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How To Build Generational Wealth: 5 Strategies To Help Your Kids Become Millionaires!
461 Plays5 hours ago
🏦 How Parents Can Help Kids Build Wealth: 5 Proven Strategies
💡 Want to ensure your children achieve financial success and independence? This episode provides actionable steps for teaching kids about money and helping them build wealth early. From custodial Roth IRAs to strategic gifting and financial education, we explore how parents can play a pivotal role in creating a strong financial foundation for their kids.
Watch and Subscribe on YouTube
In this episode, we discuss:
1️⃣ Investing for Kids: How parents can start early with custodial accounts.
2️⃣ Custodial Roth IRAs: A powerful wealth-building tool for young earners.
3️⃣ Financial Education: Teaching compound interest and smart spending habits.
4️⃣ Encouraging Work Ethic: Guiding teens to value earning and saving.
5️⃣ Wealth Transfer Tips: How to gift wealth responsibly while instilling financial values.
🔗 David’s Links:
📈 Help Your Kids Build Wealth and Become Millionaires by 40
⚠️ Die With Zero by Bill Perkins? Millionaires Only, Please!
🍏 Forget About Money on Apple Podcasts
🎧 Forget About Money on Spotify
📝 Episode Highlights:
🟠 Helping Kids Build Wealth: Actionable steps for parents.
🔄 Custodial Roth IRAs: How they secure a strong financial future.
🏠 Teaching Financial Independence: Habits kids can carry for life.
📈 The Magic of Compound Interest: Growing wealth with time.
💰 Responsible Wealth Transfer: How to guide young adults toward financial success.
#millionaire #generationalwealth #teachingkidsaboutmoney
🎧 Listen & Subscribe: Join us for more episodes exploring financial independence, parenting strategies for wealth-building, and actionable advice for young professionals. Don’t forget to hit subscribe and tap the bell 🔔 to stay updated!
📜 Disclaimer: This podcast is for entertainment and informational purposes only and does not constitute financial advice. Always consult a qualified financial advisor before making major financial decisions.
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Transcript
Smart Money Management for Kids
00:00:00
Speaker
As parents, we want the best for our children to see them thrive, achieve their potential, and become responsible, successful adults. A significant part of this involves teaching them smart money management. While I believe anyone can become financially independent on their own without help, it always helps to have somebody that pulls you to success. In this episode, we share five ways parents can help their kids be millionaires. Carla, did your parents help you become a millionaire?
00:00:30
Speaker
Not directly, but they certainly supported me in a lot of the ways that I think we are going to talk about today. Did your parents help you become millionaires? A millionaire?
00:00:41
Speaker
not by contributions towards my financial accounts, but perhaps in a way they did by either being good role models for money or not such good role models for money. So I think many people probably have that situation where their parents are one way or another, or maybe both. Maybe you have one parent who's really good with money and another parent who isn't as good with money, but I think you can learn from both and you just got to figure out what you want for yourself and then shape your habits in order to get the best outcome for yourself.
00:01:11
Speaker
Absolutely. Your parents are your first and biggest role models in life and you can learn a lot from them in either direction. Either this is the way I don't want to go or yeah, that's a really awesome model that I want to follow.
Celebrities and Wealth Transition
00:01:23
Speaker
So I thought it would be fun to take a peek into the lives of some celebrities.
00:01:29
Speaker
who could easily on any given day help their kids become millionaires by just dumping giant piles of cash on them because they have giant piles of cash sitting around. But there are a lot of those very wealthy celebrities who have said publicly, I'm not going to do that. I think kids need to make their own way in the world and I'm not passing on my wealth to them. When I'm gone, everything is going to some sort of charity instead of just going directly to my kids.
00:01:56
Speaker
So I pulled a few celebrity quotes that I thought would be interesting for folks to hear about. So Jeff Goldblum has said that children should make their own way in life. And his quote was, got to row your own boat. Like, I'm not your meal ticket. I'm not just going to pave the way for you. You got to make things happen. Warren Buffett, I think is probably one of the most famous examples. He has been very public about not wanting to just pass all of his money.
00:02:23
Speaker
on to his kids. And it is a lot of money. Warren Buffett's net worth is hovering like over $100 billion. dollars So we're talking about a lot of cash here. However, there are some caveats to a lot of these statements that wealthy celebrities have made. And Buffett is no exception. He has said, well, I'm not going to give my kids my money. It's all going to charity. But I am giving over $2 billion dollars to the philanthropic philanthropic organizations that my kids run." That's what he said. So, no, he's not giving the money directly to his kids, but he's basically providing them with a job for life, right? You are not going to get fired from the nonprofit that you run or like play a significant role in.
