When I first became a parent, my daughter became my world. I wanted nothing more than to make sure she would be well off when she’s older.
Financial intelligence is crucial to learn. Unfortunately, it’s hardly taught in traditional education. And, with the way our economy fluctuates, it can be a scary thing to think about as a parent.
Check out these 4 strategies I’ve implemented with my 7-year-old that you can implement with your kids, too:
1. Paying her a salary of $12k through MY real estate business and deducting the expense
You read that correctly.
So long as your child’s work is legit, children under 18 can earn a $12k annual salary without income tax. For example, I have my daughter do due diligence on every property I consider purchasing. Not sure what I’d do without her at this point!
2. Making $100/mo. contributions to her Custodial Vanguard Account since the age of 2
You often hear the earlier you start the better. Well, I got my daughter started at 2 years old and her returns have been compounding ever since. Every month we review her portfolio together and review returns.
3.Using her salary to fund her ROTH IRA
As an “employee” with earned income, I set up a Roth IRA for my daughter and contribute the maximum amount. The funds are invested and growing tax-free. Contributions are made with after-tax monies, so distributions are not taxed when taken.
4. Adding her as an authorized credit card user to help her get a high credit score.
By the time my daughter is 18, she’ll have a long standing credit history and several investment accounts to her name. Ultimately, she’ll have a solid foundation to build upon and these strategies were quick and easy to set up.
These are just some of the many unique life hacks and strategies we’ve been talking about inside Inner Circle.
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