2 Common Financial Advice That Are No Longer Relevant To Our Children
When teaching our kids, its very often that we will pass down what had been taught to us by our own parents. From the way we speak, interact with others, habits, to our beliefs about the world and finance, a large part of it is influenced by what we see while growing up.
However, the things that bring our parents to where there are currently, may not be relevant nowadays. As such, it is important for us to re-examine their teachings, to see if it’s still appropriate for our children.
An area that is especially affected by this shift in relevancy, is the area of personal financial planning. Here are two common financial advice given by our own parents to us, that are starting to hold less weight in today’s context.
#1 Just Work Hard And Save
In our parents generation, times are simple especially in Singapore. Not many people are educated about finances and the fastest way to wealth that people know how, is to work as hard as possible and save their money.
However times have changed, with costs of living rising up quickly compared to our parent’s generation, our income seemingly hasn’t caught up in comparison. For example, many fresh graduates that came into the workforce in recent years will find themselves having difficulty or have to rack up larger amounts of loans in order to get their house than before. In the 90s, the average wage of a professional in commerce ranges from $2,500 to $3,500, and this year, the average wage is in ranges of $5,000 to $6,000. That is approximately 2 times growth in salary. In contrast, a new sale flat in the 90s start from as low as sub $100,000, while a new sale flat start from $400,000 nowadays. This translates to more than a 3 times growth in property prices.
As such, just merely saving alone with low interest rates just doesn’t cut it anymore. It is crucial to not just rely on just our day job to grow your wealth, and start educate ourselves in how we can make money work harder for us. Skills like investing, setting up a business or side endeavour, pay exponential dividends especially if we can teach them to our kids young, outside of traditional schooling.
#2 Just Study Hard And Find A Cushy Job
While it is important for us to have education, it is more important to learn to have a spirit of learning. Gone are the days where getting a degree would guarantee an iron rice bowl.
It’s more about being ahead comparatively with others, rather than a paper qualification. Being in a cushy job that is bought by a 4 year degree, is a strategy that is no longer relevant for one to stay competitive.