00:03:10
Speaker
If dad was the one who like created the whole thing in the first place, they're very well-funded. it Sting is another fun example of this, I think. So Sting's net worth, this blew my mind. Well, let me just ask you, how much do you think Sting is worth? A lot, especially especially after that PDD contract where he had to get he has to get paid. I heard like $2,000 a day just for one song recorded in the 90s that he sampled from. I would guess. Yeah. Give me a number. Give me a number. 380 million.
00:03:38
Speaker
550 according to this website, I will say like, you got to take all these things with a grain of salt, right? But that's a big chunk of cash for Sting to be sitting on. So what Sting has said is quote, obviously, if they were in trouble, I would help them, but I've never really had to do that. And I really appreciate that. So Sting is another one who falls into the category of like,
00:03:59
Speaker
They have a safety net under them, but I'm just not going to pass all my wealth on to these kids. Ashton Kutcher is another one who said something similar. And then this Elton John quote I thought was especially interesting. So Elton John is worth about $500 million, dollars less than staying. That blows my mind. But he has said, of course, I want my boys in a very sound financial state.
00:04:20
Speaker
But it's terrible to give kids a silver spoon. It ruins their life. So some strong opinions there. So I think these are just some interesting perspectives to consider about if you are not Elton John or Sting or Warren Buffett, you probably we aren't sitting on hundreds of millions of dollars or billions of dollars.
00:04:39
Speaker
But maybe you have major way up in the world. Maybe you are making your way up in the world right now and you're thinking about how to leave money to your kids. I think these are just some interesting perspectives to consider from people who are like way high up on the mountain of financial success. So I don't know what are your thoughts on these perspectives, David?
00:04:59
Speaker
I think it's interesting and and entertaining to hear thoughts about celebrities who maybe they started out with not a lot of money and through their hard work and hard effort amassed either a small or a large fortune.
Beyond Money: Happiness and Parenting
00:05:12
Speaker
So I think it's interesting to hear their perspectives on how they think about money, but it's also interesting where the parenting overlaps.
00:05:20
Speaker
because we want what's best for our kids and we understand that money, it's so money alone does not make you happy. We want our kids to be happy. So i maybe i'll if I was going to push back on any of these celebrities and say, okay, well, how ah what have you done to build happiness for your kids outside of the money conversation? What kind of parenting techniques did you use to help your kids grow into solid adults? And maybe money management is one of those, but I would like to have that bigger conversation.
00:05:49
Speaker
Yeah, I think that will be very helpful to all of us who are not born buffet or staying. I think these are questions that parents wrestle with. And even though I'm not a parent, I certainly have kids in my life that I care about. So I think these are interesting questions to ponder.
00:06:08
Speaker
And I think sort of an overarching assumption that we are making in today's discussion is that you are taking care of yourself financially because I do think the best thing you can do as a parent is not be a financial burden to your kids, either when you're they're young or as they grow into adulthood, knowing that mom and dad are okay and you don't have to send them a check every month is really powerful. That's a way of supporting your kids in an extremely big way. So I think that's an important caveat to make here is don't set your kid up for financial success while you are kind of circling the financial drain yourself because that's just setting everybody up for failure.
00:06:54
Speaker
So the purpose of this conversation is to just share some ways that if you're in a situation where you feel you're on track already financially and you are in a position to then want to help your children in some way, here are just five ideas that we've come up with. Some of them I've used, some of them I plan to use, but I think all of them are valuable to consider at different stages and for different reasons. Everybody's family situation is extremely unique.
00:07:22
Speaker
This is not a declaration of you should or shouldn't help your kids with money. This is not a morality discussion on you're not a good parent if you don't or you're not a good parent if you do. That's not what this is. This is if you're squared away financially and you have the means and the desire to help your kids achieve millionaire status, which who knows by the time our kids are 30 years old, that's probably not going to mean a whole lot, but it's going to be better than zero. Absolutely. we know but let Let's get it started, Carla.
Investing Early for Financial Success
00:07:52
Speaker
All right, so I think the first strategy that you can take is to just invest for your children. This means putting money directly into an account that has their name on it. So this is something that you're not going to touch. It will belong to them. And as they become adults, they will have this money available to them. This is just one example of if a parent wanted to set their kid up to be a millionaire by age 30, that would require investing $671 per month from the month that the baby is born all the way until the month that the kid turns 30 years old.
