Enhances your loved ones' life-long money skills

The holiday season is in full swing and for many panic has set in among those who fret over finding the right gifts for family members and friends. This year, instead of purchasing expensive items that will probably only end up in the back of someone's closet, or be returned in exchange for some other item with little or no future value, why not consider an investment in a gift that will help to build your loved ones' financial IQ and impart valuable money skills that will last a lifetime.

n Mutual funds:

Mutual funds are a popular form of investment because they offer a convenient, cost-effective and easy way to invest in the financial markets.

The idea behind a mutual fund is simple: many people pool their money in a fund, which invests in various securities. The overall risk is reduced through diversification and active management by professional money managers.

Giving shares in a mutual fund can be an excellent way to educate your loved ones about investing. Some funds offer a great opportunity for investors to learn about the market by providing materials and reports explaining business and investment concepts.

n Individual shares of stock:

There are some good stocks trading on the Bahamas International Securities Exchange (BISX). Over the long-term, equities (shares) provide a higher rate of return than many of the other traditional forms of investing. If you are thinking about giving shares as a gift, contact one of the local brokerage houses. These firms employ qualified investment professionals who can help you decide which investment is best for you.

n Government Bonds:

Don't forget about Bahamas Government bonds. These bonds are considered to be one of the safest forms of investing as the issuer (the Government) is contractually obligated to not only pay back the principal amount borrowed, but also as a reward for lending your money, you will also receive interest payments, twice per year.

You can contact the Central Bank of the Bahamas for more information.

n Open a College Savings Plan account:

A college savings plan can be a perfect holiday present. According to the US census Bureau, over an adult's working life, high school graduates earn an average of $1.2 million; Associate's Degrees holders earn about $1.6 million; and Bachelor's Degree holders earn about $2.1 million.

However, the sad reality is, that paying for college is very expensive and while many Bahamians want to send their kids to university, many cannot afford to. An investment in a college savings programme can offset these costs and ensure that your sibling has a future full of endless possibilities.

n An Individual Retire-ment Account: An investment today in a retirement plan is an investment for the future. With statistics indicating that two thirds of all Bahamians have less than $1,000 in their bank accounts; the absence of pension legislation; and statistics from NIB stating that if serious measures are not undertaken, the NIB Fund (i.e. your retirement benefits payments) will be depleted by 2029, it's plain to see the wisdom of creating your own pension plan.

Retirement can either be a blessing or a curse. After all, it is a time in our lives when our income ceases but our expenses not only continue but in some instances (e.g. medical care) will actually increase. An investment in a retirement plan is an excellent way to help your loved ones save for a comfortable retirement.

n Financial education:

You can also give the gift of financial education. Possible gifts include a subscription to a financial magazine, a book on personal finance, a course at one of the local colleges, on money management, or a session with an experienced financial planner.

While at first glace, the 'financial gift' may not seem as exciting as some of the other gift-giving options that you face, we hope you see the long-lasting benefits of this approach. Happy shopping!

Please send your comments and feedback to info@colinafinancial.com