How to help your children get rich (long before they start working)
You know this already:
The smartest thing you can do for yourself financially is to start saving for your retirement as soon as you get your first job.
Starting to save early has a MASSIVE impact on how much you end up with.
Have you ever, asked Sam Beckbessinger, considered how much of a difference it could make if you gave your child a 20-year headstart by starting to save for her retirement from the day she’s born?
If, for example, you manage to scrape together R2750 a month from the day she’s born, and put it in a Tax Free Savings Account (TFSA) until she’s 16 (i.e. max out the TFSA allowance for them), then your kid will never have to save a cent for their own retirement and can live off R87 000 a month from age 65 (yes, taking inflation into account!).
Or they could retire at age 43 on a monthly income of R20 000 a month, even if she never saves a cent in her life.
Most new parents don't have an extra R2750 a month to save, and most people probably feel like kids should save for their own retirements.
But it's still a fascinating illustration of how powerful compound interest is.
Perhaps you have an extra R100 or R200 a month to save; is it worth it?
It is, said Beckbessinger.
What matters most is for how long you can leave that money alone.
For more detail listen to the interview in the audio below.
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This article first appeared on 702 : How to help your children get rich (long before they start working)
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