Economics demand entry fees: small children become small investors

Economic experts want the state to give children 10 euros a month for investments on the capital market. The social association doesn’t think so.

Anyone who wants to become a master should practice early Photo: imago

Berlin taz | The economists demand that the state provide children aged six and over with 10 euros per month, which their parents and then they can invest in stocks, bonds or other securities. The aim is to introduce students to the capital market at an early stage. With this “children’s start-up allowance” it is possible to “anchor participation in the capital market early in life and thereby enable long-term experience with corresponding investments and their return opportunities for broad sections of the population,” explain the economists on Monday, also known as the Economic Advisory Council.

A small amount is sufficient, as the payment is not primarily intended to build wealth, but rather to gain practical knowledge. “Unlike previous measures, the proposed child start-up allowance aims to strengthen financial behavior through learning from experience – rather than theoretical knowledge,” said economist Ulrike Malmendier. The “children’s start-up allowance” also has an impact on the financial competence of the parents because they would initially take over the capital investment.

The funds should only flow into funds that are subject to strict EU regulations and offer a simple, secure investment option. If no investment decision is made, the money should go to a fund with a 100% equity share. The accumulated sum should be paid out on your 18th birthday – even after twelve years. In this way, economists say, children and their parents go through multiple financial cycles. In the long term, the payment would cost the state 1.5 billion euros annually.

The social association Der Paritätische doesn’t believe in this idea. “The suggestions of the Council of Experts have nothing to do with the reality of life for many children,” said managing director Joachim Rock to the taz. Every fifth child in Germany lives in poverty. “Financial literacy is not developed by anyone who lacks money for basic necessities such as food and clothing,” he said. “We must now invest in the education and participation of children and young people, not in questionable financial products.”