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How can I make my kid a millionaire? And do I want to?
How can I make my kid a millionaire? And is that the right thing to do? The math part of this may be easier than you think. Investing about $245 a month from birth through age 18 could potentially grow to nearly $1 million by age 50 (assuming a 7% annual return*). Also noting taxes you might be paying along the way. So if you have the money to put aside, starting early can really give your child an incredible head start. But there’s another decision to make: When do you want your child to actually know about AND control the money? Knowing a large financial cushion is waiting for them could influence some of the decisions they make growing up. And maybe not in a positive way. That should factor into how you save for them. For example, money contributed to an UTMA is a gift to your child that you can’t take back. Once they reach the applicable age under state law (usually 18 or 21), control of all that money transfers to them. Or you could invest in an account you own. You maintain more flexibility over when, why and how you eventually give them the money, although there may be higher tax consequences. There are several ways you could set this up, each with different tax, access and control considerations, so you’ll want to evaluate which approach makes the most sense for your family. Building wealth for your kids is one decision. Deciding when they’re ready for it is another. If you want help thinking through the options and how other families approach this, we’re happy to help. #FinancialPlanning #InvestingForKids #GenerationalWealth #WealthPlanning #Parents *Hypothetical example for illustrative purposes only. Assumes a 7% annual return; actual investment returns will vary and are not guaranteed.
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