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My Attempt To Make My Daughter Financially Independent

How To Make A Child Financially Independent

She is only 2 and a half and has no clue as to what her daddy has planned for her. The plans are big but very simple to adopt and implement. Her Father is hell-bent in making his Daughter Financially Independent.

He hatched the plan years before she arrived and as soon as she did, it was time to set the ball rolling.

And the best part is, every single Parent can emulate this plan and charter a course for their child(ren) to be financially independent and well-off and that too at a ripe age.

As for the daughter, she will, in due course of time, be euphoric to learn what she has in her kitty.

Do you want to know what he has in store for her?

Excited!!!! Curious!!!!

Let’s get things rolling and raise the curtain on the strategy that he has on his mind.

Piggy Bank Is Passé

‘Once I saw my parents argue that we didn’t have a lot of money anymore. So, I did what I had to do. I got my piggy bank and I went out to the backyard and buried it’ – Jack Handey

All of us grew up saving all that we had in a piggy bank safely tucked away in the corner of our cupboard.

The piggy bank was the most important thing we ever possessed and putting money in it was the most pleasurable experience for any kid.

The sound that the coins made inside it was the sweetest that a kid ever heard.

Whatever money we got was poured into the piggy bank and watching it grow heavier was gratifying.

As for the Parents, there was no better way to inculcate discipline in terms of savings and importance of money in our child(ren).

But, times have changed. A Lot.

Coming to think of it, there was no interest that could be earned on the amount fed into the Piggy Bank.

Furthermore, the purchasing power of money depreciated over time.

Doesn’t this seem like a double whammy?

Oh!!!! And I almost missed mentioning that sooner rather than later when the curiosity got the better of a kid, the Piggy Bank will be broken and all the money would ultimately be utilized.

Therefore, what is the best way to make use of the money that a kid gets and be on course to make him/ her Financially independent?

Money’s Best Friend

“I made my first investment at the age of 11. I was wasting my time up until then.” – Warren Buffet

To put it simply, in investing, time is one’s best friend.

This is because the use of the eighth wonder of the wonder comes into play- The Power of Compounding. I won’t harp on the importance of it any longer as a lot has been spoken about it with Illustration in the earlier blogs.

There is no better person than Mr.Warren Buffett, the biggest Investor of all time and one who has made the best use of Compounding ever in History and become financially independent at a very young age. Even he started at the age of 11 and later declared that he had wasted time till then.

Imagine, many of us don’t even have an inkling on Investing and being financially independent till we are in our 40s or maybe 50s.


Having said that, I am so happy to declare that the daughter will beat Mr.Warren Buffet at least in terms of starting out her Investing journey.

And, so can yours.

Thanks to her Father (unabashedly), she is well on her way to be rich. And that too well before she turns marriageable age.

Isn’t that cool?

Let me explain how.

The Power of Time in Investment

“I wonder why being financial independent isn’t seen as a one of the fundamental rights of the citizens in our country.”

Every child that is born in India is showered with blessings in the form of Cash from its near and dear ones. This is a ritual that has been going on since ages and shall go on for eons to come.

Instead of putting the Cash in a piggy bank or even in a Savings Bank account which earns a paltry return (2.5% in today’s times) is unwise.

So, what is the best way to make use of this money?

Can you guess?

Yes, you guessed it right. Invest.

What does one stand to gain from it?

A Lot.

Let’s assume that the daughter gets in Total 1 Lac from her well-wishers. Her Father invests that amount in a Nifty Index Mutual Fund and sleeps over it.

What will be the fate of that 1 Lacs at various time intervals at varied rates of return?

Let me illustrate with the help of the table below.

