BensTidbits on Nostr: Do you give your kid's allowance every week? Instead of giving them money each week, ...
Do you give your kid's allowance every week?
Instead of giving them money each week, set up a free brokerage account with a company like Fidelity and invest their annual allowance in an S&P 500 ETF. Then allow them to take any amount that is over their balance at the beginning of the year. For instance, instead of giving your kids $1 per week, invest $52 in an ETF. Then they can cash out on any amount over $52 (likely $3-5) during the year.
Then next year add another $52 to the account and let them draw from any amount over $104 (likely $8-10). By doing this you are teaching your children about the stock market and also you teach them not to live off of their earned income, but to only live off of their investment income, which is a valuable financial lesson that they can take with them the rest of their lives.
Instead of giving them money each week, set up a free brokerage account with a company like Fidelity and invest their annual allowance in an S&P 500 ETF. Then allow them to take any amount that is over their balance at the beginning of the year. For instance, instead of giving your kids $1 per week, invest $52 in an ETF. Then they can cash out on any amount over $52 (likely $3-5) during the year.
Then next year add another $52 to the account and let them draw from any amount over $104 (likely $8-10). By doing this you are teaching your children about the stock market and also you teach them not to live off of their earned income, but to only live off of their investment income, which is a valuable financial lesson that they can take with them the rest of their lives.