The Best Long-Term Investment for a Child

 You can look at investing from a number of angles.  Most people cover the basics.  They invest to build an investment nest egg, pension, etc.  But they fail to take the holistic view – secure their children’s future.  The best long-term investment for a child at any age is not just in assets.  Invest also in the qualitative non-financial areas like education, health, and your own personal finances.

What does it mean to invest in your children holistically? For a long-term effect, start cultivating the money mindset in them.  If the dollars ever run dry, this is the engine that will help them create wealth.  They will have sound health and admirable family values to compliment their financial efforts.

Investing in Your Child’s Education and Development

Education is simply the best long-term investment for a child.  Whether formal or inform, this should not be taken lightly.  The school system might not be perfect, but it is better than not having any education at all.  Give your kids room to dream.  Let them be all they can be.  Just remind them that they need to become millionaires while doing it.

Formal Education

Allow them to dream big and pursue what they love.  The labor of love or career of choice will put a bounce in their step each day to pursue their career or business.

Home Schooling

Homework is like a house chore directed by the school.  Many kids don’t like it too much – but they know it’s a must.  If you teach your children financial literacy while making it fun and compulsory at the same time; you will get the same results that the school systems are aiming at.

Reading Books

Knowledge is potential power.  It becomes complete when you apply it. Education through books is the best long-term investment for a child today.  Give your kids the essential reading list outside the school materials.  Give The Richest Man in Babylon. They’ll have an edge among their peers.

Online Resources

While shielding your kids from unsafe internet content is wise; do the opposite for vital content.  Offer them interactive or video content that inspires them about money.

Earning Extra Income

Working and earning have no age boundaries.  Pay your kids their allowances, and assign bonuses for doing house work.  As they earn from helping out with babysitting, raking leaves, and mowing lawns, remind them to assign deposits into their investments – which you’re a custodian of.

Investing in Your Child’s Health

What does it mean to invest in your children’s health?  The health of your kids should be of primary importance to you.  If you’re single, or hope to have kids someday, ensure that you make the right investments in their health.  Because the best long-term investment for a child is in his or her physical well-being.  This includes their mental health and emotional welfare also.

Diet Choices

Food is important.  What you begin today will become a habit in future? Have you noticed the distribution of ethic food throughout the United States?  The immigrants couldn’t do without them, because they’ve been raised and groomed on those kinds of foods.  So there’s a definite connection between what we feed our kids today, and the ultimate state of their health in their adult lives.  Kids will not depart from healthy standards when they’re groomed with it.

Sports & Fitness

Exercise will work for your kids like an excellent diet plan we discussed above.  You can’t wish longevity on the next generation.  You’d have to be deliberate and intentional to invest in it through family and school fitness or sports programs.  This is a great example of some of the best long-term investment for a child and their health.

Sage Tip: 7 Simple Ways to Maximize Your Potential

Gains from Mental Health

Their psychological well-being is most pivotal.  From this store of resources would your kids build their wealth mindset.  They are likely to pick up both the negative and positives from you the parent.  Be that leader that your offspring will follow and emulate.

Gains from physical health

Diet, fitness, and mental health work together to garner a healthy life.  Balance these out with the right amounts of sleep, rest, and play.  This would constitute your personal lab for manufacturing happy healthy millionaires into this world.

Social & Peer Groups

Peer groups may sometimes contribute to peer pressure. Imagine having your child belong to a gang that is solely focused on investing in stocks like Warren Buffett?  That wouldn’t be a bad idea would it?  But guess what?  You could create this group or club with other parents.  You’ll be creating the best long-term investment for a child at any age.

The families would meet and play investing games.  Build a brand-new game from scratch or use Monopoly, CASHFLOW, or online stock simulators with multiple screens.  This concept would also fly if you created an online brand that could be monetized to the advantage of the group.  You could publish materials, books, and apps that parents from all over the world would love to use.

Cover Your Own Back

This is an essential first step.  The foundation you lay for yourself with the help of a partner/spouse or neither.  This will give you your true north.  The best long-term investment for a child is to secure your own future.  If you want the best for your seed, then invest in yourself holistically by beginning with the essential personal finance recommendations.