00:08:35
Speaker
So at an 8% interest rate, that is going to turn into pretty much dead on a million dollars as they turn 30. That's a pretty nice 30th birthday present to give your kid, but $671 a month is a very major commitment every single month for 30 years. So again, we're just putting this out. There's one possibility that parents could consider if this is a goal for them, but that is the number that it would take. So what are your thoughts on setting your kid up with that kind of contribution to a brokerage account, David? I think that's what we understand the power of compound interest or compounding. And this takes full advantage of that to the best that you can unless you start investing for your kid before, which maybe like you have if you're if you're that on top of it. So it definitely takes care of compound interest. so you're in a much better situation contributing anything at that early stages than nothing, or even waiting and contributing a larger sum later. You have to run your own math, but there's a lot of computations out there that indicate if you contribute smaller amounts earlier, they grow over time to be much, much larger amounts later than if you, you know, wait till your two thirds mark through that time period and then start contributing. Well, now you're contributing,
00:09:51
Speaker
a whole lot more money and you may not even get, you would have to contribute a whole lot of more money and then you still might not get to that desired $1 million dollars at 30 years old. Take advantage of the power of compound interest. It really, really matters.
00:10:08
Speaker
And if you can't do the whole amount, that's okay. We were just throwing numbers out there. So you have some kind of framework, but if you can do half that, or even just a hundred dollars or $200, whatever you can do, I don't think you're going to, when the child turns 21 or 26 or 30, I don't think you can be like, well, you know, I really wish I wouldn't have started that $100 contribution so long ago. I think you'd be very surprised at what your balance is.
00:10:32
Speaker
Yeah, I will note that if you want to do it as just one lump sum, like the day your kid is born, it would take $100,000 to just put one lump sum in and never have to touch it again, never have to make additional contributions. And over the course of 30 years, that would turn into a million dollars at 8%. So I think the monthly contributions is more palatable for most people instead of parting with 100K on the day your kid is is born, but that is the number that would get you there if you're looking for that upfront sum. But yeah, that is setting your kid up for an extreme level of security and just possibilities at a very young age. So if that's a gift you can give your kid, a very solid 30th birthday present.
00:11:20
Speaker
And whether you decide to lump summit or do the monthly contributions, once you've made a decision to contribute, the very next question you're going to have is, okay, what do I, what kind of account do I contribute to? And you have a few options for kids. One is a atma or agma account, uniform gift to minors act. They're basically the same kind of account. And basically that's a brokerage account in your kid's name.
00:11:44
Speaker
And when they turn 18, it automatically shifts to their ownership. So you can imagine some of the pros potential pros and cons of that. Another type of account to consider is just a general brokerage account. This was this is what I would advise. In my own situation, I have used Atma accounts for my kids, but in hindsight, I think I would just use a brokerage account under my name and contribute money to it, still under my name, but have it earmarked for them. And then when they hit young adulthood or 30 or whenever it's appropriate to shift that to their side, to their net worth, then I can do that judiciously, maybe with a little bit more discernment through those early adult years.
00:12:26
Speaker
I do like the idea of having it in your name as an adult because it does give you control, especially if your kid, you know, maybe they get into some, some kind of trouble. Maybe they're facing an addiction problem. You never know what's going to happen with, with any given person, especially a kid who's not a fully formed adult yet. So I would be a fan of that idea of giving yourself a little bit more control. And then as the kid demonstrates that they're capable of handling it,
00:12:54
Speaker
Then you can hand that over. And then there are some impacts and I know rules change over time, but there are impacts and we'll talk about college a little bit later. But depending on where the money is in particular accounts, it may or may not impact their ability to ah receive particular kinds of financial aid for college. So that's another thing to think about.
00:13:14
Speaker
Another account that a lot of people use and is very popular is a 529. That's specifically for education. Now there's, again, rules change with how you can use 529 funds in young adulthood, and that's worth exploring. So before you decide on which account to actually start contributing to, do your homework on at least those three. Again, my vote would be for a brokerage account and your name under your Vanguard or Fidelity account. And then as adults, then begin to shift that over based on the most recent data you have and relationships that you have with your kids and that they have with the world around them to to make it smartest. And ah it mitigates a lot of that downside risk that ah you, Carla, that you just mentioned. That sure does. So walk us through the second strategy that we have for helping your kids become millionaires.
00:14:05
Speaker
Sure. At some point, like that can be everything we just did in that first one. That's kind of by behind the scenes. That doesn't have to be an overt conversation with your kids. You just know you're helping them and you're taking action so that they have that some kind of amount of net worth at some point in their future.
