You CAN give your children (and the children in your life) a head start on financial success. And it is simple!
1. Invest for them.
Instead of buying them toys and clothes when they are too little to care, invest in stocks and bonds. Create a custodial fund for each child.
Afraid to invest? Even a savings account will be helpful down the road. Think about having enough money for the down payment on a car, house, a travel year, or dream wedding…
2. Set the expectations.
As children grow older, and develop their own opinions, remember YOU are the parent/adult. Set the non-negotiable expectation that a certain percentage of every dollar they receive will go into their “future me” account, whether it be savings or investments.
3. Get them involved.
This is when you can really start to have fun. Since they have opinions and want to be heard, let them start to choose what they invest in. What are their favorite shows, games, characters, etc? Explain to them that they can become an owner of their favorite things, whether it is Disney, Apple, Microsoft, a car company, or whatever. Help them research the ticker symbol of their favorites and walk them through the process of buying a full, partial, or multiple share(s).
4. Ask them for ideas.
Children are so creative and they have no idea what the boxes are so it is easy for them to think outside those pesky boxes. So, ask them for ideas on how to save the money for that future goal, whether a new phone, family trip, or something more practical.
5. Encourage entrepreneurship.
Children are great salespeople. After all, their survival depends on getting others to meet their needs.
I started mowing lawns at 12 for $2/hour. Sometimes I cleaned houses, ironed clothes, or babysat (although I did not enjoy any of those domestic duties). In high school, I sold candy bars on the school bus (I bought them for $0.10 each and sold them for a $1). I started working in kiosk at the mall when I was 14.
Today, minors have so many opportunities that did not exist in the 1980s. They can start a youtube channel that they may eventually be able to monetize. They can create products and sell them on etsy. They can create websites and apps. They can manage social media accounts. Thanks to technology, the sky is the limit. Encourage their creativity and their dreams.
And, of course, keep them safe.
How are you helping your children (and/or the children in your life) create a foundation for future financial success?