Content

• Steps
• Tips
• Warnings

While a child's desire to start saving money is commendable, it may be even more prudent to acquire a portfolio of securities that will provide him with at least a modest income throughout his adult life.

Steps

1. 1 Put your money in a savings account. Consider several options to find the best interest rate. It is best to look at smaller banks as they usually offer higher rates compared to large banks.
   • If you put $ 4 a month into a child's account at an interest rate of 1%, then in ten years you will have $ 505, as opposed to $ 480 if you keep money in the bank at home.
   • If you put $ 4 a month into a child's account with an interest rate of 2%, then in ten years you will have $ 531, as opposed to $ 480 if you keep money in the bank at home.
   • If you put $ 4 a month into a child's account with an interest rate of 3%, then in ten years you will have $ 561, as opposed to $ 480 if you keep money in the bank at home.
2. 2 Purchase treasury bonds. The Treasury Department sells a variety of investment products.
   • EE series savings bonds can be purchased online or at your bank. They pay interest at a fixed interest rate (announced on May 1st and November 1st every year). Interest is calculated monthly, and compound interest is calculated every six months (every six months). If repaid within the first 5 years, there is a penalty equal to the amount of interest for three months. The minimum amount required to purchase a $ 50 EE bond is $ 25. They are issued in denominations of 50, 75, 100, 200, 500, 1000, 5000 and 10000 dollars.
     • At the end of the year, a child who is saving $ 1 a week will be able to buy a $ 100 bond for $ 50. With an interest rate of 1.4%, in ten years it will cost 57%, and in 20 years, regardless of the interest rate, its value is guaranteed to reach $ 100, which will bring 5% income.
   • Series I bonds can be purchased directly from the Treasury website or from a bank. These bonds carry an annual interest rate based on a fixed exchange rate and inflation rate. Interest is charged every month and is paid upon maturity. If repaid within the first 5 years, there is a penalty equal to the amount of interest for three months. The minimum amount required to purchase a $ 50 Series I bond is $ 50. They are issued in denominations of 50, 75, 100, 200, 500, 1000 and 5000 dollars.
     • At the end of the year, a child who is saving $ 1 a week can buy a $ 50 bond for $ 50. With an interest rate of 4.84%, it will cost $ 74.26 in ten years and $ 99.21 in 20 years.
3. 3 Buy silver coins. Investment opportunities for young people are quite limited. Real silver coins are a good investment option. They are accessible, beautiful and tangible; and in a volatile market from 1970 to 1980. the price per ounce jumped from $ 1.64 to $ 16.30 and then fell back to $ 4.07 by 1990. In 2000, the price was 4.95, and in 2008, it was already $ 14.99. Before deciding that this is a good investment of your funds, check the prices.
4. 4 Save money to buy your first shares. If you only get five dollars a week for pocket money, and you save one dollar a week for a month, you can buy one share of Revlon, Atari, Sirius Satellite, Denny's, Six Flags Inc, Sun Microsystems, TiVo, LeapFrog, Ford or La-Z-Boy (along with others). Learn more at One Share dot com.
5. 5 Save money to buy your first direct stocks. If you save $ 50-1000, you can buy Kellogg, McDonalds, Hershey, Home Depot, or Disney stocks (among others) directly from the company, without opening a brokerage account.
6. 6 Open an individual retirement account for Roth. This is a personal retirement account authorized under United States tax law. Named after its official sponsor, US Senator William Roth, Roth's Individual Retirement Account is significantly different from other retirement accounts. [2] It provides very favorable compound interest, so it can be opened from a young age.
   • If a 15-year-old teenager deposits $ 2,000 per year until the age of 18, and the average annual return is 9%, then by the age of 60 there will be more than $ 370,000 in the account.
   • If a 15-year-old teenager deposits $ 2,000 per year up to 60 years old, and the average annual return is 9%, then by the age of 60 there will be more than $ 1.2 million in the account.
7. 7 Learn to handle money. The last but not the least important aspect is the correct investment of funds, and you should also set a goal for yourself - how much money you want to receive by a certain date. Make an action plan to help you achieve your goal.
8. 8 Make money at home. Making money from an early age will build the foundation for future accomplishments. You can try to do:
   • Babysitting. Babysitting is the easiest and most fun way to make money. You can earn up to $ 15 an hour, so if you babysit for 3-4 hours you can earn $ 60 a day.
   • Household work. If your parents don't mind, you can do the cleaning or housework for money. Of course, it also depends on how things are in your family.
   • Employment. Ask your neighbors if they need your services. You can wash cars, rake leaves, mow the lawn, or even distribute newspapers.

Tips

• Let your capital grow.Try not to waste money from your retirement account or interest. If they are intact, then by old age you will have a tidy sum in your account.
• Find out the value of mutual fund stocks or create your own mutual fund. If you choose the latter, you should always choose the cheapest one, and you should not opt ​​for a highly specialized fund. The investment company will help you with this.
• It is better to establish a relationship with an accountant in advance. An accountant will help you prepare your tax return, control your finances and advise you on where to invest your money.
• After a while, calculate your investments, income and interest rates with your accountant. Do this periodically as you mature and your capital grows.
• Try to write a small investment report and show it to your parents. Maybe they will give you enough funds to start an investment fund. After all, this does not take much. Maybe $ 1,000 or less.

Warnings

• If you delay until old age with the opening of a Roth individual retirement account, you may not be in time. Only people who earn less than a certain amount per year are eligible for this.
• The fees for transferring funds to One Share dot com are very high; however, a share certificate can increase in value over time. Take a good look at this type of investment.
• In order to deposit money into Roth's individual retirement account, you need to have a paycheck. You cannot invest the money you earn from babysitting or mowing a neighbor's lawn until you complete the IRS register (financial income statement) with your (child's) tax return attached.