Start Budgeting Now

Creating a systematic regular budget has become easier than ever.  We no longer live in an age of doing a massive pile of paper and ink based accounting with Casio calculators.  Rest assured that there are simplified budgeting tools like the 50-30-20 Budget, Budget Sheets, and Budgeting Apps to help you align your expenses with your income.

The alignment need not be equally balanced.  The end game is to live below your means.  A budget will school you with a visual outlook on how your living expense could be trimmed.  Especially in the wants section.  You next step would be to maximize your income to achieve a surplus.  I believe the best long-term investment for a child is to have a parent who has created some golden surplus for investing in their future.

Sage Tip: The 50-30-20 Budgeting Rule Hack: Get Richer Faster

Create Your Emergency Fund

Put your financial house in order.  Wake up and look into the horizon of financial uncertainties.  Unexpected financial adversities come to all.  These hard times have no consideration for race, gender, or age.  In order to build the best long-term investment for a child, you’ll need to cover your own back.  Create an emergency fund by saving an equivalent of at least 6 months of living expense.  Invest this is a minimal risk and high yielding savings account or its equivalents.

Pay Down/Off Debt

Are you carrying debt of some kind?  Aren’t we all these days?  Whether it’s good or bad debt, there’s someone who pay an interest, and another who earns it.  The debt that we’re concerned about it the one that enslaves you into paying interest, rather that collecting it.  Create a debt repayment plan.  Use one of the methods such as, the Debt Snowball method or Debt avalanche method to pay down your debts.  Your kids are likely to emulate each step you take in your own personal finance journey.

Sage Tip:  3 ways to pay off your debt

Early Retirement Plan

At whatever age you’re at, your retirement goal should include buying you time.  Your plan should be to reduce your retirement day by 20 or more years.  Shaving this much off the standard 65 years will give you the agile life to be able to get lost anytime you want on a tropical island or sunny beach with those you love.

Or better still, you could be able to retire from work you hate, into the labor you love.  Continue to earn more money and have fun doing something that fulfils.  So the best long-term investment for a child can also include the personal fulfillment of their parent(s).

Build Your Investment Nest Egg

As you design your retirement plan, you’ll check a few boxes.  You’d have your basic budget in place, an emergency fund, a debt repayment plan, and an early retirement agenda.  The main objective of your personal financial plan is to become financially independent.  For most people, it is the ability to cover all your future living expenses from just the interests, proceeds or yield from investments – without working.

Savings & Investment Accounts

529 Education Savings Plan:

Specifically designed to fund educational aspirations. Use this fund to settle tuition fees and education related expenses tax-free without any withdrawal penalties.

Cordell Education Savings

Another educational savings facility that is best suited for college funding. These accounts have eligibility and contribution limits. Get more information to find the option that aligns with your needs.

Custodial Roth IRA Account

This is a retirement account for your child. The child needs to be an income earner to qualify. The child is the owner while the parent remains the custodian.  Account is transferable to them at age of maturity.

UGMA/UTMA

An investment account designed for investing on behalf of your kids. You can gift your kids cash, stocks, real estate, etc into this account without paying taxes. However there are contribution and eligibility limits for this account.

Standard Brokerage Account

Your final option is to use your own online brokerage account to invest on your kid’s behalf. Buy and hold all the financial assets you desire for their college needs, inheritance, etc and pay taxes on profits and gains. You could transfer assets to them later through your child’s UGMA/UTMA account.

Sage Topic Family:

• How Can I Invest in My Child’s Future?
• The Best Long-Term Investment for a Child
• What Does it Mean to Invest in Your Children?
• How Can I Invest In My Child?
• 4 Ways to Invest in Your Child’s Future
• Should Schools Teach Financial Literacy for Kids?

A Few Parting Words About the Best Long-Term Investment for a child

Your children are your first investments.  They’re your responsibility.  The best long-term investment for a child would be their initial financial mindset programming.  Your role is to become the coordinator of this long-term development process.

Never ignore the impact you could have on our kids.  The best long-term investment for a child is by investing in their development and values.  What you teach them will compound until they begin to amaze the world around them.

Have any thoughts or ideas to share? Please use the comments section below.

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