Financial Feminist - 135. How to Financially Prepare Your Kids for the Future with Andy Hill

Episode Date: January 23, 2024

“When the average person hears the words generational wealth, they think succession, yachts, and trust funds. When you and I talk about generational wealth, what we're really talking about is — how do we make our future family, or even our communities, better than we had it?” Are you setting your kids up for financial success? Do you even know how to? In this episode, Tori welcomes award-winning family finance coach Andy Hill back to the show to find out all the questions parents are or should be asking to prepare their kids for the future. From how to start talking to your kids about money, why starting at a young age is important, to what programs and resources you should be investing in. This conversation is filled with practical strategies and tools you can use to set your children up for financial success. Don’t have kids? Don’t worry! You’ll still walk away from this episode armed with knowledge and financial tips you can personally use to become more financially secure (with or without kids). Read transcripts, learn more about our guests and sponsors, and get more resources at https://financialfeministpodcast.com.  Not sure where to start on your financial journey? Take our FREE money personality quiz! https://herfirst100k.com/quiz Andy's Make My Kid a Millionaire Course: https://contact7--hillmedia.thrivecart.com/make-my-kid-a-millionaire/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

I think allowing them to make those mistakes and then having conversations with them afterward about it and almost letting that register in their brain a little bit instead of trying to solve all the problems for them right away. I think as parents, what we try to do is try to not let them have any sadness or any problems or any worries in their lives. And that doesn't really set them up to be independent adults. Hello, financial feminists. Good morning. Good afternoon. Good evening. Good midnight. I don't know when you're listening, but I am so excited to see you back here. My name is Tori. I'm a financial expert. I'm a multimillionaire. I am a New York Times bestselling author, and I fight the patriarchy by making you rich, by giving you actionable resources to better your money, and to fight the patriarchy at the same fucking time.

you actionable resources to better your money and to fight the patriarchy at the same fucking time. Okay, you know the drill. Subscribe if you aren't already subscribed. Review the show. If you love the show, just leave us a quick review. Five stars. Tell us what you like. And if you don't like the show, stop listening. I don't want you to listen to things that you don't like. Don't listen to things you don't like. You've got better uses of your time. Today's guest is a returner and we're so excited to have him back on the show. He is one of my favorite people to talk to and one of just my personal favorite personal finance creators. If you don't have children, this is still a great episode because the well-being of our next generation is something we all need to hopefully

guarantee, right? And having this information means you can better support the people in your life who are parents, even if that's not something you're planning for yourself. Or maybe you want to start a family, you want to be a parent, but just not right now. It's a great episode for you to listen to. Andy Hill is an award-winning family finance coach behind Marriage, Kids, and Money, a platform dedicated to helping families build wealth and happiness. Andy's advice and personal finance experience have been featured in major media outlets like CNBC, Forbes, Market Watcher, Kiplinger's Personal Finance, and NBC News. With millions of podcast downloads and video views, Andy's message of family financial empowerment has resonated with listeners, readers, and viewers across the world. When he's not talking money, Andy enjoys being a soccer dad,

singing karaoke with his wife, and relaxing on his hammock. We're going to discuss a couple of things today in this episode. How to start talking to your kids about money at any age, question we get all the time. How do I raise financially minded kids? How do I start having conversations with them about money? We're going to talk about that. Fun ways to teach your kids about money to help them have a healthy relationship with money and why financial literacy at a young age is so incredibly important. We also discuss the common financial programs for kids like 529 plans and their benefits, as well as what financial programs might not be a good fit for you and your family. And Andy highlights the ways that his kids who are under 14, I think they're

8 and 11, 8 and 12. He talks more about this in the episode. I'm trying to remember how old they are. Time goes by so fast. But they already have retirement plans. They're under 18, both of them. They're not even teenagers yet. And they both have retirement plans. So we're going to talk about how you can set your kids up for success and set them up for financial stability even before they're adults. Episode is great for anybody with kids who plans to have kids or just has friends who have kids or is just interested in how to raise financially minded children. Understanding how we can better prepare the next generation is something that impacts our community as a whole. So let's go ahead and get into it.

