Make Your Kid A Millionaire

By Amy Bell | June 08, 2010 AAA
Make Your Kid A Millionaire

Who wants their kid to be a millionaire? We don't need Meredith Vieira to tell us every parent hopes their kid will hit it big in the money department. After all, we want our kids to be happy and have everything they want, and it wouldn't hurt to make sure our kids have plenty of money to support us in our golden years.

IN PICTURES: 6 Millionaire Traits That You Can Adopt

Fortunately, it's never too early to start grooming your little millionaire-to-be. From the time he utters "Da-Da" and takes his first clumsy steps, you can start teaching him some important lessons that will put him on the fast track to millionaire status. Here are a few tips to help you on your quest in raising a millionaire.

Junior, Meet Money
It's never too early to start teaching your children about money management. (Okay, if she's still sleeping in a bassinet and hasn't quite mastered head control, it may be a little early.) Teach your preschooler about money by showing her how you use the green stuff make every day purchases. When you're paying the cashier at the grocery store, explain that you are giving the store money in exchange for the items in your cart.

Once your little urchin learns how to count, you can really get down to business. Help her tally up the coins in her money bank and discuss how much more she needs to buy that much sought-after Zhu Zhu Pet. When your kid is a preteen, show him how you balance the checkbook, pay the bills and deposit checks at the bank. Once she's in high school, talk to her about your investments and check your IRA or 401(k) statement together. Your kiddo may not fully understand all the specifics right now, but these exercises could plant those first financial seeds.

Encourage Free-Thinking
Do you think Bill Gates' parents ever told him to stop daydreaming about that silly computer mess he was always jabbering about at the dinner table? Probably not. The most successful entrepreneurs started off as super-creative, free-thinking kids - and most of them needed the support and encouragement of their parents to hit the big time.

Research shows that most children start to exhibit entrepreneurial traits, including risk-taking, problem-solving abilities and a powerful drive to succeed, at a very young age. Unfortunately, many of these kids lose that capitalist spirit by the time they graduate from high school. (Becoming a millionaire is not as hard as you might think - it just takes time. Learn more in 6 Simple Steps To $1 Million.)

It's your job to stoke your child's entrepreneurial fire and encourage him to think freely and creatively. Don't squash your child's seemingly harebrained ideas - your youngster's "ridiculous" dreams could end up earning him a fortune. So nurture that entrepreneurial spirit, and teach your kid the harder she works, the higher she'll climb.

Focus On Their Strongest Talents
As my Dad used to say, don't try to fit a square peg in a round hole. In other words, your kid will never reach millionaire status if you force him to be something he's not. That's why it's important to pinpoint your child's forte and focus on that.

Let's say Susie is clearly a math whiz, and little Johnny can paint like there's no tomorrow. Maybe Joe Jr. isn't the best singer, but boy can he build some elaborate contraptions with his Legos. Figure out your child's strongest talent and which activities make her happiest. After all, if the passion isn't there, they'll never stick with it.

Work It, Baby
If you want your little one to be the next Oprah, make her work for that weekly allowance. Don't just hand over that wad of cash because she's your little angel. If you follow that route, your kid will never learn the skills to pay the bills. (These three principles apply to all financial decisions, making your money talk with your kids simple and effective. Learn more in The Only 3 Money Lessons Your Kids Need.)

Just ask Troy Dunn, father of seven and author of "Young Bucks: How to Raise a Future Millionaire." He says parents of would-be millionaires should follow the "dollar-and-a-dream" approach. In other words, if your preteen claims she'll just die if she doesn't get those Justin Bieber tickets, don't immediately hand them over - make her work for it. Tell her if she really wants to see that mop-topped tween idol in concert, she'd better get busy mowing the lawn, scrubbing the toilets and bathing Fido.

Give Him a Head Start
Want to give your kiddo a financial head start on his path to millionaire-hood? If you've got the cash, you may consider making a small monthly contribution to an IRA in his name. When it comes to retirement accounts, the sooner you start investing, the bigger the nest egg grows. So just think of what would happen if you started investing in your child's IRA from the day of her birth.

Here's an example: if you contributed $100 a month from the day your child is born until her 18th birthday, her retirement account will mushroom to a cool $1 million by the time she's 65 (assuming a 7% average annual growth). Assuming an 8% growth rate, you would only need to contribute $56 a month. Not too shabby. (There are many ways to hit the million-dollar mark, but the faster you try to get there, the harder it becomes. Check out So You Wanna Be A Millionaire: How Long Will It Take?)

Move Over, Bill Gates
If you make all the right moves, you may just be the proud parent of the next J.K. Rowling, Sergey Brin or Donald Trump (with much better hair, of course). With a little bit of encouragement, lots of love and plenty of financial advice, you can put your kid on the road to riches.

Catch up on the latest financial news in Water Cooler Finance: Buffett Speaks Up, AIG Deal Collapses.

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