Convincing older generations to adopt new technologies can be challenging. Often one has to rely on a different approach than one would with their friends. It takes tact, patience and conviction to convert cautious parents into cautious investors because they are essentially trusting you with their money.
We put a step-by-step guide on how you can introduce cryptocurrency investments to your Indian parents.
Educate yourself before you educate others
The first step to bringing your parents on board is to understand the industry better. This will enable you to explain things to them in a more intelligent way. There are plenty of resources online that can help you with this. Read blogs, studies, and articles on crypto — and don’t forget to look up the terms you don’t understand. If you’re not sure what the difference between a blockchain and a ledger is, you have to know. If you feel you don’t know enough about the industry, then you shouldn’t be going to your parents just yet.
Instead, you should be spending at least a month reading up on everything you can about cryptocurrency. It’s not just about getting your parents to invest in it — it’s about getting them to invest in the right one.
Explain how cryptocurrency works in layman’s terms
Your parents probably have no idea what a blockchain is — and they definitely don’t understand what a private key is. So, before you go spouting off numbers and terms, explain how cryptocurrency works in layman’s terms. Tell them that a blockchain is like a digital ledger that keeps track of every transaction made with a coin. Also, tell them that a private key is like a password that allows you to access your funds. Once they understand these two terms, you can move on to explaining how the system works. You can tell them that instead of a central authority, like a bank, controlling the money, a network of computers called nodes does — and these nodes are visible to everyone. This means that every transaction made using cryptocurrency is visible to anyone — and this is why scammers can’t manipulate the system.
Find out what exactly is scaring your parents about cryptocurrency
There might be something that scares your parents about cryptocurrency and you don’t know about it. If you don’t know what’s scaring them, you won’t be able to calm their fears. So, before you try to convince your parents to invest in cryptocurrency, find out what scares them about it. You can do this by casually mentioning how much you love investing in crypto and asking them why they aren’t investing. If they tell you they are scared of scams, losses, or something else, address their fears and let them know you are working to avoid them. If they are scared of something you can’t address, you should probably find a different way to convince them.
Don’t mention the word ‘bitcoin’
This might seem like a no-brainer, but don’t mention the word bitcoin to your parents while explaining cryptocurrency. This is a term they have probably already associated with scams and pump and dump schemes. Your parents will likely think you are trying to scam them or trick them into losing their money. Instead, talk about how cryptocurrency is revolutionising the financial sector. Also, tell them that this is the future of money and that it is here to stay. If you want to mention bitcoin specifically, talk about how this is just one of the cryptocurrencies on the market.
Mention how much you trust the company you are introducing to them
Instead of telling your parents about all the scams in the industry, tell them about how you are investing in a legitimate company. If you are going to invest in a company, make sure it is one you trust. You can do this by reading up on their whitepaper and understanding what they do. If you don’t trust a certain company, then you shouldn’t invest in their cryptocurrency. You can also look up any company online to see what others have to say about them.
Trust is important when it comes to handling your parent’s money. If they don’t trust the company you are investing in, they won’t invest in it. If you have confidence in the company you are investing in, then your parents will have confidence in it as well. Show them a few articles that talk about the company and why you trust it. If there is a particular reason why you trust the company, make sure you let them know about it.
Full disclosure on crypto volatility and taxation
Your parents probably don’t want to invest in something as volatile as cryptocurrency. They are probably worried that they will lose their money. It is very important to show them how volatile the market is. You can do this by telling them about how much the market has grown in the last year and how much it has plunged in the last few months. Once they realise that the market is volatile, they will know that it is risky to invest in it, but the volatility can also be profitable.
It is excessively important to disclose the current taxation rules on trading in cryptocurrencies. Tell them that the space is unregulated in the country and discuss the legalities as well. Full disclosure is very important to avoid any future troubles.