Received lesser Hongbaos this year? Maximize it using these tips!

CNY 2021 is no doubt a more muted event this year. Now that the first few days are over and your kids have counted majority of the hongbaos, here’s some tips to maximise their hongbaos.

 

Teach your kids cash management.

Ultimately, it’s your kids’ finances. They should be part of the process of maximizing it. Take this chance to teach children about the importance of cash management and how they could allocate their money according to their needs and wants. One way would be to split up their money into several “buckets”; spending, savings, investments and filial piety. What better way to get them started on giving back to their parents!

 

Deposit them into a Savings Account

This used to be a no-brainer! Savings are important but with interests at the low rates savings account currently are, at 0.05% p.a., and global interest rates remaining low for the foreseeable future, there are much better ways to grow your kids’ wealth.

That said, emergency liquid funds are important for rainy days. So do allocate some portion into their savings accounts still.

 

Invest them into a Blue Chips Plan or ETFs

A very simple way of using dollar cost averaging (DCA) to “stack” your investments. Multiple banks offer the blue chip accumulation plan in their services and setting up a monthly automation is very straightforward. These banks also usually have investment arms which allow one to easily set up a CDP account and brokerage account for investments into ETFs or specific shares.

Wondering about the merits of DCA? That’s a topic altogether for another time.

 

Invest the money into Gold

With Gold increasing by 25% in 2020 and the rest of the precious metals classes enjoying similar if not more capital gains, it’s a good time to look into diversifying into other asset classes too. Many used to think that buying precious metals would be very traditional and outdated. Now, there’s much more convenient ways to buy into precious metals.

 

Buying via the retail route

Buying Precious Metal bullion has never been easier than now. Register account online and you can then scroll through the website and select what you want! All these in less than 5 minutes. You can even choose delivery to your doorsteps! Alternatively, head down to the retail shop to do your collection. Do remember to make appt here first and remember to practise social distancing!

A side note here, we know of one family who comes down after CNY every year and the kids literally bring along their hongbaos and swap them to silver bullion. If you are reading this, you know who you are 🙂

 

Daily accumulation system via mobile

Ever thought of diversifying your portfolio but was unable to due to cost or practicality constraints. (It is way too expensive to buy 1g gold, 1g silver and 1g platinum) Well now, that’s resolved with the use of your mobile phone.Set up an autosave plan for all three metal types from as low as $0.10 per day.  And it only takes 3 minutes on your mobile phone. Pause anytime with no penalties and physical redemption is as easy as selecting the physical item and checking it out! You now have the power to set up a diversified and customized portfolio at very low costs.

 

So that’s it, quick and simple tips on how to maximize your children’s hongbaos. After all, the real huat starts with not buying 4D but by making smarter day-to-day personal finance decisions for your future!

 

Jason