Guest Article #31: For the Joy of Sharing

Financial Literacy for the Young

By Oliver Sequeira
Senior Management BFSI experience across Sales, BD, Operations and Customer Service

Foreword by Venkat

There have been various interesting guest and student articles so far covering the ways to appreciate and experience the value of things viz. When we lose them, being in Switzerland, through stories, from one’s own child, improving learning habits, loving oneself, latent messages in art, in the will to explore, creating happiness than to search it, in conscious consumerism, redefining perfection, in avoiding overload of information and so on. Anything of value (in quality and durability) comes through conscious effort, understanding and practice of good habits run on good principles. It then makes sense to price this effort and the gamut of knowledge that made it possible (which themselves have costs we already paid in the process of education).

In this wonderful writing by Oliver, he shares his rich and vast experience in financial literacy as useful tips for the young. While there are a few areas of the financial literacy covered in schools, it does not come with an end-to-end view or an independent program in most institutions in my understanding. Financial literacy is certainly a critical life skill and it is better to learn it from basic principles than to learn the hard way through experiences after schooling. It is interesting to note Oliver’s recommendations for every age bracket through the schooling years. He has a lovely prize-winning game in the end for young readers of this article. A big thanks to him for sharing his practical advice to the young to become financially independent sooner.

Going by Oliver’s lovely article, fortune favors not only the brave but also the financially literate! Read on to learn some basic skills to achieve it.

Hi this is Oliver Sequeira. I started my career in 1991 and worked with Banks, NBFCs, IT, Insurance and Real Estate companies for close to 3 decades. Brands I was associated with were ICICI, ABN Amro, L&T, ING and a few others. At ING, where I spent 13 years of my career, I had the opportunity of leading the country-wide Sales Operations and Customer Service teams.

I began my personal investing journey when I was 19 where I invested my entire first year’s income in 1 stock. Thanks to some early advice from my dad and a disciplined journey, I could earn my F.I.R.E. (Financially Independent and Retired Early) status well before I was 40 years. During the last few years I have been an angel investor apart from helping my clients on their journey towards wealth creation and earning a F.I.R.E status. My profile:

Financial Literacy for the Young

Schools are designed to teach skills and subjects to prepare kids for college or the working world, such as reading, Math, Science and more. Primary and Secondary education emphasize broad knowledge, exposing kids to a variety of ideas and topics. But there’s one topic that many schools don’t teach students: Financial literacy.

Teaching financial skills to kids before they enter college or the workforce is crucial to helping them grow into adults who can achieve financial security and success. Financial literacy is “the ability to use knowledge and skills to make effective and informed money management decisions” according to Investopedia. While Math is certainly a part of financial literacy, so is the ability to understand difference between simple and compound interest, difference between savings and investment, impact of inflation, how to avoid and pay down debt, one’s credit rating, and to understand how financial transactions and products work in order to make informed financial decisions.

Financial literacy to kids should ideally be imparted by parents from an early age. Following are some of the steps which can be undertaken:

  1. Reading out stories which help them inculcate the habit of savings early on. Few stories I can think of are, “Ant and the Grasshopper”, and “Hare and the Tortoise”
  2. Gifting kids a piggy bank and helping them fill it up on a daily/weekly/monthly basis and as and when they grow, motivate them by adding additional funds to the filled piggy bank thereby explaining the concept of interest (simple and compounded).
  3. Nudging them to help with household chores and rewarding them with money which they can save and then buy toys/clothes/food of their interest. This will teach them a critical lesson that money doesn’t come free and they need to work for it.
  4. When the kids are in their early teens, piggy banks can be replaced by a kids savings bank account as well as starting an SIP (Systematic Investment Plan) in mutual funds. This will introduce them to products and risk adjusted returns and most importantly the “Power of compounding”.
  5. From their pre to early teens, parents should encourage them to visit the local grocer or super market or vegetable vendor to buy daily household items so that they can understand the value of money, calculate the change to be returned.
  6. During their mid to late teens, they can be introduced to investing in the stock markets by enabling a Trading cum Demat account for them. Here they can be guided to buy shares of companies which they observe and use daily. For e.g., the bank where they have a savings account, the FMCG company which provides their favorite biscuits, noodles, toothpaste, groceries, the shoe company, the durable company which manufacturers the fridge, TV, AC, microwave etc. being used at home, the electrical company which manufactures the LED lights, fans used at home etc.
  7. During their late teens to early 20s, parents should also involve kids in decision making especially when it comes to buying household items like electronics, cars, vacations etc. Also at this age introducing them to how a household budget is created is quite helpful. This involvement will help them hone skills of comparing products/services apart from introducing them to an important concept of Cost vs. Benefit
  8. Last but certainly not the least, kids emulate the behavior of parents and older siblings. Hence, it’s very important especially for parents to exhibit right behavior when it comes to money. Spending beyond means, buying items/food and not using it are some poor behaviors which kids pick up easily and then get habituated to it.

In this article I have attempted to cover the importance of financial literacy for kids and how parents can help them learn through daily practical situations which will enable them to understand the concepts as and when they are taught in school/college.

For children reading this article, I would like to share a simple story and would like them to answer the three questions at the end of the story:

There was once a king in India who was a big chess enthusiast and had the habit of challenging wise visitors to a game of chess. One day a traveling sage was challenged by the king. The sage having played this game all his life all the time with people all over the world gladly accepted the Kings challenge. To motivate his opponent the king offered any reward that the sage could name. The sage modestly asked just for a few grains of rice in the following manner: the king was to put a single grain of rice on the first chess square and double it on every consequent one. The king accepted the sage’s request.

Having lost the game and being a man of his word the king ordered a bag of rice to be brought to the chess board. Then he started placing rice grains according to the arrangement: 1 grain on the first square, 2 on the second, 4 on the third, 8 on the fourth and so on.

Following the exponential growth of the rice payment, the king quickly realized that he was unable to fulfill his promise because on the twentieth square the king would have had to put ??? grains of rice. On the fortieth square, the king would have had to put ??? grains of rice. And, finally, on the sixty-fourth square, the king would have had to put more than ??? grains of rice which is equal to about ??? billion tons.

It was at that point that the sage told the king that he doesn’t have to pay the debt immediately but can do so over time. And thus the sage became the wealthiest person in the world.

Question 1. Fill up the number/s in place of the ???
Question 2. Which financial concept is learnt from this story?
Question 3. How many tons of rice does India consume annually?
Kids can email their answers to Mr. Venkat ( and there will be a surprise prize to the first winner.

By Oliver Sequeira

Guest Article #32: My Native Place

Guest Articles: Archives

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