Breaking Down Legal Jargon: How AI Legalese Decoder Can Simplify Investing for French Teens
- May 24, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Seeking Advice on Teaching Teens Investment in France
I am seeking advice and thoughts on financial matters as we reside in France and are tax residents here. My family consists of myself at 53 years old and four teenagers aged 19, two at 18, and one at 15.
To instill a sense of financial responsibility, I have decided to provide each of my teenagers with €30 per month to invest. I prefer that they invest in options other than a Livret A account, which typically yields only 3%. If needed, I am willing to contribute some additional capital as well. While the amount may seem modest, I believe it is sufficient to cultivate their interest in financial matters and instill good habits for the future.
To monitor their progress, I plan to hold semi-annual meetings where we compare investment performances and discuss financial goals and strategies.
Using the AI Legalese Decoder can assist in simplifying the legal jargon often associated with investment products and strategies. This tool can help clarify concepts related to taxes, fees, and investment options, making it easier for both myself and my teenagers to make informed decisions.
### List of Key Topics to Cover:
– **Investing Ethics:** Discuss the importance of sustainability, environmental impact, profitability, and other ethical considerations in investment choices.
– **Cost of Living:** Emphasize the need for investments to outperform the cost of living expenses whenever possible.
– **Fees:** Educate them on the various fees associated with different investment products.
– **Taxes:** Explain the tax implications of investment choices, such as dividends and capital gains.
– **Investment Preferences:** Explore options like ETFs and SCPIs, and encourage them to consider other alternatives.
– **Time Horizon:** Emphasize the importance of long-term investment strategies, with a minimum time frame of 5 years.
– **Risk Appetite:** Assess their willingness to take on risk and diversify investments accordingly.
– **Vocabulary:** Introduce key terms such as inflation rate, savings accounts, ETFs, stocks, dividends, compound interest, and others to enhance their financial literacy.
I welcome any feedback or additional suggestions on how to best educate my teenagers about investing. Thank you.
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****** just grabbed a
I have very young kids, just started the concept of pocket money, and live in France. I don’t think I will be teaching any of my teenagers any of these things in so much depth. I agree with diversification and compound interest. I will concentrate on the difference between good debt and bad debt. Saving with milestones and targets. And number one is budgeting and spending/account tracking. It’s the last one keeping young people poor, not their knowledge of different ETF funds.
Phillip.
On a lighthearted note, your exercise sounds like why JL Collins ended up writing his best-seller “The Simple Path to Wealth”. Because as it turned out, the teenager in that case (Collins’s daughter) actually wasn’t the slightest bit interested to hear about finance, and so Collins ended up putting his lessons down in text instead.
Maybe your children are more receptive, and I’m certainly not telling you to not try this. However, my experience is that you can go a long way as a parent without holding biannual finance seminars like this.
I think the most important thing you can do is (A) take charge of your own finances and (B) talk openly to your children (at an appropriate level of detail) about the family’s financial matters such as spending, saving, etc.
Then you simply lead by example, because your children are like little sponges that will absorb whatever you do yourself. And already from childhood they’re steered away from that extremely harmful mindset that personal finance is scary and something to be avoided.
The former, open approach to money is basically what my own parents did. I NEVER received a single explicit lecture about finance. Yet, just by living in a household like this, I left home with many core lessons:
* Be thoughtful about spending, live below your means, and invest the rest.
* There’s good debt (mortgages etc.) and bad debt (credit card debt, pay-day loans, etc.).
* In using your financial assets, prioritize gaining time for yourself and your family (e.g., working less, taking vacations) instead of material spending.
* Investing is something done on a multi-decadal timeframe.
* A long-term investing habit can, over decades, result in significant supplementary income and ability to work less.
Sometime in my forties I realized my long-term financial planning had turned into something that’s little different from what my parents always did. I didn’t do this consciously at all — it’s just that an apple doesn’t fall far from the tree.
Giving them 30 / month when they don’t know what to do with them is an… interesting way of teaching.
Anyway, you local bank might be one which is interested in educating youth in finance, economics and investing. There’s a EU framework or something, because my local one did that last year, and prior to that – in a form of remote lectures and providing digital ‘printed’ material.
If not i would really suggest investing into a coherent book (proper education one with terms explained, and homework assignments on finance math). And from there adjacently teach about actually available instruments, their costs, taxation and stuff.
I would put extra attention to compound interest and index funds. Also avoid making it too much of a game where they try to beat each other, then it’s too tempting to take high risks and turn it into a gambling game.
That’s good, just the first point I’d say, the first thing you learn in the markets is to put your ego aside. The market doesn’t take your tastes into account, and that’s a mistake a lot of people make. After that, what you want to learn is fine, but unless you just want to learn how to invest in well-known indexes (s&p500, dax, cac40), it’ll never be enough to understand the markets. It’s one of the most complicated things, and for that you need to read books on the subject. I can recommend 3 books. How to Make Money in Stocks Complete Investing System-by William J. O’Neil (explains everything about the market), The Lords of Easy Money – Cristopher Leonard (explained the policies of the FED and how it affects the market), The changing world order – Ray Dalio (explains how understanding the past predicts future movement in the market). It’s maybe very advanced but they are no in between in the market.
But if it means taking small risks by investing in well-known etfs, then that’s fine. If it’s investing in single stcoks, then you need to learn a lot more.
You’ll end up just stressing them out. They need to know that their dad is a master of it and can reach out anytime they need him.
On top of that, investing real money from hard work is a completely different thing that playing around with pocket money.
Couple things that came to mind when I read your post, and I wish I knew when I started my investing journey :
– How capital gains taxation work. You can offset (realize) gains with losses, which means it’s more interesting to hold multiple positions. Once you know how to do this effectively, you will no longer be concerned about all your profits being eaten by taxes. I started my investing journey with ETF but now only do stockpicking (large or mega caps only, mainly US due to low fees).
– All the “behind the scenes” impacting stock prices. Stockpicking is daunting because of the “lack of diversification” and doubts about picking the wrong stock. Being able to perform a (simple) due diligence on a company and understanding why there’s a downtrend/uptrend means gaining confidence when investing and making better choices.
Anyways, I’m playing devil’s advocate but I think stock picking would be the best exercise for them. it’s less daunting when it’s only small amounts in play. Be mindful of fees linked to fractional shares. Trading US stocks is probably the cheapest and most liquid.
YTA.
Leave them alone. They’re kids.
Have a look at Revolut. They are a bank and have a licence for the EU. What is interesting is using their app you can invest and save. The saving is fun as the interest is added daily which is a great education in itself.