Zerodha wants to teach your kid the ABC’s of Finance

Zerodha Varsity has launched Varsity Junior to teach various financial concepts to children as young as eight years old. The initiative is being launched with a video series, which is clearly reminiscent of the popular 1980s soap opera ‘Malgudi Days’ (based on RK Narayan’s novel ‘Swami & Friends’).

“We wanted to give a very warm feel. We all love ‘Malgudi Days’. So, we wanted to bring ‘Malgudi Days’ alive to the whole thing,” says Karthik Rangappa, Vice President, Education Services, Zerodha .

It is no coincidence that the protagonist in the first episode of Varsity Junior is named Mani.

Why teach children now?

Varsity Junior is focused on younger children ages 8 and up. But are these kids ready to invest when they are just learning to count numbers in their schools? Why teach them now?

“The idea behind Varsity Junior is not focused on investments, rather it is to instill in the minds of young Indians the building blocks of financial literacy early in their lives and apply some of these concepts to other aspects of their lives as well. Maybe,” says Rangappa.

This is not the first time, Zerodha Varsity is experimenting with content for this age group. In 2016, it published Rupee Tales, a set of five illustrated stories that explain basic concepts of finance such as banking, savings, insurance, taxes etc. in a slice-of-life, light-hearted stories.

But post COVID-19, Rangappa says video became the primary source of content consumption and that’s when Zerodha Varsity decided to expand on Rupee Tales and come up with a video format, and the idea of ​​Varsity Junior was born.

“Our idea is to tell a simple story to kids and build a financial lesson into it. For children watching the story, it is just like any other children’s story. They may not even know that this story was specifically for the ‘financial’ lesson all the way to the end. As the story unfolds, it culminates into a financial lesson,” says Rangappa.

Varsity Junior is planning to release 15-20 videos in coming days. The first episode ‘Ideas by the Lake’ expands on the idea of ​​compounding through a story where Mani and his friends are looking for ways to become rich.

what about maths?

All financial concepts are ultimately backed by hardcore math. Can children as young as 8 understand the math behind a concept like compounding?

Rangappa says that knowing the maths behind these financial concepts is not that important, as long as one knows how it can affect your life and how you can use that concept.

“For your daily life, you don’t need to know math. All you need to know is what compounding is and how it affects your investments and how you can use it. You don’t need to know That’s how compounding is derived mathematically. If you eliminate that part and stick to the practical aspect, it becomes quite easy.”

Rangappa explains, “If you start talking about the math involved, the present value, the future value of money and all that other stuff, you will lose 90% of your audience.”

no money experience

Most children above the age of 8 are likely to have little access to money, except for pocket money in some cases.

How can children be taught about money without experiencing money firsthand?

Rangappa agrees that this can be a problem, but it is a difficult problem to solve. “It has to come from the parents. Parents have to make up their mind and start giving some money, while also ensuring that the money is used in the right way. So, we as financial literacy providers All I can do is see that the money once given is used in the right way,” he says.

ZuPay, an investment arm of Zerodha’s venture capital (VC) arm Rainmatter, has built a feature where parents can approve initial investments for their children. But Zoope is focusing on teens and not the younger age group that Varsity Junior is targeting. Teenagers are still more likely to get some pocket-money from their parents.

saviors of tomorrow

Most other brokers Mint spoke to have not yet started creating content for children above the age of 8.

Some initiatives have been taken, but these are focused on adolescents and young adults.

Education and financial literacy have been a part of Zerodha’s journey since inception. In 2010, Zerodha was launched and Zerodha Varsity was launched in 2014. Zerodha founder Nitin Kamath regularly writes on various financial topics on his blog and on Twitter.

In a recent tweet, he pointed out that if the basics of finance are taught early in school, children are more likely to remember them and draw on these lessons as they grow up. His tweet was in response to an issue raised in Parliament by BJP Lok Sabha member Tejashwi Surya, who pointed out that due to lack of financial literacy in the formal schooling system, young Indians were not equipped with the right money management skills when they entered Was. job market.

While this may not be the focus of Zerodha, a by-product of its initiative is likely to be on the minds of investors and savers of tomorrow. Children with their impressionable minds remember the brands they associate with at such a young age. But more importantly, better-informed kids will become better-informed savers and investors tomorrow, who can plan for their retirement and avoid falling prey to fraudulent schemes.