This week, we’ve got another viewer question for our Moneyman, Paul Fain – president of Asset Planning Corporation. Wayne asks: “How can parents give their children a solid foundation in lifelong saving and investing?”
PAUL, WAYNE RAISES A GOOD POINT, PARENTS ARE SUPPOSED TO TEACH LIFE LESSONS…
He does: “we teach our kids so many critical skills and lessons (NOT TO DRINK POISON FROM UNDER THE SINK, FOR EXAMPLE). So, why don’t we teach them how to save?”
- Don’t do drugs.
- Get good grades.
- Eat healthy and exercise.
SO WHERE IS THE BREAKDOWN IN MOST FAMILIES? WHY AREN’T MORE PARENTS TEACHING THEIR CHILDREN ABOUT SAVING AND INVESTING?
- Lack of knowledge: it is hard to teach saving if you don’t do it yourself. (We are role models).
- Fear: fear of looking incompetent to our children. (Shame if bad money managers).
HOW CAN PARENTS DO A BETTER JOB OF TEACHING FINANCIAL FITNESS, AND WHEN SHOULD THEY START?
- Start early! When a child yells, “Mine!”
- Delayed gratification (Wayne notes that many teens get a new cell phone every 1-2 years)
- Set goals
- Save part of all income
- Harness the magic of compounding
FAST MARKET FACT: The Power of Compounding
Save $20 per month for 10 years
- 7% annual return = $3,462
- 10% annual return = $4,097
QUESTION FOR OUR MONEYMAN?
Send them to Paul@assetplanningcorp.com!
You can also reach Paul by using the contact page on APC’s website.
