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By the time my kids are in their 30s, they will be millionaires.
That’s because I’ve started investing for them in a custodial Roth IRA, which is a tax-advantaged investment account they can have access to when they’re of age. It could be 18 or 21 years old, depending on the state where the minor lives. Until then, the adult (aka me) maintains control of the account.
In 2020, I got divorced from my husband of seven years. I was forced to move back home with my four kids to live with my mother in Los Angeles, CA, and I was faced with the reality that their financial futures were ultimately in my hands and my hands alone. I had to do something.
I was always really good with money, and knew a good amount about investing. So when President Biden sent all Americans (under a certain income threshold) a $1,200 stimulus check as part of the COVID-19 relief package, I used it to invest in a business. I bought a ring light, an upgraded iPhone, a website domain, and launched my business Ellievated Coaching & Consulting, where I help new and aspiring entrepreneurs scale their business through digital marketing.
My company made its first $1 million in 10 months.
Now, I employ my kids (ages 7 and 5) and pay them anywhere from $250 to $500 per month to do tasks for my business like cleaning my office, organizing paperwork, and taking pictures. This allows my kids to claim earned income—a requirement for investing in a Roth IRA. The money may not be theirs now, but in the future it will help them tremendously, more than they’ll ever know.
You don’t need to be a 7-figure business owner or have a lot of money to start investing for your kids. With the right information and right investment steps and strategies, all parents can create generational wealth to pass on to their kids. Here’s how I did it.
You Don’t Need A Lot of Money to Start
If there’s one thing to know about investing, it’s understanding that time in the market is better than timing in the market. Meaning, the longer you let your money sit in the stock market, the longer it has to compound and build wealth. Once I realized this, it kickstarted my yearning to start investing for my kids while they’re still …….
Source: https://time.com/nextadvisor/investing/investing-for-kids-custodial-roth-ira/