Comments on: Helping A Teenager Take The First Steps Towards Financial Freedom

By: Laundromat Business

Laundromat Business — Tue, 05 Oct 2010 22:25:23 +0000

Let me echo Brian’s comments about teaching kids the value and benefit having your kids run a mini-business inside your own business. A relative of mine had a vendor business and the kids were involved with running part of it and believe me, they very quickly understood: ROI, ROT(time), sales, marketing, location, and P&L.

By: Brian Brunckhorst

Brian Brunckhorst — Mon, 25 Jun 2007 19:49:04 +0000

I think that it is good advice as well. I have a daughter who when turned eight, had about $350 in savings. I told her she was old enough to put it in the bank to start earning money with it and she told me that she would rather own a money machine, like I own (I own several Laundromats). Obviously she didn’t have enough money to buy a Laundromat or even one of the washing machines, so to make a long story short, she wound up buying a vending machine and put it in one of our coin laundries. She Nets about $60 a month and works only 4 hours a month running her vending business. She is now 11 and still actively running her business but now her younger brother (who just turned eight) wants in on his on vending business so he just got finished putting a machine in another one of our stores.

Each month the kids fill out a P & L and a balance sheet before I let them have their share of the profits. The lessons about money are tremendous and this kids love being their own boss. If you are interested in reading the entire story of my daughter Brooke and her vending machine business, check out the article I wrote about it at http://www.LaundromatInsider.org

By: MoneyChangesThings

MoneyChangesThings — Sun, 17 Jun 2007 16:07:39 +0000

He should ABSOLUTELY open a Roth IRA! He will literally earn add’l tens of thousands of dollars on even a small contribution! And a 14 year old should certainly be able to accomplish this, since he has no overhead.
This presumes, of course, that he is reporting his income to Uncle Sam. We talked our 19-year-old into this. She thought we were crazy, but when she saw the tables of the 60-to-1 return on her investment, she went for it. I haven’t worked out the numbers for the extra 5 years this kid’s money will be invested, but I’m sure it’s eyepopping.
http://moneychangesthings.blogspot.com/2007/03/road-to-retirement.html

By: A Tentative Personal Finance Blog

A Tentative Personal Finance Blog — Sat, 16 Jun 2007 21:50:24 +0000

My wife’s uncle recently (5 years ago) filed for bankruptcy. His family is in financial shambles. I’ve been recently speaking to his teenager son about jobs and encouraging him to open up a Roth IRA for retirement. I think some of my encourage is getting through, but that’s caused some tension in with the father.

I really want the teenager to do well, but I’m not sure how to “teach” him some life lessons while not sidestepping or stepping on his parent’s toes. The parents will not take advice from me, because they’re older and will not accept advice from a younger person.

By: Rachel

Rachel — Sat, 16 Jun 2007 12:31:04 +0000

Great advice, but you forgot tithing. The first 10% always goes to God!

By: Kimberly

Kimberly — Sat, 16 Jun 2007 00:12:51 +0000

Sounds like good advice. I hope to do something similar this summer and upcoming year–I’m graduating and entering college and will have my first regular part time job, with its first regular paycheck.

By: David

David — Fri, 15 Jun 2007 21:55:37 +0000

Great article – a very useful bit of information and *practical* for someone at that age. I can’t even picture saving for a house at 14!

By: broknowrchlatr

broknowrchlatr — Fri, 15 Jun 2007 20:08:15 +0000

That was all great advice for a 14 year old! I hope my kids have that mindset when they are 14.

When I was 12-18, I took all my money and put it in CDs that would mature when I needed the money. When I got out of college, I had about 10 CDs mature within 6 months and the money was used for a $20k down payment on our house.

One of those CDs represented my first $1000. I saved it when I was 10 and opened a whopping 14 year CD. To this day, saving that money is the one financial move I am most proud of. Of couse, that was back in the days you could get 7%+ on a CD

By: Ted Valentine

Ted Valentine — Fri, 15 Jun 2007 19:08:15 +0000

close tag

Good advice.

By: Amy

Amy — Fri, 15 Jun 2007 19:02:04 +0000

A CD is also a good choice when you’re a teenager. It’s available at your local bank, and helps support delayed gratification.

Another useful tip for teenagers – whenever you get unexpected money (gifts, odd jobs, etc.), save half.

My mother also set up an incentive program for me, where she matched everything I deposited into my “college savings” account. The deposits were never big or regular, so this was pretty painless for her, but I did this all through my childhood, and I was shocked when I was eighteen to discover I had several thousand dollars saved up. It was enough that I didn’t need to get a part-time job my first year of college.

By: Prasanth

Prasanth — Fri, 15 Jun 2007 19:01:10 +0000

And ask him to read Simpledollar regularly ;) Actually, that is solid advice that you gave out for a fourteen year old. How I wish I had a cousin like you when i was that young !!

By: Jason

Jason — Fri, 15 Jun 2007 18:55:50 +0000

If the stock market were to average an 8% return over the next 45 years, every dollar the kid were to put into a Roth IRA today would be worth $32 at retirement.

Not that I’m necessarily saying he absolutely should open a Roth, but that bit of math should probably be part of the decision process.