Here’s the third installment of the five tips I’ve created that will teach kids how to think like a millionaire – since thinking like a millionaire is the first step toward becoming one. Here are the links to the first two tips, if you missed them:
Tip #1: Learn how to delay gratification
Tip #2: Work & Earn Money
Both of these tips lead directly to the third tip: #3 Save Money
Show your kids how to save and invest what they earn. Explain that they can invest in themselves by investing in their own business. Maybe that means getting a job to earn the dough to fund the blog they write, launch the website they create, or just to buy the lemons, sugar and cups they use to buy and sell lemonade. Maybe it means buying a share of stock in a company they believe in. Whatever makes the most sense for them, just save and invest and as a result, begin to understand the power of compound saving early and often.
When kids start young, time is on their side. For example, show them how foregoing the daily fruit smoothie and instead investing the $4.60, that money will add up to $1642.50 a year. At 5% interest, not getting that smoothie will give you $21,000 in your savings account in 10 years.