How to raise children - as per Islamic principles

Every child is born on Fitrah

Every child that comes into this world is born on the natural disposition (i.e. born on monotheism which is inherent in human nature).  The Holy Prophet (Sallallahu alaihi wa sallam) said:

Translation: Every child is born on the natural disposition (of monotheism).  Then the child’s parents make him a Jew, Christian or Zoroastrian, the way an animal is born whole, but don’t you see an animal with its ears cut off?  Then Hadhrat Abu Hurairah (May Allah be well pleased with him) started reciting this verse of the Holy Quran:  Surah Room-30.  (Sahih Bukhari, Hadith No. 1292)

When a child comes into this world, he/she comes with all abilities, a pure intellect and an unblemished mind, but the environment and surrounding try to take over.  If these latent abilities and good traits are not brought out, then like an unpolished diamond, the child will lose his/her sheen and remain as worthless as a stone in spite of being a diamond.