00:14:21
Speaker
as they grow, you're going to want to start teaching them basics about money, why it's important, how it actually works. And one way you can do that is to show them how compound interest works. Now, you may have already contributed some money, which is great. Additionally, if you're in a position to do so, when they get old enough,
00:14:39
Speaker
I think around 10, 11, 12 is probably a ah good age to do this. They're starting to get into that pre-teen teenage years where money is a big deal and they're they see games that they want. They go have ice cream or boba tea with their friends after school. So they have they're starting to grow their relationship with money. But this is also a really good time for them to not only learn how to manage money they have in their pocket, but to see actually see how money grows over time.
00:15:05
Speaker
So an idea that I have, and I will very likely start with my son when he turns 11 in just a few weeks, is it's kind of a two birds of the one stone. I think I'm going to put $100 cash into an envelope and every month I'm going to hand it to him. I'm going to say, okay, now let's say 50% of your income, give it back to me. I take that $50, put it into a brokerage account.
00:15:28
Speaker
broad market low cost index funds like Vanguard's VTSAX or Fidelity's FKSAX, one of those. I'm not sure exactly the ticker symbol. And then, so we're not looking at the account that we've been building net worth for him over time. Cause that might be a big number by this point and might throw him off and not very relatable. But if you start with the minimum, you can in that account and then add that $50 every month over the course of a few years, he's going to start seeing that line, that compound interest growth, hopefully,
00:15:57
Speaker
Let's go out maybe it's going out but either way he starts to understand compound interest in how. Investments can grow and it gets into the habit of actually taking money tangible money and putting us somewhere more to invest that's a way that kids can be actively active participants in their own money.
00:16:17
Speaker
knowledge. And that's a very simple way, I think. You're not asking them to, you know, teaching them accounting fundamentals or anything like that. You just, you want them to get used to seeing and getting into the habit of contributing automatically whenever you get income and that it just doesn't go to nowhere. Here's the value. Here's what happens to the value over time, whether it goes up or down. And then you could talk about that. You can use that, whether it's going up or down, you could talk about why that might be happening.
00:16:39
Speaker
and why staying the course is a good good call. So this gives another framework of continuously learning about something that they can see that's theirs versus just, I think my parents have a lot of money or we're struggling financially.
00:16:51
Speaker
I love that idea. I've also heard of parents who let their kids sort of get the individual stock picking out of their system. And it also just helps them understand what it really means to own a stock. If you tied to one individual company, I think it might be a little bit easier to understand. So have them pick a company that they know and care about. Maybe it's Nintendo or maybe it's, you know, their favorite ice cream brand and put a little bit of money, emphasis on a little bit, into an individual stock so that they can understand, oh, when Blue Bell ice cream is having a bad day, I'm having a really bad day. This is, you know, all my money is in Blue Bell. And it will help them see which happens live. There's listeria outbreaks, right?
00:17:39
Speaker
So it will help them see real world events can be tied to the performance of my stocks. And that's why it's powerful to diversify my portfolio and invest in a lot of different things. Now you could pick the next Apple and your kid could get very tied to individual stock picking.
00:17:57
Speaker
But on the flip side, you will have picked the next apple and so your stock will perform quite well. But I think you know maybe picking a few that they can watch will help them understand just the different ways that stocks go up and down and for different reasons why they go up and down. So that would be a thought to consider. Carlo, what is your number one stock pick freee for your imaginary kit? If you had to do it right now, which one would you advocate?
00:18:20
Speaker
I probably would pick something that they were very familiar with. So if they have maybe an iPad that they really love, I'd say, well, let's buy a little bit an Apple. But think I think I would tailor it to their interests. And I would also be excited to usher them towards something that I didn't think was going to perform very well. And then you know you put 100 bucks in that. That's 100 bucks very well spent if it helps them understand, oh my gosh, I lost.
00:18:47
Speaker
30% overnight though was a real bummer. Yesterday I had $100 and today I have $70. So I don't know what's on its way down, but i yeah, I would encourage them to pick things that they know and are familiar with, hopefully ah like a couple of winners and a couple of losers. What about you? I asked you, I put you on the spot, but I wasn't ready. if i were If I were to pick anything to hold over the next 30 years, and look, this is not, please, if you're listening to this, we're we are not advocates of buying individual stocks. This is purely just off the cuff here. If I had if i had to pick a single stock to hold for the next 30 years, it would be Google. That's what I would advocate because they're on Google every... I mean, they see it. Kids always go to search engines. It's Google. It's right in front of you.
00:19:28
Speaker
there making leaps in AI, got their hands and everything. A lot of information being bought and sold. So I think whatever whatever technology and whatever the future has, compet Google and companies like Google will be in an advantage. That makes total sense to me. And hopefully that's one of these winners that you pick. All great advice. Or it goes to zero and we no longer have a YouTube channel. All right. Talk to me about strategy number three for getting your kids to that coveted millionaire status.
