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« Free Money Finance March Madness, Sweet Sixteen, Posts 1-8 | Main | How Much Should You Invest in Stocks versus Bonds? »

March 16, 2007


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Yes, yes, we know. Compound interest is wonderful.

or better yet, give them a $1000 a year to invest, but in a trust

As a fellow parent I empathize with wanting to give everything (and more) to one's children, but my altruism is tempered by sage advice from Dr. Stanley's writing in "The Millionaire Next Door." Many affluent people got that way through hard work and discipline. Furthermore the affluent often cite the trials of making their fortune as a significant expression for what is important to them. Gifts are often squandered because they lack sweat equity on the part of the owner.

Mind you, I'm not making any judgments about anyone's children, but the description of turning one's kids into multi-millionaire's raises a red flag. I like what Warren Buffet said about his plans for bequeathing his wealth to his heirs: They ought to have enough money to do whatever they want, but not so much that they do nothing.

A certain amount of seed money for savings may well establish good habits, but I think it takes some wise shepherding to avoid turning it into blow money.

Good luck with that whole 10% after-tax thing.

quote: Good luck with that whole 10% after-tax thing.

Ever heard of this thing they call the stock market? :P

Slightly off topic, but my son has a tax refund that I think he should invest in a Roth Ira. Can you open an IRA with just a small amount of money- less than $200?

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