher education, or retiring comfortably. With a longer investment horizon, anyone can take calculated risks and potentially earn higher returns.”

Also Read: Home Loan Refinance: Best time to refinance your housing loan for a lower interest rate

Teach Budgeting

This is one of the important lessons for youngsters who tend to spend on things beyond their budget. Instill good budgeting habits. Show them how to create and stick to a budget, which will free up money for investing.

“It cultivates financial discipline and responsibility. Youngsters must understand the importance of budgeting and setting financial goals, which are crucial life skills,” adds Shetty.

Set Financial Goals

Help students identify their financial goals, whether it’s buying a house, funding their education, or retiring comfortably. Setting clear goals is the first step towards building a successful investment strategy.

Emergency Fund

Stress the importance of building an emergency fund. This fund acts as a financial safety net for unexpected expenses, reducing the need to dip into long-term investments during emergencies. It provides a safety net against unforeseen emergencies. Building an emergency fund through savings ensures financial stability and reduces the need to resort to debt during tough times.

Diversify Investments

Explain the concept of diversification. Encourage students to spread their investments across different asset classes like stocks, bonds, and real estate. Diversification helps manage risk.

Long-Term Perspective

Emphasise the benefits of a long-term investment horizon. Encourage students to avoid making impulsive investment decisions based on short-term market fluctuations.

Regular Tracking

Early investors must review their investments periodically and make necessary adjustments. Teachers can explain how staying informed about their savings and investment accounts can facilitate better decision making.

Tax Planning

Without tax planning, any investment may not earn expected returns. Introduce the basics of tax planning. Explain how certain investments, like tax-saving mutual funds or Public Provident Fund (PPF), can help in reducing tax liability.

Avoid Debt Trap

Educate students about responsible borrowing and the dangers of excessive debt. High-interest debt can erode their financial stability and hinder their ability to invest.

Ethical Investment

This is very important lesson for anyone. Investment should be ethically done to ensure safety and respect in the society. Discuss the concept of ethical or socially responsible investing. Explain how individuals can align their investments with their values and beliefs.

These investment lessons can prepare early investors with essential financial knowledge that will serve them well throughout their lives, helping them make responsible financial decisions.