We want our kids to learn money doesn’t grow on trees, that if they lose another pair of school shoes they are not easily replaced and that if they save some of their earnings their money will grow and give them increased wealth for their future.
From the time your child utters “Da-Da” and takes his/her first clumsy steps, you can start teaching them some important lessons that will put them on the fast track to millionaire status. Here are a few tips to help you on your quest in raising a millionaire.
Baby, say hello to money:
Find out what your children want to buy. Then help them think about ways they can earn pocket money and save for the item: toys and games if they are young, books, movies or a special event if they are older. When you’re paying the cashier at the grocery store, explain that you are giving the store money in exchange for the items in your cart.
Once your kid is a preteen, show them how you balance the checkbook, pay the bills and deposit checks at the bank. Once they are in high school, talk to them about your investments and check your superannuation statement together. Your kiddo may not fully understand all the specifics right now, but these exercises could plant those first financial seeds.
Let them breathe:
Do you think Bill Gates’ parents ever told him to stop daydreaming about that silly computer mess he was always jabbering about at the dinner table? Probably not. The most successful entrepreneurs started off as super-creative, free-thinking kids – and most of them needed the support and encouragement of their parents to hit the big time.
Research shows that most children start to exhibit entrepreneurial traits, including risk-taking, problem-solving abilities and a powerful drive to succeed, at a very young age. Unfortunately, many of these kids lose that capitalist spirit by the time they graduate from high school. That is why you have to stay on and encourage them to excel in what they are good at and are most happy in.
Encourage their strong suits:
Don’t try to fit a square peg in a round hole. In other words, your kids will never reach millionaire status if you force them to be something they are not. That’s why it’s important to pinpoint your child’s forte and focus on that.
Figure out your child’s strongest talent and which activities make them happiest. After all, if the passion isn’t there, they’ll never stick with it.
Eye on the prize:
If you want your little one to be the next Oprah, make her work for that weekly pocket money. Don’t just hand over that wad of cash because she’s your little angel. If you follow that route, your kid will never learn the skills to pay the bills.
Just ask Troy Dunn, father of seven and author of Young Bucks: How to Raise a Future Millionaire. He says parents of would-be millionaires should follow the “dollar-and-a-dream” approach. In other words, if your preteen claims she’ll just die if she doesn’t get those Justin Bieber tickets, don’t immediately hand them over – make her work for it. Tell her if she really wants to see that mop-topped tween idol in concert, she’d better get busy mowing the lawn, scrubbing the toilets and bathing Chino.
Encourage your children to stay on track by offering to add to their savings if they achieve a particular savings goal.
Give them a head start
Want to give your son or daughter a financial head start on their path to millionaire-hood? If you’ve got the cash, you may consider making a small monthly contribution to a savings account in their name. When it comes to investment accounts, the sooner you start investing, the bigger the nest egg grows. If your childs first savings experience is good they will be more likely to repeat it. So just think of what would happen if you started investing in your child’s future from the day of her birth.
Here’s an example: if you contributed $100 a month from the day your child is born until her 18th birthday, her savings account will mushroom to a cool $1 million by the time she’s 65 (assuming a 7% average annual growth). Assuming an 8% growth rate, you would only need to contribute $56 a month. Not too shabby.
Move Over, Mark Zuckerberg
If you make all the right moves, you may just be the proud parent of the next J.K. Rowling or Donald Trump (with much better hair, of course). With a little bit of encouragement, lots of love and plenty of financial advice, you can put your kid on the road to riches.