GROWING YOUR FAMILY NEST EGG

Not sure how to manage your generational wealth?

Introducing our new “zillennial” finance expert—Haley Sacks, aka Mrs. Dow Jones—to keep you in check!

BY HALEY SACKS

There’s something fun about a rich baby. You know the type— they’re not wearing Baby Gap, they’re wearing Baby Fendi. Their first word is Bugatti. Their best friend is their nanny. But how did they get so rich? Well, because child labor laws are so restrictive, I’m guessing it’s not from building and then exiting a start-up. No, sweetie. These babies are rich because their parents were smart with money. They knew how to grow generational wealth.

What? Like, it’s hard? It’s not, and I can show you how! I’m Mrs. Dow Jones, the “zillennial” finance expert, and I’m going to teach you three secrets to growing generational wealth that only rich people know.

1take Advantage Of Compound Interest

Here’s the thing about kids. They’re young! That means they have a lot of time for their money to compound, which is “finance speak” for grow exponentially; think of how a snowball rolling down a hill gets bigger and bigger. That’s what happens to your money when it compounds. Even if you invest a small amount for them monthly, it will yield shockingly huge results over time.

For example, take my goddaughter Zia. When she was born and got her Social Security number, I pushed her parents to open a custodial brokerage account for her and had them use my secret recipe for making your kid rich. Here’s how it works: You put in $1,000 when the child is born, and then you set up automated deposits for $100 per month and contribute $500 per year on his birthday. If you do this for 18 years and invest that money in a low-cost index fund that tracks the S&P 500—which historically has returned 10 percent annually— it compounds annually, even if you don’t put a dollar more in once the child turns 18, by the time he is 65 it will have grown to $7.6 million. And you will only have contributed $31,600 of principal. 2

Get Your Kid A Black Card

I’ve said it once and I’ll say it again: Kids should have a black card! You’re so focused on teaching them to read and correcting their manners that you forget to add them as authorized users to your credit card. Yes, even if they just use it to teeth on, they’re still building credit. Here’s how this hack goes: Most credit-card companies don’t have an age requirement, so you can add your kids as authorized users on your account. They’ll send you a card with your child’s name on it (just put some recurring subscriptions on that card and set it to autopay so that it stays active) and boom, she is building credit. Continue doing this until the child has her own card. However, this hack works only if you have good credit. By doing this you’re linking scores, so your score has to be good in order for the child to benefit. Oh, and make sure to educate your kid on how to maintain this amazing credit score.

3 School Your Children In Finance

Guess what? Being rich isn’t about how much you make, but it’s about how much you keep and are therefore able to invest. You need to lead by example! Show your children how you live under your means and use whatever is left over to grow wealth. Engage them in the processes we’ve discussed about setting them up financially. Truly, if you want to raise a rich kid but aren’t building wealth yourself, it’s going to be tough. Kids pick up on everything. So if you want them to be good with money, you have to be good with money, too. Not only will they mimic your behaviors, but they’ll also look to you to guide them. Thankfully, I exist and can show you the ropes. Follow me on Instagram @mrsdowjones.

Then you can win every financial parenting award that exists! T