[Children's Money Education | Part 1] Gifting 1 million yen to my children. Not for their old age, but to let them live freely in the present.

I plan to gift 1 million yen to each of my three children when they turn 18.

However, this is not 1 million yen for them to spend freely.
I will give this 1 million yen one major role.
It is to put it into an index fund that invests in stocks worldwide and keep it there for a long time.

Why would I give a gift in that way?
It is because I believe that by gifting them 1 million yen, I can eliminate most of their anxiety about old age right now.

"There's no way 1 million yen can eliminate anxiety about old age, right!?"
-> You might think that, but the effect is actually immense.

And what I really want to give them is not money for their old age.
It is the freedom to challenge themselves with what they love and the work they truly want to do while they are young.

Things I have thought about after 17 years of providing financial consultations to over 3,000 households

As a financial planner, I have provided financial consultations to over 3,000 households for more than 17 years.
Education expenses, home purchases, insurance, asset management, inheritance, and retirement funds.

Having seen the lives and finances of many families, there is something I have been thinking about for a long time.
"What should parents leave for their children?"

Of course, if you can leave a lot of money, that is one form of help.
But just handing over money does not necessarily benefit the child in the true sense.
If they receive 1 million yen without knowing anything about money, they might spend it immediately. They might jump at something that looks like it will increase in value and end up losing it.
What is even more worrying is giving them the feeling that "money is something you can get easily."

If you know how to use it, money increases the freedom in your life.
However, if you don't know how to use it, it can actually end up robbing a person of their growth and freedom.

That is why I want to not just hand over 1 million yen, but to hand over the ability to manage money along with the 1 million yen.Currently, my children are 15, 13, and 8 years old.
I think I will actually start this education with my oldest child in three years.
This series is also my own memo for thinking about what to teach and in what order at that time.
But if there are parents who are thinking, "I want to teach my children about money, but I don't know what to teach," I am sure there will be parts that will be helpful.

Here is the first multiple-choice quiz.

Please think about it for a moment.

...
...
...

The correct answer is number 4, 32 million yen.

At 7.2% per year, it doubles every 10 years.

· Age 20: 1 million yen
· Age 30: 2 million yen
· Age 40: 4 million yen
· Age 50: 8 million yen
· Age 60: 16 million yen
· Age 70: 32 million yen

1 million yen becomes 2 million yen, 2 million yen becomes 4 million yen, and 4 million yen becomes 8 million yen.
The profit generated initially creates the next profit, and that profit creates even more profit.
This is the power of compound interest.
There is a simple way to calculate approximately how many years it takes for invested money to double, called the "Rule of 72."
If you divide 72 by the investment interest rate, you can find the number of years it takes for the money to approximately double.
72 ÷ 7.2 = 10.
In other words, if you can invest at 7.2% per year, it will double in about 10 years.

Of course, this does not always happen.

In actual investing, your money won't grow by a clean 7.2% every year.
There will be years when it goes up significantly, and years when it drops by 30% or 40%. There is no guarantee that it will definitely become 32 million yen by the time you are 70. There are also factors like taxes, fees, and inflation.
Even so, by diversifying your investments across companies around the world and holding them for a very long time, you have the potential to capture the growth of the global economy and those companies.

What is truly important here is not that it "definitely becomes 32 million yen."It is that at the age of 20, a seed of 1 million yen for the future has already been planted.If you knew that you would have about 32 million yen when you reached old age, what would that mean?
At the very least, the anxiety of having to "prepare for retirement from scratch" would be greatly reduced.

1 million yen for the future creates freedom in the present

Reading this far, you might think, "So in the end, is this just about saving money for old age?"
But what I really want to convey to my children is the exact opposite.

The 1 million yen for the future is something I, as a parent, will prepare in advance.
That is whyin your 20s and 30s, I want you to use your time, effort, and money to nurture your current self, rather than worrying about old age and hoarding money.is what I mean.

You can read books.
You can study things you are interested in.
You can go meet people you want to see.
You can travel to see worlds you don't know.
You can learn the basics of work and professional skills while working as a company employee.
After that, you could try the path of a freelancer or an entrepreneur.
Of course, continuing to work as a company employee in your own way is also fine.

And I want you to fail a lot. If you have the financial peace of mind that you will be okay in the future even if you fail, you can take on challenges.

What is important in your 20s isknowing what you like, what you are good at, and what you value in life.And once you find a field you are passionate about, give it your all.

Self-investment when you are young can yield higher returns than financial investment.This is because the skills and experiences you acquire will increase your income and career options for decades to come.That is not all.
The experience of challenging yourself with what you love, the people you meet, and the scenery you see while traveling are things you may never be able to buy back, no matter how much money you pay later.

The time of your 20s itself is a precious asset that you can only obtain once.
"


I am gifting you 1 million yen as a seed to eliminate your worries about old age. So, I want you to do things that you can only do while you are young."This is the biggest message I want to include with this gift.

Things I want to learn together before handing over the 1 million yen

However, I do not intend to hand over the 1 million yen without any thought.
Before I give it to them, I will create time to learn about money and life together with my children.

What is compound interest?
Why invest in global stocks?
Why not panic and sell even if the price drops?
How should one think about financial investment versus self-investment?
What is the difference between consumption, waste, and investment?
What are the things you like, are good at, and value?
What kind of work do you want to choose, and what kind of life do you want to live?
How can you protect your freedom from debt and fraud?

After learning these things, I want them to finally tell me in their own words, "What kind of life do you want to live using your money?"
They don't have to share the same views as me.
They don't need to memorize all the knowledge.
What is important is not doing what their parents tell them to do, but becoming able to think for themselves and choose their own lives.

When they finish that task, I will gift them the 1 million yen.
I am handing over not just money, but also future peace of mind and the wisdom to live freely in the present.
That is the financial education I want to provide for my children, as someone who has been giving financial advice for over 17 years.

So, before handing over the 1 million yen, how exactly will I teach my children about money?
What kind of tasks will I give them?

I will introduce that in this series, in the articles to follow.
This is also an important secret memo for me when teaching my children.

Next time, I will think about "self-investment while young," which may yield higher returns than financial investment.
In your 20s, invest in yourself rather than financial investments.
Next time, I will delve into why I think that way.

[Financial Education for Children | Part 2] 100,000 yen of self-investment becomes 26 million yen? In your 20s, invest in yourself rather than financial investments