Establishing A Wealth Account For Your Child

Establishing A Wealth Account For Your Child

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Before looking into ways for kids to earn money, you should first consider establishing a great foundation for your child's financial security. This can be achieved by opening up a Wealth Account and regularly depositing money into it. While you are at it, open up an Education Account and a Savings Account as well.

The main reason for setting up a Wealth Account for your child is to get them started towards achieving their "financial freedom day" or being 'financially free'. Financial Freedom is where you have your money working for you rather than you working for it. Your lifestyle is funded by the income generated by the assets within this account and you no longer have to work. You are then able to choose if and when you work for money!

Now I know you may be sitting there reading this and saying to yourself "Is this woman crazy? Why should I do this now? My child is so young, they haven't even started working yet!"

The answer is simple, and the reason for doing this is to take advantage of compound interest. Compound Interest is simply defined as 'interest upon interest'.

Ideally, the sooner you set this account set up the better. It would be great to do this as soon as you've made the decision to have a child, however it really doesn't matter when you start; now is the perfect time to help them.

Even if depositing $5 a week seems to be too large a stretch for your family budget right now, consider depositing some of the money given by family members and friends for your children's birthday or Christmas presents. Providing your child with the gift of having the choice to live their life and not be controlled by having to work for money can far outweigh the pleasure of a new toy or gadget that only lasts a short while. Don't you agree?

Having a Wealth Account for your child also utilizes the pay-yourself-first concept that the wealthy have followed for years. This means that no matter what happens, you are consistently making a monthly payment to the Wealth Account for investing the first priority. If you haven't already done so, read the "Richest Man in Babylon". It's a great story to enforce this principal.

As previously mentioned, eventually over time, the funds accumulated within this account can be used for purchasing investments. All returns generated must be reinvested, allowing the funds to compound. Again, the aim is for your child to accumulate enough assets to generate the amount they require to fund their lifestyle from the income generated through owning the investments.

Whilst your child is very young, you will contribute to and manage this account. Once you are confident your child has demonstrated that they can manage this account and they are legally able to own the account, you can transfer the ownership to them. You should decide when this occurs based on the results you see your child achieving in earning and managing their other money.

About the Author:
Ways for kids to earn money is the most recent project for international author and speaker Nicole Clemow. In her search to find new ways for kids to earn money, she has written a ground breaking new book. Check it out here at http://www.waysforkidstoearnmoney.org for your free chapter and other bonuses.



Article Originally Published On: http://www.articlesnatch.com


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