Wed Oct 02 2024, by Tyler Gardner

Six Effective Strategies to Make Your Child Financially Wealthy

Here are the six ways that I'm going to make my child as wealthy as possible with as little as possible. I'm Tyler, a former financial advisor and portfolio manager, and I create financial content for free so you don't have to pay for it.

1. Open a Custodial Roth IRA

When my child is born, I will open a custodial Roth IRA in their name, even though I know I won't contribute to it until they have legitimate earned income.

2. Establish Earned Income Early

When my child is about eight or nine, I'll find a way to get them legitimate earned income. They can help me with my small business tasks, provided the work is safe, age-appropriate, and they're paid a fair rate.

3. Fund the Roth IRA

I would immediately fund the custodial Roth with that earned income and invest it in a low-cost index fund.

4. Teach Investment Fundamentals

When my child turns 12 or 13, I would begin to teach them about investing, explaining why it is important and what this account could end up doing for them.

5. Encourage Part-time Jobs

At ages 15 or 16, I would encourage them to get another job, like lifeguarding or babysitting, and I would match dollar for dollar everything they put into that Roth, knowing that every dollar we put in at that age will be worth about $40 in retirement.

6. Let the Money Grow

At the age of majority, I'd say goodbye to my child as they head off to school and to that account. I'd hope that they would let that money grow, ensuring they never have to worry about a happy and healthy retirement.

If any of this is helpful, like and follow, and I’ll keep trying to get you and your child one step closer to where you all need to be.

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