3 Strategies to Invest with Your Kids
/I trust that this day finds you well, and if you’re preparing for the Passover or Easter holidays this coming weekend, my hope is that it is celebratory for you.
Since we’re in the thick of Financial Literacy Month, I want to share a few resources for your kids or other kids that you know. Building generational wealth must include the passing down of knowledge and experiences so that children have the tools and resources to go after their dreams without restraint.
Here are several options for teaching your kids about investing and having fun in the process:
Get your child a custody account.
One of the best ways to teach your kids about investing is to have an account dedicated specifically for them. The assets are actually the property of the child. This type of account, established under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA), is set up by an adult for the benefit of a minor. In some states a custodian can specify the age—18, 21, or even older—when the child will take control of the account (also called the "age of majority"). Once the account is opened, it can provide an opportunity to teach some basic investing skills. You might talk about goals and discuss investment choices, review account statements, and discuss gains and losses. Here is a comparison snapshot of the brokerage accounts where you can open a custody account that works for your family.
Use a kid-friendly investing app.
These days, you know that there are many apps for kids to easily learn about investing and the stock market. I am particularly drawn to Stockpile and Acorns. Now, you still have to set up a custody account for your child if he or she is going to make their own trades with parental approval, but the interface on these apps is teen-friendly and makes learning very easy. And some accounts, like those offered through Greenlight, come with the added bonus feature of a debit card that will allow you to teach your child principles around saving and spending as well.
Build a wealth circle with the kids.
I’ve talked at length about the benefit of a wealth circle through my book, A Wealthy Girl: 7 Steps to Prosperity, Peace, and Personal Power, wherein you gather with a trusted network of individuals to reach your wealth goals together. That said, you can also use the wealth circle as a means of sharing valuable lessons with your children. Invite the kids into your meetings, see what they are interested in talking about, and make room to educate each other. You’ll be surprised by the questions they ask, the knowledge they may already possess, and the ways in which they will simply pick up some of the concepts just by listening to the conversation. You can start building a solid foundation by helping kids.
A Wealthy Girl Corner
My parents shared a lot with me about how they felt about money. Specifically, I remember them saying:
“Charisse, we want to make investments in your future so that you can have opportunities that we never had.”
The statement sticks with me to this day because they reframed expenses, such as my college tuition costs and the costs for our family trips, into ‘investments into my future.” An investment implies that they expected a return on their spent dollars. Well, that education has returned multiple times over and those family trips have created lifelong memories that cannot be purchased even if one tried.