Teenagers and Roth IRAs
00:19:55
Speaker
The first way to help your kid was to invest as early as you can, whether it be lump sum or monthly investments. The second was teach them about how some, some money principles like compound interest. The third now in their teenage years, maybe they want to work, maybe they want to get a job and start saving money or probably more likely wants to start spending money because that's what kids do. They want to go out and spend their money, but it puts them in a unique situation. If,
00:20:25
Speaker
i'm not Depending on your state, I'm not sure the legal age of a child actually having legal work, but I believe it's 15 for most states. So if your child is 15 and they go get a job, whether it's at a smoothie shop or a restaurant, whatever it is,
00:20:42
Speaker
and they start getting income, they can contribute to a Roth. Now, they're not 18 years old, so you will have to start a custodial Roth IRA for your child. And it's whatever earned income they make up to whatever that year is. In 2025, the Roth limit contribution is $7,000.
00:21:03
Speaker
So if your child makes $7,000, they can put that entire $7,000 into a Roth. That's a custodial account. That's another way you can show them how to invest. So once it's there, then they invest in your VTSEX or VSKAX. And that's another way that they can build wealth. Now, do you expect your child to put 100% of their money into that Roth account?
00:21:26
Speaker
Absolutely not. You want them to have some of that. They're, they're the ones going to work. They're the ones who are doing it for a reason. Usually probably for something fun, like going to the movies or hanging out with their friends or buying gifts or makeup or whatever it is. And that's great. They're also continuing to learn how to manage their own money. But what you could do as a parent is look at their pay stub. If they've made that week, say they made $117, you can then go to your, your checking account.
00:21:52
Speaker
or go log onto their Roth IRA account and then transfer that $117 from your checking to their IRA account. Now, what I would advocate and what I've done with my daughter when she turned 15 and did that, we started her a Roth IRA, whatever she contributed, I doubled. But I was aware that it makes sure that we don't pass either the limit for her w Roth IRA that for that year.
00:22:14
Speaker
or the amount of money that she actually made. So if her paycheck was $200 and she contributed $100, I would contribute another $100, if that makes sense. So that's the one way that a parent can help their kid once they start working. Now, when they turn 18, all you have to do is get on a phone call with either Vanguard or Fidelity, and they will shift ownership of that Roth IRA basically from you to them. I think it took me all of about 20 minutes to do that over the phone.
00:22:43
Speaker
That is an incredibly generous thing to do as a parent to have that doubling effect. I think it's really motivating for a kid to go out and get a job and say, no, that their income is basically going to be doubled because their parents are able to help contribute to their future in that way. I love that idea. And I, as I talked about in an earlier episode, I'm not someone who started working at a very young age, my besides some babysitting gigs.
00:23:09
Speaker
my first real job was in college. So I like the idea of encouraging your kids to work at a young age. I think it instills a sense of responsibility. I think it gives them a sense of pride of ownership over the money that they're earning.
00:23:25
Speaker
And hopefully that turns into financial responsibility because they see the power of those dollars and what it can do for them and the effect it'll have on their future. So I love this one. I think it's powerful in a number of ways.
00:23:40
Speaker
So the next one is actually a lesson that yeah even many adults haven't really locked in on, yeah but it's something that we, in particular in the financial independence community, and maybe not just finance, I mean, um I would assume all of personal finance or anytime you have limited resources and just want to use them the most efficient.
00:23:57
Speaker
valuable way possible is to understand what you value. But part of doing that is then you reflect what you value out in the world and you assess things out in the world. But then you use money as a tool to trade for certain things. So framing value to your kids throughout their childhood is a tool that they will be able to to use to help them make better decisions about how they spend their time, how they spend their money, how they spend their effort throughout their entire lives. So this is a big lesson, but you can convey it in bite-sized chunks. For example, about this last week, my son and I went to get ice cream. He wanted to go. He had gone to a particular ice cream shop before, really liked it. He's his dad.
00:24:41
Speaker
I'd like to go, let me show you this ice cream shop. So we go. And I try not to be, you know, you can get way more ice cream, but you got to say it sometimes just so that they know. So i'm I try not to be too hard about like spending money that I don't think is worth it, but it was an experience so we went for it. He did get a cone, he got a sugar cone and he got a big old scoop of ice cream on top of it. And I got a little cup. Eh, why not try it? Yeah, I think our total came to be like 14.50. So we're back in the car, we're enjoying our ice cream and like Quentin,
00:25:08
Speaker
I had fun. I'm glad we got this ice cream, but did you know you could get three big containers of ice cream for about the price that we just paid for that? If we just got it at the grocery store and had it out and kept it at home in our freezer and his eyes got real big. And then we went on and talked about something else, but to frame it in that way,
00:25:26
Speaker
hopefully it's planting little seeds of, you know, it's not his money, it's his daddy's money. So that does make it easier for kids to do. and But at some point, it's going to be his own money. And maybe he'll think about that experience or and many other like it before he he just to be aware of what he's getting for that trade.
