I recently came across a rich doctor who wanted to insure his daughter. I convinced him to insure his son-in-law instead. After all it was his daughter who needed the protection. Parents should not get emotional when making financial decisions for their children .
We certainly, want to give our children an easier run, than what our parents had. But are we spoiling them by giving them more “Material Benefits” than what we had at the same age??
Our parents grew up in India during 1960’s and 70’s. They had tough life even for the basic needs. Queues for ration, milk, kerosene are the stories every child would have heard.
Children who receive financial assistance from their parents, tends to under perform in the income and asset accumulation stakes. This also have impact on their personal lives. As parents our expectations should be to maximize their education investments. This investment pays rich dividends.
Other expectation includes medical security. These valuable gifts should be structured and transparent to all your children.
Buying a house evokes strong emotion in parents. But practically, if parents provide financial crutches to their children, they may end up into a costlier deal than what they actually can afford. It recalls me here of a man who broke open the cocoon so that the butterflies could come out. The butterflies did come out but they never fly L. The man did not let the butterflies strengthened on their own and hence, they could never fly.
Parents should not break the cocoon for their children. It will not give them the strength and the quest to succeed in long run.