How To Invest Your Kid’s Money If You’re Not an Investor

How To Invest Your Kid’s Money If You’re Not an Investor:
The Best Accounts and Tools to Use Right Now

Do you ever think to yourself, “I know I should be investing and growing money for my kid, but how?! Where do I start?!”
Well, you are not alone.
Everyone wants to create a bright future for their kids but when it comes to money, if you aren’t doing so great with it yourself, how in the world are you supposed to get it right for your kids?
You don’t know what you don’t know and while the world of finance and investing can feel very confusing and overwhelming, it doesn’t HAVE to be that complicated.
Don’t get me wrong, things can get confusing really quick with trusts, IRAs, College Funds, and all the other options out there but they don’t have to be so difficult. Below, we’ll discuss a couple of SUPER easy options for you to get started growing your kid’s money right away and from there you can make it as complicated as you see fit!

Please note I am not a financial advisor and I do not have any type of finance degree. I simply want to share with you what we are utilizing in our family right now in case you would like to do the same.

Steps to Take:

1. JUST GET STARTED!!
Don’t hesitate because sometimes, tomorrow never comes! Get that money working for those kids ASAP. The longer money is at work, earning interest, the larger it will become. One key takeaway here is that the TIME that money is invested, even if it’s just a little bit of money, is more important than how often it is contributed to. Here is a case study courtesy of Chat GPT:

Case Study: The Power of Compound Interest

Meet Sarah and John.

Sarah put $5,000 into an investment account at the age of 25 and contributed $200 each month. She chose investments with an average annual return of 8%.

John, on the other hand, delayed his investing until he was 35. He also invested $5,000 initially but contributed $300 each month. He chose investments with the same average annual return of 8%.

Let's fast forward to when they both turned 65:

• Sarah's investments grew to an impressive $1,073,527.58.

• John's investments, despite contributing more each month, only reached $759,143.77.

Even though Sarah contributed less each month and started investing earlier, she ended up with a significantly larger sum due to the power of compound interest. By allowing her investments to grow over time, Sarah maximized her returns and secured a more substantial nest egg for her retirement.

2. Pick one or two things to get funded NOW.
The options for savings and investing are vast. You can get IRAs, savings accounts, college funds, CDs, brokerage accounts and on and on. But what if you don’t know what to start with? What if you would love to get started on saving and investing for your kid but you get analysis paralysis when you start digging in? Well, if you are like me, you want the process to be simple, easy and automated if possible!

Two of my favorite options:
 
A. Open a high-interest savings account for your kiddo. Most of them do not have a minimum balance, you can automate contributions to the account, and best of all, they can pay 4-5% interest currently. Most of the accounts that pay this high of a rate, that I have found, are online. A quick Google search of high-interest savings accounts can help guide you but you can also get a list of good options here: https://tinyurl.com/bdd7z5df.

B. Open a debit card for your kid. I know at first this sounds counter-intuitive but hear me out. There is a wonderful debit card that our family personally uses called GreenLight. GreenLight is a company that offers debit cards for kids but it doesn’t stop there. Greenlight has savings accounts, allowance capabilities, multiple account options (for giving, gifts, trips, etc.), and best of all they have an investing option. There is even a game that kids can play that teaches them about investing.
Here’s how my family uses GreenLight - Every week, we make a contribution to each kid’s debit card. That contribution is automatically split into spending, saving, giving, and investing. Then, an automated purchase of a broad-market index fund is made, and BAM! - saving AND investing are done on autopilot AND, because we look at it and discuss it regularly, my kids are learning about money and investing, while watching their cash grow.
Please note here that the weekly contribution is not big. We are talking less than $20 per week per kid.
Want to try GreenLight for yourself?
https://share.greenlight.com/144924525

3. Look into further options and speak with an advisor or banker about other money and investing tactics for your kids. 
College funds, annuities, CDs, or even an IRA may be a great option, possibly even a better option than the ones you have already put in place. However, they take a little more effort to set up. Because of that, my theory is to get that money working right away and then go back and edit or change as necessary as you gain knowledge and guidance on the subject. And definitely get more knowledge and guidance!

That’s it, my friends!

Just get started! The sooner you put those dollars to work, the bigger the amount will be for your kids.

One last thing - it’s not our intention here at Wealthy Kids Academy to save and invest for our kids so that they don’t have to work as adults. Or, so that they get to party on a yacht and eat bonbons their entire adult life. In fact, quite the opposite. It’s our belief that having money to start life with just gives a person options. Options for college, buying or starting a business, getting into a career that you may love but doesn’t pay a ton; or even a chance to spend more time as a philanthropist instead of an employee.
Whatever the desire is, starting with more than zero always makes things a little easier and that’s simply all we’re going for here.

So, here’s to peace, growth, and options!

Signed,
Amanda
Founder, Wealthy Kids Academy