00:25:42
Speaker
That's such a good example because it's something that does come up a lot. Kids love going to get ice cream. Everyone loves going to get ice cream, but especially kids. And I i hope that listen will really stick with him. And maybe next time you guys are at the grocery store together.
00:25:58
Speaker
you can walk down the ice cream aisle and say, look, look how much a half gallon of ice cream costs. Then let's, you know, let's think about that compared to the single serving that we got at the shop. And that is something that can just translate to so many different areas of your life, right? You show them that, Hey, maybe, so this, this is certainly true for me.
00:26:20
Speaker
I don't give two hoots about cars. I think they are a piece of machinery that gets me from one point to another. Just a useful thing to have around. Don't care what it looks like. Just couldn't care less about cars. So for me, I would want to model that value to my kids. Like this is just not a thing that matters that much to to me. So I'm not going to spend a lot of money on it. We're going to drive an old kind of beat up car and that's okay. As long as it's safe and it gets us around, that's what we need. But maybe I do really care about this other area of my life, like you little hypothetical child, I really care about you. So I'm going to invest in your your future wellbeing by making these contributions to your account, or I'm going to invest in your education. There's so many ways that you can demonstrate what matters is where we put our dollars.
00:27:08
Speaker
And what doesn't matter is where we scrim whenever we can, because it doesn't hurt our quality of life to scrim in the areas that just don't mean that much to us. So if we like ice cream, let's get it at the grocery store or let's even make it at home. It'll be fun. It'll be a memorable thing you guys do together. And you can probably get that cost out even more if you make it yourself. So lots of great examples. But as you said, this is a ah lifelong lesson for not just kids, but for all of us, right? We're always trying to be better about having our dollars go where our values are. So it's a huge lesson. And I think it starts at an incredibly young age and continues way into adulthood.
00:27:47
Speaker
So for the fifth way, you can help your kid become a millionaire. Up to this point, your child probably has some net worth built up from your contributions to the earlier account that we talked about. They've got a Roth IRA and they're and probably in their early 20s, maybe they were going to college, maybe they're already working and continuing to save and invest. They understand the value of a dollar. They understand compound interest. But as your kid approaches their late 20s, they will continue to have financial, either maybe financial struggles,
00:28:16
Speaker
or financial desires, or there's things that you might want to help with to make their adult life a little less volatile financially. For example, maybe they've got student loans. You might want to pay some help pay them off. Maybe they want to buy a house. You might want to help with that down payment. Maybe they're going to get married. Maybe you want to help with that. There's ways you can start shifting your money over to their side to help them continue to grow their net
When to Transfer Wealth to Children
00:28:45
Speaker
worth.
00:28:45
Speaker
And we just read a book and we did a show on it. The book is called Die with Zero by Bill Perkins. And I'm not sure exactly where you got the information from, but it makes sense. And that and he states that the best time to transfer your wealth to your children is from the age 26 to, I think he said 35. So as we go through these numbers these ways to help your kids become a millionaire, this is a logical next milestone.
00:29:10
Speaker
you you are very likely retired or you know maybe even later in your years, if your kid's approaching 30. And if you're actually doing these things, you've you've got a pretty good handle on your own finances and you know whether this is actually a feasible approach or not for yourself and your particular circumstance. But if it is, now is the time when you can start shifting some of those some of your own wealth, transferring some of that wealth to your kids.
00:29:35
Speaker
Or you could just start shifting money. I don't know what your portfolio looks like. I don't know if you've got a house paid off. I don't know if you've got what types of accounts your money is in. I don't and i don't know your insurance. I don't know your medical coverage situation. But at this point in your life, you have a good grasp of that understanding. You can decide the smartest way to transfer that to your kids, if that's what something you want to do. If they've proven that as an adult, they can actually handle it.
00:30:00
Speaker
Yeah, it's an important caveat. And this to me feels like the most obvious way that people probably think about when they think about helping their kids become millionaires is just straight up giving them money. I yeah think when you asked me the question at the beginning of the episode, did your parents help you become millionaires? That's probably the first thing that comes to most people's minds when they hear, oh yeah, my parents helped me.
00:30:25
Speaker
Get to the financial status that I met today, but I actually think the first four methods that we talked about can be even more powerful, right? And they can start earlier and you can sort of acclimate your child to a level of wealth as opposed to just giving them.
