Well its summer time and your high school (or college) aged kids are getting jobs to earn a little spending money or help with college expenses. It probably doesn’t seem that long ago that the most important thing in their lives was getting their drivers license and that all important first date.
These are events that they (and you) will always remember (Fondly I hope.) as defining the beginning of their change from a child to an adult. These and other such events foreshadow the things to come in their life. College, marriage, that first good job, and of course kids are right around the corner most likely and it’s a busy and hopefully thoughtful time in a young person’s life.
What both you and that new worker are probably missing however is just how big an event that first job and the earned income it provides are to the total picture of your child’s future.
With that job comes a unique opportunity!!!
Silently, quietly, and never to come again has arrived the most opportune time in their life to start saving and planning for their future. It may have more potential for financial security later in life than a college degree or climbing the corporate ladder to a high paying job or profession.
What is this magic moment?
What has changed in their life that you and they may be missing?
What opportunity has occurred that will never happen again?
Well it’s the chance to start a ROTH IRA while they are young.
PLEASE, PLEASE….. DON’T LET THEM MISS THIS OPPORTUNITY.
Get them to set up a Roth IRA as soon as possible.
It’s never too early to start saving and starting a Roth IRA at young age is a guaranteed winner if it’s left alone to grow. Start a Roth by 20 and it has a chance to grow for 40 to 45 years tax free rather than the current average of 25 or 30 years that most retirement plans do.
Time not investing savvy or how much you save is the greatest asset that any investor has in their arsenal. It is the one asset that can’t be made up for as compounding interest requires TIME to work it’s miracle of tremendous growth. While bad returns on investments can be over come and savings amounts can be increased when opportunity allows only time allows compound interest to work it miracle and grow our savings to astronomical levels.
Believe me this is the stuff that investing dreams are made of. The difference those extra 10 to 15 years of growth makes is impossible to realize unless you play with the numbers. But it’s safe to say that on average it will probably DOUBLE and maybe TRIPLE the amount they have at retirement if allowed too.
Remember no less than Albert Einstein when referring to compound interest is quoted as saying:
"It is the greatest mathematical discovery of all time"
If Albert Einstein felt that compound interest was a greater discovery than his other findings like E=MC2 it shows just how powerful it can be for your child’s future financial security. Just think Einstein was saying that compound interest was more powerful than atomic energy and I can’t argue with him when you’re talking about investments.
This article is a reprint from 6/27/2005 but it's still as true today as then. And with all of the economic uncertainty and questions about what the future holds for America and it's citizens regarding our financial future now is the time to teach our youth about the value of saving and the need to provide for their future. It is a give that will serve them well.