How to motivate your parents to invest
MANILA, Philippines – Talking money with your parents can be a tricky conversation, but one that is necessary as they approach their retirement years when they need to invest.
Financial adviser Salve Duplito said some parents may seem hesitant to discuss financial investments with their children because they resist the reversal of roles.
Children, on the other hand, put off having the conversation because they might seem too eager to know about their inheritance or unwilling to spend for their parent’s retirement needs.
But Duplito stressed the importance of discussing financial matters with aging parents because “the ability to make complex financial decisions go down as you age, regardless of intellect or educational background.”
She cited some professors at Texas Tech University have documented this decline at 2 percent per year.
To motivate your parents into investing, Duplito suggests hiring a good financial adviser to sit down with all of you to talk about the consequences of underinvesting.
“Do your research and make sure that you’re not getting a salesman in disguise. Ask hard questions,” she said on ANC’s “On The Money.”
Duplito said it is advisable to find fee-based independent financial advisers.
The financial adviser should be able to prepare a well-crafted financial plan that will make investing simple for the parents.
“Don’t pressure your parents into putting their money in something they don’t understand. Let them experience investing through games and simulations,” said Duplito.
She noted, however, that children can also set good examples to their parents by being smart investors themselves.
Another way to keep them motivated to invest is starting them off with a cash gift of around P5,000 to P10,000.
“Just like exercise, it’s getting up in the morning and starting the routine, that’s the most crucial moment, so give them a gentle push in the direction with a cash donation,” Duplito said.
“Be patient, visible and attentive when they feel they are losing money,” she said, adding that it may take a little “hand holding,” similar to how parents guided their children when they were young.