00:30:40
Speaker
larger sums when they are in their you know mid-20s, early 30s. So there are so many ways to skin the cat if you're doing really well financially yourself and you have that bandwidth to help your kids. I think any of these strategies would help you to boost your kid up to the next level in life and just give them an enormous leg up. So from my own experience, my parents did help me pay with school, pay for school, and that gave me just the ridiculously powerful starting point of zero. When I graduated, I started at zero and the very first paycheck that I brought in the door got to go towards me and my future instead of paying off the education that I'd already had.
00:31:21
Speaker
So I will say i I made it as easy as possible on them. I had some scholarships and I went to very inexpensive, relatively inexpensive state schools, but still that is just a huge financial leg up that my parents gave me. College is a whole other kettle of fish that I think we'll get into in another episode, but for the right person with the right goals that are tailored towards needing education, I think that can be another great way to transfer wealth and help them start at zero, which I can tell you is a great place to be. Graduating and getting to keep your your paychecks instead of giving a huge chunk of them back to the bank is really, really great. So one thing that money can do for you is buy stuff that can make your life a little bit easier. So I thought a fun, silly topic for today would be talking about some of the things that make our lives
00:32:20
Speaker
better every single day. So David, do you want to kick us off and talk about some things that you've spent your hard earned money on that make your life better on a daily basis? I try to find ways to do things around the house very efficiently and with very little mess. So I think my choices are all kitchen related or food food preparation related.
00:32:41
Speaker
The first thing I do in the morning, or one of the first things I do in the morning is some people have coffee. We've talked in a previous episode, I do pre-workout powders, probably should do just cheaper caffeine, whatever it is, but that's at the other episode. I do work out, so I do have ah do justify having the pre-workout powders, but it's just powder. You put it in a cup of water and then what, you can get a spoon or and stir it up, which is a bunch of clanking and I've already just established that I don't like crazy noises.
00:33:08
Speaker
hu So there's this little mixer that I have. It's cheap, battery operated, probably doesn't didn't cost me any more than 12 or 14 bucks from Amazon. And I just, every time. And that could be either protein powder or pre-workout, or if you're doing hot tea, you know, he put the honey in, stir it up, dissolves like that, or sugar and coffee, whatever it is. So a little mixer, I use that every single day, multiple times a day, and it's very cheap. and But it adds a lot of value, I think. Okay, that is fascinating. I did not know such a thing existed. Really? Yeah. So, I mean- We'll do a good video. Okay. When this posts, I'm going to have a video of like how awesome it operates. All right. So everyone watch the video right now.
00:33:55
Speaker
Link below, not an affiliate link. Yeah, that is not a thing that would contribute to my life happiness at all. But I'm kind of a weirdo when it comes to beverages. Yeah, we can talk about that in on another episode. Beverages, that's why. and Okay, so thing number two, your first one is a fancy spoon, more or less.
00:34:14
Speaker
So I'm a bachelor. I live home alone like Macaulay Culkin. Wait, wait, wait. Macaulay Culkin is married now to like the world's most beautiful woman. Her name is Brenda Song. But he was in a movie called Home Alone. and Oh, nevermind. Just ignore it. It's cool. I'm fine. All right. All right. All right. Okay. So I do cook for myself and a very efficient way to do that. I have found over the last few years is using an air fryer. So I have a Ninja air fryer. It's got the two sides. You can either match cook or cook them separately or
00:34:48
Speaker
It's very easy to use, very easy cleanup. In addition to the air fryer, they have these paper liners that you can buy. So if you have an air fryer, you know how the bottom can get really dirty and oily and gross and you have to clean it every day. But if you have these paper liners, just throw it down there, whether you're throwing chunks of steak in there to broil, whether you're putting your kid's chicken nuggets in there or french fries, you just pull the whole thing out into a container. No mess at all, so no cleaning.
00:35:13
Speaker
Very efficient. So I use that every day, probably multiple times a day, but every day. Number three, also cooking. We've established in a previous episode about early jobs, you talked about how you know you're you didn't, you weren't selling you were not selling boy boiled peanuts at 11 years old on the side of a questionable sketchy street. That was one of my jobs growing up. But I also had a job as a short order cook. So I know how to flip eggs and prepare eggs for breakfast.
00:35:40
Speaker
But if you do that a lot, you know that you have to have a special pan so that it doesn't scratch, get scratched, doesn't stick. And you would take care of that pan and you only use that one pan. You only use that pan for one thing and one thing only, and that is for eggs. So on top of my stove is just a nice egg pan. I usually eat eggs at least every other day. My son's here, I cook for him. Those are the things that I use nearly every day that make my life better.
