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So how can you ensure your children become the exception?
What money moves do proactiveself-made millionairesteach their children to achieve their own wealth early?
Consider these ideas as you start talking with your children moreabout money.
Talk About Money Strategically
The rich talk about money.
They arent encumbered by some vague money taboo.
But rather than trying to show off or brag, they talk about financial strategies.
Acknowledge the emotions and feelings around money because they shape how our children view money.
This will foster a better relationship with money as they grow up and enable habits that will stick.
This foundation will do wonders.
Start With Your Target Savings Rate
Youve heard it before: start with the end in mind.
My dad always counseled me to save 20% of everything I earned, and I did.
In the long run, financial success comes down to discipline.
Model Realistic Budgets With Expenses
Does giving your children an allowance teach them how to budget?
Quite the opposite it teaches them that 100% of every paycheck can go toward discretionary spending.
In the real world, adults have mandatory expenses like housing and utilities, transportation and groceries.
Failure to pay on time results insome practical penalty.
Incorporate practical exercises and recommend budgeting tips as they grow up, suggested Garcia Cisneros.
Teach them some simple bucketing or envelope methods that are more digestible.
Include them when you are running your own bills, buying a car or donating money.
Involve your kids in financial thought exercises so they become normal.
The goal is for exposure.
Invest Through a Roth IRA
Roth IRA contributions dont come with any immediate tax benefit.
You dont get a tax deduction you invest with after-tax dollars.
Butteenagers and young adultsin college often dont pay any income taxes anyway.
They fall in the 0% income bracket.
And when your money has many decades to compound, small contributions balloon into gigantic portfolios.
Perhaps your children have part-time jobs in high school.
There isno minimum dollar amount.
Contribute, invest and let the power of compounding take over.
As a parent, perhaps you consider matching their contribution as an incentive if its needed.
Start early to get the benefits of compound interest.
They can also earn income from investments and other passive sources.
Many people dont learn that lesson until well into adulthood.
When you could cover your living expenses with passive income from investments or businesses, work becomes optional.
Its just as true for 30-year-olds as it is for 65-year-olds.
Final Thoughts
Talk to your kids about money early and often.
And theres always more to learn.
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