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Millennial Money: Get kids set to invest with these accounts – Arizona Daily Star

By ELIZABETH AYOOLA of NerdWallet

During my late teens, my mom handed me two worn, blue passport-size books with details of my custodial investment accounts. I had no clue what to do with…….

During my late teens, my mom handed me two worn, blue passport-size books with details of my custodial investment accounts. I had no clue what to do with them, but it didn’t matter, because the accounts were empty anyway. Perhaps for the best, because I’m almost certain my assets wouldn’t have stood a chance.

I am now a mother, have opened a custodial account for my 4-year-old son, and often think about how I can prepare him to take control of his investments in the future. If you’re looking for ways to prep your child for investing, an experienced parent and financial experts have some ideas.

Preparation begins as early as possible when it comes to teaching your kids about money, says Cristina Livadary, a certified financial planner and co-founder of Mana Financial Life Design in Marina Del Rey, California. No matter your child’s age, you can start by talking openly about finances and sharing your values around money.

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Something I’ve started doing with my son is teaching him the value of giving, by encouraging him to give toys away before buying new ones. An approach Livadary recommends to teach money values is assigning what she refers to as a “job description” to each dollar you give your kids.

“One of my favorite things is taking the dollars and really splitting them up in ways that are really aligned to values,” says Livadary. “So, let’s say you get $3 a week — $1 for giving, another dollar is for saving, and the other dollar you get to spend.”

A custodial brokerage account is an investing account opened by a parent or guardian for a minor until they reach the age of majority.

If your child has a job with taxable income, you could also help them open a custodial IRA or Roth IRA.

A good thing about custodial accounts is that although kids don’t control the accounts until they reach the age of majority, you can show them what’s happening.

Michael Costello , a retired consumer products executive based in Miami, and a parent of three, says he prepared his now-grown kids to manage their custodial accounts by teaching them about budgeting and saving early. He also let them view their investment accounts and watch them grow, and he facilitated investing discussions with them.

“We ended up having a lot of conversations about why do you do long-term holding? What should you look at? What are ETFs versus regular stocks? What …….

Source: https://tucson.com/lifestyles/millennial-money-get-kids-set-to-invest-with-these-accounts/article_98a03a89-cf70-5396-a8fd-3330651f239b.html

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