00:36:07
Speaker
What exactly is it a specific kind of pan? Like, is it a ceramic? Is it stainless steel? Is it like, what do you call it? The non-stick? It's like a steel and tough one. Okay. And it's just, I got a two pack from Costco. Gave the other one away as a gift. Kept one. Works. All right. If you ever get one of these pans and you want a good egg pan, don't ever cook anything other than eggs in it and never, ever use metal on it. Like a fork.
00:36:35
Speaker
All right. I will try to up my egg game. That's good. Good solid egg advice and games. That's what, that's what the listener came for today. All right. Well, my three things are very, very different from yours. I don't have any kitchen stuff, although I do. I really like our Vitamix blender and our KitchenAid mixer, but those aren't like everyday things. They're great. And I treasure them, but my three everyday things.
00:37:03
Speaker
um Number one, our robot vacuum. His name is Jeeves. He is actually a little on the fritz right now, but overall he's great. He helps us keep the dog here under control, which brings me to item number two, which is not an item at all, but is our beloved, perfect, wonderful dog, Miles.
00:37:23
Speaker
So dogs cost money that you have to feed them and care for them, take them to the vet, keep their vaccinations up to date. I love that dog to death. Dogs are good for your mental health. They encourage you to get more exercise. I'm a huge, huge proponent of having a dog. And then my third thing, which is also not a thing, is just our community around here. We love where we live and we love the people that live here as well. Just having those people around to support you and enjoy spending time with you.
00:37:58
Speaker
is invaluable to me. Last weekend we had a musical Christmas party, which was absolutely delightful. People of of all skill levels played some kind of musical instrument. And that's something I never would have done if we didn't have all these delightful friends around here. So basically my takeaway here is if you don't have money to do any of the other things we talked about, just get your kid a dog. That'll make their life way, way better. Or a robot vacuum, then they'll have to do fewer chores. They'll appreciate that too. Or an egg pan, I'm sure they'll love that. Oh yeah, gotta to have a good egg pan. It's critical stuff. Yeah, I might not be a millionaire, but I can ah can make a mean egg. Man, I can make some good eggs. There we go. What else can you ask for in life?
00:38:39
Speaker
When I knew we were going to record this episode, I asked Stephen, my brother, who I'm sure the listeners know who he is by now, what he would recommend as ways parents can help their kids become millionaires. He really, he gave it a lot of thought I could tell. Some of them overlapped with what we talked about, but there were two that he provided and it really hadn't even occurred to me, but they do make a lot of sense. Now the chances of this happening are not as high as some others maybe, but they are potential approaches to ensure that one reaches a net worth of $1 million dollars or more. The first one is winning the lottery. Now I wouldn't want to do that because then you got to go to the convenience store often and then you got to take it back and be like, can you scan this? I'm not sure. And you don't know if they like, Oh, it wasn't a winner. Maybe they take it back, but it was a winner and you don't know. I'm not sure the legalities behind that. So it seems like a risky proposal for that reason. Sure.
00:39:34
Speaker
We do know people win the lottery, so it is possible to get rich by winning the lottery. Another that he proposed was to marry rich. that That's probably easier to achieve than winning the lottery. And I know we didn't talk about that specifically, but if you're listening to this and you think those are good good ways to help your kid reach a million dollars, then please just address it in the comments.
00:39:56
Speaker
I get in the comments often, Carla is, she's stating that she is going to prioritize responding to comments in 2025. Love to hear what you think about everything that we talked about today. Yeah. Steven Boyer, man, on the money as always. Steven can do no wrong, can he? That's yeah. Steven on the money. I think you should have that. That should be his own podcast.
00:40:19
Speaker
Well, this has been a fun episode and I hope you parents out there or potential parents got something out of this. And I think we've got some good topics coming up in the next few episodes. So come back for those guys. You know, it just hit me. This doesn't even necessarily need to be for parents. you You have nieces and nephews, right? I sure do. I got a lot of them. Yeah. So maybe like Carla, what have you, have you done any of these five things for your nieces and nephews?
00:40:45
Speaker
Well, I'm obviously encouraging them to marry rich. That's priority number one. So beyond that, I think that's confidential, but yeah, obviously encouraging them to marry as rich as possible. Well, I hope it works out. It does for some. Yep, it sure does. It does. Thank you all for listening. Please jump in the comments. Let us know some other ideas that you may have to help your kids become more financially savvy and successful as they go through their lives.
00:41:15
Speaker
Thanks so much for tuning in in guys. We'll catch you next time.