How to create generational wealth for your kiddo!
Briefly before we left Los Angeles, we had a financial advisor. Although she ended up not doing everything she said she would, what she did do, was give me things I could do with Daenerys as she got older to build her wealth.
Most of these tips are for people who are comfortable making businesses. If you aren't comfortable (why is that?!). It's easy. Email me and I'll talk you through it (ashwebb1983@gmail.com)
1. The simplest thing is to make your kiddo a custodial mutual fund, etf, or stock account. I don't personally feel all that confident with making my own trades, so my daughter has an account at TD Ameritrade. For 5000, you can get a managed account, and we just add money to it as she gets it for her birthday, her lemonade stand, etc.
If you don't have $5000, you can open on with alot less, maybe on Stash or TD Ameritrade, you just have to make the trades yourself. Other companies may be managed accounts for cheaper, you can google to see what different sites are doing.
I was recently told about Loved.com. A site where you can make investments in your child's name to build up to a car, college, house, etc.
2. Guess what parents, you can hire your kiddo! Say what? And I don't mean a teenager. I mean a young child. Let's say you have a home based business. You can hire your child to clean or file or whatever, wash cars, mow the lawn as a lawn service. As hiring your child (must give them appropriate pay for that job), you are opening up a world to them in the form of they can now open an IRA. Nuts right? They can only put in what they earn. Then you as their boss, can match that amount. If this goes on, they will be slowly building up for their retirement or if it's a Roth IRA, they can take the money out, for whatever they need it, and they won't get taxed while they are young.
Here is a link that explains it better than I can:
https://www.nerdwallet.com/blog/investing/why-your-kid-needs-a-roth-ira/
https://www.investopedia.com/articles/personal-finance/110713/benefits-starting-ira-your-child.asp
3. Open a business for your child! I spent months trying to figure out how to teach Daenerys about money related to opening a business. She came up with her own idea. Open a Lemonade stand. We haven't made it official, but we plan to. It's another way that she can earn income, that I can put the money in a Roth IRA, and learn how businesses work without it being overly complicated. She has investors (me), she learns to buy her supplies, make her product, sell her product, at the end, we count out her profit, explain paying self back for expenses, and then donating 10% to charity. Eventually we'll get back to paying interest to investors.
4. Have your kiddo be part owner to your own business. My husband and I do real estate investing. You can have your child be an owner or an investor in your property. We plan on just having her be an investor and have her "sign" an investor agreement. It's easier than having her be an owner. That way she will get a certain percentage of the profit that is in the agreement. She'll be earning income that she can put into her Roth IRA, and be earning interest on her original amount.
Real Estate is an easy way to do this, but really she can make your kiddo a partner in any business.
Remember, that you can have one of your companies, own other companies (Parent company,child company), which is great if you need things like health care insurance and things like that.
The best thing you can do is talk to them, know they will make mistakes, that you will make mistakes, and know building wealth takes time, but the earlier they learn about money, the better off they will be. Be open to weird ideas, you never know in this world, what will take off.
Legalzoom.com is what we use most of the time to make businesses.
Let me know if you want more topics related to businesses or social media marketing.
Most of these tips are for people who are comfortable making businesses. If you aren't comfortable (why is that?!). It's easy. Email me and I'll talk you through it (ashwebb1983@gmail.com)
1. The simplest thing is to make your kiddo a custodial mutual fund, etf, or stock account. I don't personally feel all that confident with making my own trades, so my daughter has an account at TD Ameritrade. For 5000, you can get a managed account, and we just add money to it as she gets it for her birthday, her lemonade stand, etc.
If you don't have $5000, you can open on with alot less, maybe on Stash or TD Ameritrade, you just have to make the trades yourself. Other companies may be managed accounts for cheaper, you can google to see what different sites are doing.
I was recently told about Loved.com. A site where you can make investments in your child's name to build up to a car, college, house, etc.
2. Guess what parents, you can hire your kiddo! Say what? And I don't mean a teenager. I mean a young child. Let's say you have a home based business. You can hire your child to clean or file or whatever, wash cars, mow the lawn as a lawn service. As hiring your child (must give them appropriate pay for that job), you are opening up a world to them in the form of they can now open an IRA. Nuts right? They can only put in what they earn. Then you as their boss, can match that amount. If this goes on, they will be slowly building up for their retirement or if it's a Roth IRA, they can take the money out, for whatever they need it, and they won't get taxed while they are young.
Here is a link that explains it better than I can:
https://www.nerdwallet.com/blog/investing/why-your-kid-needs-a-roth-ira/
https://www.investopedia.com/articles/personal-finance/110713/benefits-starting-ira-your-child.asp
3. Open a business for your child! I spent months trying to figure out how to teach Daenerys about money related to opening a business. She came up with her own idea. Open a Lemonade stand. We haven't made it official, but we plan to. It's another way that she can earn income, that I can put the money in a Roth IRA, and learn how businesses work without it being overly complicated. She has investors (me), she learns to buy her supplies, make her product, sell her product, at the end, we count out her profit, explain paying self back for expenses, and then donating 10% to charity. Eventually we'll get back to paying interest to investors.
4. Have your kiddo be part owner to your own business. My husband and I do real estate investing. You can have your child be an owner or an investor in your property. We plan on just having her be an investor and have her "sign" an investor agreement. It's easier than having her be an owner. That way she will get a certain percentage of the profit that is in the agreement. She'll be earning income that she can put into her Roth IRA, and be earning interest on her original amount.
Real Estate is an easy way to do this, but really she can make your kiddo a partner in any business.
Remember, that you can have one of your companies, own other companies (Parent company,child company), which is great if you need things like health care insurance and things like that.
The best thing you can do is talk to them, know they will make mistakes, that you will make mistakes, and know building wealth takes time, but the earlier they learn about money, the better off they will be. Be open to weird ideas, you never know in this world, what will take off.
Legalzoom.com is what we use most of the time to make businesses.
Let me know if you want more topics related to businesses or social media marketing.
Thanks for sharing this Ashley! It's something I've been thinking about.. but also definitely felt that opening part about opening businesses "If you aren't comfortable (why is that?!)"
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