Long before Richie Rich gave kids the idea of becoming a millionaire young people were making it big by starting their own business. But you don’t have to be a lucky entrepreneur to be a kid millionaire-in-the-making. With these seven steps and some self-control, you could be the world’s next kid millionaire.
- Be your own financial goalie.
Think of goals like the stepping stones on your path to riches. And it all starts with setting short-, medium-, and long-term goals. An example plan could be to make $50 per week, save $50 per month, and invest $200 per year. Or, keep it simple with a straightforward goal like banking $100 in your savings account. When you’ve reached your first goal, set another one.
- Build a budget.
No amount of income will become a fortune if you spend every dime. So before you take another step, build a budget. Our previous post provides step-by-step instructions, including listing your income and expenses, having weekly check-ins, and making adjustments as needed.
- Make some moolah.
For most kids, this one feels like the biggest hurdle. How can you make money when you can’t drive, and can’t legally sign your name? There’s plenty of options beyond just an allowance — from more chores around the house, and helping out the neighbors, to the occasional lemonade stand, or starting their own business….kids can and do make money if they’re motivated and willing to work up a sweat.
- Laugh all the way to the bank (a real one). If your savings account has an uncanny resemblance to your bedroom mattress or jacket pocket, it may be time to get a real savings account. Visit your local bank or credit union and ask about special accounts for kids. They may have fee-free options for the aspiring money-maven, or special perks for teen tycoons.
- Grow your dough.
What’s better than a pile of cash that doesn’t lose a cent in value? One with value that increases over time. Yes, kids can invest just like adults. Stocks, bonds, mutual funds, and even commodities like pork bellies and corn. But you’ll need an adult to open what’s called a “custodial account.” Or, start with simple apps that do the investing for you based on the level of risk that you’re comfortable with, like Stash or Wealthsimple.
- Hack the power of compound interest.
If there’s one category where kids have a major advantage against adults, it’s the power of compound interest. If you invest early and earn an average of 7-10% interest over time, compound interest can turn a modest amount of money into a million bucks. But it requires saving early and often, and watching your investments to make sure they earn enough interest. Isn’t it great to be young.
- Don’t do dumb stuff.
All the right moves can quickly be erased with a single foolish decision. People who fail to make a plan, budget, and save don’t become millionaires. Even some of the world’s most famous faces have let poor money management erase their fortunes. If you do make a mistake, get right back on track. The world is full of wealthy people who made mistakes but didn’t quit and came back to be financially successful.
check out the book for more financial tips!
About the Book:
From the creators of Biz Kid$ and Bill Nye the Science Guy, here is a comprehensive guide for kids to the basics of earning, saving, spending, and investing money. Written in a humorous but informative voice that engages young readers, it’s the book that every parent who wants to raise financially savvy and unspoiled children should buy for their kids. It is packed with lively illustrations to make difficult concepts easy to understand—all as a way of building financial literacy, good decision-making, and the appreciation of a hard-earned dollar