My Updated Generational Wealth Guide
HOW TO SET YOUR CHILD UP FOR FINANCIAL SUCCESS
Congratulations on unlocking exclusive access to the ultimate guide for building generational wealth! I'm Mrs. Dow Jones, your Zillennial Finance Expert, and I'm SO excited to share my 3-step process to make your kid RICH!
Compound interest is when the interest you earn on your investment is REINVESTED, which then earns you more money. It is the secret sauce to building generational wealth. Here's how to use it to your advantage...
- Set Up Their Account: There are 3 main ways to invest for minors- 529 Plan (good for education costs), Custodial Roth IRA (child needs to work to qualify), or Custodial Brokerage. I chose Custodial Brokerage for my goddaughter Zia because it has the most flexibility! And you can open this account at Fidelity or Vanguard using their social security number.
- Start Early: For my goddaughter, I invested $1000 when she was born to give her a head start. Do whatever amount you can afford but the point is to just START ASAP like literally... today. Trust me.
- Automate Contributions: Make it effortless. For my goddaughter, I set up automated deposits of $100/ month and add $500 every year on her birthday. The automation is KEY.
- Choose Your Investments: Opt for low-cost index funds. I like VT, FRGAX, and BND!
- Watch it Grow: Over 18 years, witness the magic of compound interest. Even if you stop contributing at 18, their wealth could reach $7.6 million by age 65, with an initial investment of just $31,600 over 18 years.
Set your child up with good credit by adding them as an authorized user on your credit card!
- Authorize Them: Start building their credit early. Add your child as an authorized user on your credit card – no age requirement!
- Build Credit Early: Whether they use it to "teeth on" or make small purchases, every transaction contributes to building credit.
- Set Up Recurring Subscriptions: Keep the card active by placing recurring subscriptions and setting them to autopay.
- Link Scores: Your good credit is the key. By linking scores, your child can qualify for an amazing credit card by 18.
Actions speak louder than words! Your financial habits will sink into your child. Make sure they're good!
- Live Below Your Means: Set an example by demonstrating the power of saving. Live below your means to emphasize the importance of financial responsibility.
- Teach Financial Processes: Start having convos early with your kid about budgeting, saving, and investing. Educate them on the practical aspects of managing money.
- Lead by Example: Your financial habits will shape theirs. Be the role model they need to navigate the world of personal finance.
Setting your child up for financial success can be overwhelming, but remember, every small step counts. By following these simple yet powerful steps, you're laying the foundation for a future of financial prosperity for your child!!
Your commitment today will echo through generations. Here's to raising all the future rich people!
