BY: ANDREW STEWART
Technology is transforming industries at an incredible rate – and this will only continue. Just look at what Tesla did to the taxi industry and oil companies. Our children’s future is getting more difficult to predict every year. Companies and industries that dominated the world when we were growing up have disappeared in less than a decade.
In 1998, Kodak employed 170,000 people across the globe and sold 85% of all photo paper worldwide, and was then replaced by digital cameras within the span of just a few years. 70% to 80% of jobs will disappear in the next twenty years, according to research.
Sears was the world’s biggest department store before being replaced by its online opponent, Amazon, within a couple of decades. Typewriter ribbons were used for over fifty years before being replaced by printer ribbons, which were then replaced by laser printers – now being replaced by 3D printers. And all of this happened in less than twenty years. Vinyl records were replaced by 8-track tapes, followed by the Sony Walkman and cassettes, then CDs, and now audio streaming is the main way we listen to music. These examples remind us we don’t know what the changes ahead will bring and how it will affect our kids’ futures. So how are we supposed to plan?
To plan for our children’s future, we must think outside the box.
For over twenty years, parents were told by governments and financial companies, “Put aside money for their university education now to prepare them for a career in the next twenty years.” However, according to the Bureau of Labor Statistics in the United States, only 33% of all jobs require a post secondary degree. Parents need to think outside the box that financial companies put them in. Instead, we should be asking this one question…
Will my plan for my child’s future provide them with options, or will it limit their future?
The question isn’t whether to pursue an education. The question is what kind of education will my child need and what more can I do to set up their financial future than a simple government sponsored savings plan for education purposes alone?
Our children’s future is global, and our financial plan for their future should be too. Our plans for their future should now focus on all possibilities and everything in life, not just education. It should include planning for the down payment on their first home, maybe even funds to start their own company one day or for their retirement since only 32% of Ontario workers even have a company pension plan.
When you look at your child, think of your own experience. Did your parents’ plan help you get a head start in life after you finished school, or were you on your own? Our children have greater choice than any of the generations that came before them. This isn’t about protecting them from an unknown future; it’s about planning for an unknown future. Your job as their parent is to give them the freedom to choose.
What are the options available to us to start a financial plan for our children? A whole life participating insurance contract is a tax-free investment parents and grandparents can open for their children in Canada. It will pay an annual tax-free dividend for life which can be used towards any university or education program they choose anywhere in the world. In their adult years; it can help with a down payment on their first home, funding their own business one day if that’s their dream, any financial need in life.