The Magic

Here is a sneak peek over the same:

Time Period Future Value @ 5% Return Future Value @ 6% Return Future Value @ 7% Return Future Value @ 8% Return Future Value @ 9% Return Future Value @ 10% Return Future Value @ 11% Return Future Value @ 12% Return Future Value @ 13% Return Future Value @ 14% Return Future Value @ 15% Return
At 0 Years ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000 ₹100,000
At 5 years ₹127,628 ₹133,823 ₹140,255 ₹146,933 ₹153,862 ₹161,051 ₹168,506 ₹176,234 ₹184,244 ₹192,541 ₹201,136
At 10 years ₹162,889 ₹179,085 ₹196,715 ₹215,892 ₹236,736 ₹259,374 ₹283,942 ₹310,585 ₹339,457 ₹370,722 ₹404,556
At 15 years ₹207,893 ₹239,656 ₹275,903 ₹317,217 ₹364,248 ₹417,725 ₹478,459 ₹547,357 ₹625,427 ₹713,794 ₹813,706
At 18 years ₹240,662 ₹285,434 ₹337,993 ₹399,602 ₹471,712 ₹555,992 ₹654,355 ₹768,997 ₹902,427 ₹1,057,517 ₹1,237,545
At 20 years ₹265,330 ₹320,714 ₹386,968 ₹466,096 ₹560,441 ₹672,750 ₹806,231 ₹964,629 ₹1,152,309 ₹1,374,349 ₹1,636,654
At 25 years ₹338,635 ₹429,187 ₹542,743 ₹684,848 ₹862,308 ₹1,083,471 ₹1,358,546 ₹1,700,006 ₹2,123,054 ₹2,646,192 ₹3,291,895
At 30 years ₹432,194 ₹574,349 ₹761,226 ₹1,006,266 ₹1,326,768 ₹1,744,940 ₹2,289,230 ₹2,995,992 ₹3,911,590 ₹5,095,016 ₹6,621,177
At 35 years ₹551,602 ₹768,609 ₹1,067,658 ₹1,478,534 ₹2,041,397 ₹2,810,244 ₹3,857,485 ₹5,279,962 ₹7,206,851 ₹9,810,018 ₹13,317,552
At 40 years ₹703,999 ₹1,028,572 ₹1,497,446 ₹2,172,452 ₹3,140,942 ₹4,525,926 ₹6,500,087 ₹9,305,097 ₹13,278,155 ₹18,888,351 ₹26,786,355
At 45 years ₹898,501 ₹1,376,461 ₹2,100,245 ₹3,192,045 ₹4,832,729 ₹7,289,048 ₹10,953,024 ₹16,398,760 ₹24,464,140 ₹36,367,907 ₹53,876,927
At 50 years ₹1,146,740 ₹1,842,015 ₹2,945,703 ₹4,690,161 ₹7,435,752 ₹11,739,085 ₹18,456,483 ₹28,900,219 ₹45,073,593 ₹70,023,299 ₹108,365,744
At 55 years ₹1,463,563 ₹2,465,032 ₹4,131,500 ₹6,891,386 ₹11,440,826 ₹18,905,914 ₹31,100,247 ₹50,932,061 ₹83,045,173 ₹134,823,881 ₹217,962,218
At 60 years ₹1,867,919 ₹3,298,769 ₹5,794,643 ₹10,125,706 ₹17,603,129 ₹30,448,164 ₹52,405,724 ₹89,759,693 ₹153,005,347 ₹259,591,866 ₹438,399,875

And the figures are mouth-watering.

When his daughter turns an Adult, she will be sitting pretty with over 12 Lacs in her kitty. Needless to say her Father would definitely be investing in Nifty Index Mutual Fund which has historically given Outstanding returns @ over 15% beating every other asset class on its way.

And all this when no returns are generated when money is placed in a Piggy Bank.

What Every Parent Can Do for Their Child?

“Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffet

I wish when I was his daughter’s age we had the avenue to invest that we have today.

Notwithstanding, I am happy that the daughter would reap the benefits in the future and be Financially Independent.

The message to anyone reading this is loud and clear.

Piggy Bank is obsolete. Saving is not enough.

Time to put the money to better use.

I urge you to take a look at the above table and absorb the numbers once again.

Invest for your child’s future.

Aside, I haven’t even spoken about the lessons this might teach our children. Maybe for some other day.

Well, finally, let’s raise the curtains now. The Father in the above case is me and the little girl is my own flesh and blood.

Happy Investing and Happy being Financially Independent….

Explore more and read: Money Matters

9 thoughts on “How To Make A Child Financially Independent”

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