Happy 2020 and what a busy start to the year it has been!

This article is for parents who are interested in imbuing their children with financial wisdom.

Just as we are getting into the swing of things, i.e., getting balance in our work-life, recovering from the mini breakdowns for our children’s school arrangements and not forgetting, losing those extra pounds we put on over the festive holiday, it’s… Chinese New Year around the corner! Watch out for those salted egg-yolk fish skins!

No matter if you are pining about the long weekend as a sneak get-away (lucky you!) or if you are preparing to ‘red’ the home to usher in the Wind of Prosperity, we thought it best to share about how you might want to bless your children with the gift of financial wisdom during this festive season.

If you don’t teach your kids how to manage money, somebody else will.

That’s not a risk you want to take, parents!

If you find it awkward to talk to your children about money, why not use the upcoming festivities to start the ball rolling?

During Chinese New Year, as parents, not only do we have to distribute Ang Paos, greet and make small talk with relatives, but we also have to reserve one eye to look out for our little ones as they run around collecting their own ‘gold nuggets ’. We may even find ourselves reminding them to keep those packets safe (“Whose Ang Pao is this on the floor? Don’t want I keep ah…”)  and to get them to hand these packets over.

However, that’s not all, it is important to not just safe keep the money for your children but to get them to count them at the end of the day. It’s a practical and easy way to teach them to count money.

At the same time, the conversations about how they might want to use the money will naturally surface. Consider taking the opportunity to introduce to them the importance of saving for a future need. Teach them to learn to say ‘No’ to that new Nerf gun…

As parents, we do best when we can incorporate the teaching of values in our daily, normal interactions with our children instead of those heated lectures. Even more so when addressing the value of money and good money habits. Whether it is Chinese New Year, Hari Raya Puasa or Deepavali, these traditional festivities bring along a wealth of opportunities!

Making the ang paos work harder for them

On average, a child may collect close to $300 each year. While it may not seem like a lot, one thing our children have that we don’t is time on their side. A 1-year-old would have close to 64 years to retirement!  While you probably won’t be thinking about your child’s retirement now, for the sake of illustration, let’s see how far we can stretch these ang pao money.

We placed our child’s Ang Pao money into MoneyOwl’s well-diversified, low-cost, 100% equity fund with a projected average return of 6.7% per year. And since the average marriage age is about 27 years, we assume ang pao keep flowing in for 27 years.


As you can see from the illustration above, the power of compounding is most amazing over long periods of time. Imagine setting aside just $8,100 which is 27 years of Ang Pao money and then continuing to let the money compound over 37 years with no additional capital in, our child can reasonably expect $234,832 at age 64. It’s a lot more logical when you think about it this way.

What’s more, if our child starts working and continues to invest $500 a month into the same portfolio from age 27 for the next 37 years, it will grow their retirement fund by more than $1.2 million from these simple actions.

Take that ang pao and multiply it further!

Now let’s address another less far-fetched scenario but still consider setting aside our child’s Ang Pao money each year for at least 18 years when they enter a local university. Based on a 4-year degree programme, fees today cost on average $36,000. In 18 years’ time and with a conservative educational inflation rate of 4%, our child will need at least $73,000.



For this goal, investing our children’s ang pao money alone would not be enough. But with a little help from the government and parents setting aside $88/month over the 18 years or a one-time $11,288 (‘I want to huat huat’) gift into the same investment portfolio, our child’s fund can be fully met! Talk about the power of many helping hands.

What’s more, investing our children’s Ang Paos can provide the added benefit of flexibility. For example, if your child does not need to use the fund for education, he can easily repurpose it for something else. Back to the previous retirement example, such a goal suddenly doesn’t look too far off at 18!

Now if this sounds all sensible and you want to start implementing it during this festive period, here’s a quick guide on how you easily give your child a financial headstart with MoneyOwl’s portfolios.


All investments come with risk. What this means is that you may get back less than what you have invested. Make sure you understand what you are investing in and that it meets your financial needs before committing. Past investment performance is not a guarantee for future performance. If you have any doubts, please speak to our MoneyOwl Client Adviser first and we will be happy to address your concerns. 

How to use MoneyOwl to help create meaningful interactions with our children about money:

  • Parents need to open a MoneyOwl account by visiting our investment platform.
  • Key in our limited-time promo code of MOYR20 to get our fees reduced to 0.5% p.a. till June 2020. You need to fund your account by 31st Jan 2020.
  • Create a portfolio with cash and complete the online risk profile questionnaires. Consider when your child will be entering Poly/University in determining the time horizon.
  • Upon completion, you may specify a one-off top-up amount of at least $100 to start.
  • You will then receive a recommended portfolio and a projected cash value based on your need, ability and willingness to take risk.
  • If the recommended portfolio makes sense for you, proceed to Step 7. If you have concerns, you can always contact our MoneyOwl client adviser on which portfolio best fits your profile. Either way, do remember to give a name for your portfolio. You can name it after your child. E.g Abc’s Ang Pao Fund.
  • Follow the instructions on how you can begin to transfer your specified $100 from your bank account into the MoneyOwl portfolio.

And voila! You are all set. Your initial capital will now be invested into the fund and you will be happy to know that your portfolio value will be reflected each day when you log in to view the account. You can also see the performance of your investment portfolio since you started investing. This is shown as the Total Return in percentages.

Now to fully integrate this portfolio with your child’s Ang Pao takings, simply collect the Ang Paos, have your child count the money and hand it over to you, the parent. You can then simply make the transfer of the amount counted each year. Rest assured, each transaction is carefully recorded in the account under ‘Transactions’ if you would like to track how much you have contributed.

The author of this article, Colin Lai, is a client adviser at MoneyOwl.

For enquiries on CareShield Life Supplements, please email enquiries@moneyowl.com.sg for quotations