How I am Building Wealth For My Newborn
This week, we welcomed our beautiful baby girl into the world, and I couldn’t be more thrilled to embark on the journey of being a “girl dad.” Sure, having my two boys has been an incredible blessing, but let’s be real – there’s nothing quite like that unique father-daughter bond. (Not to mention, boys are a handful on a whole different level. Just the other day, I walked outside to find my 3-year-old peeing on the front lawn.)
Every time we have a new baby, I find myself reviewing our family’s wealth-building plan. My ultimate goal? Make sure it’s simple, flexible, automated, and – of course – that it allows me to stack some big bank rolls in their accounts. I want my kids to have the resources to chase their dreams without having to worry about finances.
Here’s the plan I’m putting in place for my daughter, and it’s one I use for each of my kids.
Step 1: Start with an Initial Investment
As soon as we have all her paperwork sorted, I’ll open a brokerage account with her as the beneficiary. I’ll make an initial deposit of $1,000. This kicks off her account with a solid foundation, and with the power of compound interest, even this first investment will grow significantly over time.
Step 2: Monthly Contributions – Keep It Consistent
Every month, I’ll add $100 to her account. This consistent, steady contribution is key. It may not seem like much, but over time, these regular deposits add up, especially when invested in something like the S&P 500, which has historically averaged about a 10% annual return.
Step 3: Holiday and Birthday Boosts
For each birthday and every Christmas, I’ll make an additional $250 contribution. These “bonus” contributions keep the momentum going and give the account a nice little boost at significant moments in her life. Plus, it’s a way to celebrate those big milestones with something that’s meaningful and lasting.
Step 4: Keep It on Autopilot
The beauty of this plan is its simplicity and automation. I set it up once, and then it pretty much runs itself. I’ll check in on the account from time to time, but I won’t have to think about it too much. It’s all about putting this system in place and letting the magic of compounding do its work.
Step 5: Teach Her the System When the Time Is Right
When she’s 18, she’ll have a nest egg worth about $86,189, assuming a 10% average annual return. At that point, my role will shift to helping her understand the value of what she has and how to manage it responsibly. Whether she chooses to use it for education, starting a business, or simply continue investing it, she’ll have a foundation and the freedom to make her own decisions.
The Long Game: Growing Wealth Over a Lifetime
And here’s where it gets really exciting – if she keeps this account growing and reinvests wisely, she could be looking at $7.6 million by the time she turns 65. All from a simple, consistent plan that started with just a few regular contributions. That’s the power of compounding, and it’s the legacy I want to leave her – one of financial stability, options, and the ability to dream big.
This isn’t just a wealth-building plan. It’s a way to teach my kids about patience, the power of consistency, and the importance of financial independence. Here’s to helping the next generation build a brighter future, one smart investment at a time.