But first, a word from our sponsors. I'm glad to be here, Tori. Thank you so much for having me back. I really appreciate it. I said it before. You were one of my favorite people to talk money with. And before we started recording, you had mentioned that you've gotten so much love from our episode together, which makes me really happy and tells me that there's always a lot of people trying to figure out how do I manage money with a partner? How do I create wealth for my children? How do I teach them to be financially minded?

So I just love having you back. Thank you. Yeah. And I appreciate your listeners giving me the kind words because it's a complicated conversation that we're having and it's not just do this and it's going to be solved. So I think more conversations need to happen, I guess is what I'm saying. Totally. Since the last time we talked, which we figured out has been somehow a year ago, tell me what's been going on in your life, what's been going on with your money journey, and also how your business has developed in the past year. Yeah, I appreciate that. Yeah, I've gotten to a point personally where my wife and I have done some great things together. We've built our wealth. We've eliminated our debt. We've grown to a millionaire status in our late 30s. And then we got to that point where we said, okay, I think we're feeling pretty comfortable.

Let's dial back things work-wise. So we're working maybe this part-time work-style life while still having more time to dedicate to our kids. So we're indulging in that sort of time freedom right now, which is really exciting. But another conversation that keeps popping up for both of us is, well, how do we do this for our kids? How do we give them a leg up so that they can have a really exciting future too? Are there some moves that we could be making now that will let them have that same time freedom that we're enjoying now in our 30s and 40s? So that's kind of where we are in our money journey. And with that, obviously, I've been transitioning my

business to have a lot more of those conversations around time, freedom, and generational wealth. Yeah. Well, speak, I was literally going to ask about generational wealth, and then you set me up for it perfectly. I think when the average person hears the words generational wealth, we think succession and yachts and trust funds and these very inaccessible capital R rich capital F families, right? Like the billionaires, the handing down money, handing down companies. And yet when I think you and I try to talk about generational wealth, what we're really talking about is how do we make our future family or even our communities better than we had it? Right.

And I think about that with my parents, as we've talked about. My parents didn't grow up with a lot. And so they were very strategic and like, OK, how are we going to teach her what we didn't know? Or how are we going to set her up so that she doesn't have to take out student debt? Or how am I going to make sure I'm preserving my own retirement so that she's not financially responsible for me as I age? So can you define

what you consider to be generational wealth? And I imagine it's in similar terms, but like reframe those like often dirty words for us. Yeah, I have been enjoying watching those, some of those crazy shows like Succession. Oh, it's my favorite. It's often more from like a humor standpoint. I watch it like, oh man, this isn't the type of generation of wealth that I want or even want to be involved in. No, the types of conversations that are exciting me is having the ability and the agency and the wealth to make the choices that best serve you and your family, but also your community and the values that you care about as an individual. So if you're

all about making change in a certain area, let's say that you think as an individual, a late teen or a grown adult, that the fact that kids in our country not having enough food, nutritious food to eat just is appalling to you. You now have the agency, the voice, the money to make a change in your country, your community. That's exciting generational wealth. Those are exciting conversations. And outside of being a physical change in your community and making those changes, you also have personal agency to take care of yourself in the way that best suits you. So you're not beholden to an employer that doesn't treat you well, that doesn't value the things that you value. You can make the choices that best serve you in the future. So it's not only just generational wealth, but I think it's

generational happiness as well and being a change in your community. How does that play out in both your family and also in the families you coach? Is there a certain level of emotional buy-in that you have to, I don't know, like work with them on? Because I imagine, again, if you have these themes loaded in your mind when somebody says generational wealth, there's a lot of unpacking that has to happen before you can actually start logistically setting things up. So does that feel loaded for a lot of the folks you work with? Yeah, I would say the word rich or the word wealth can feel like because of the TV shows and the media that we see can feel so unattainable or just not for you. And yeah. Or gross. Yeah. Or gross. Yeah. it could be put in a way where it's, when we watch a show like Succession, where it's gross. It is

gross, what we're seeing. To a point of comedy, I mean, I think there's a little bit of comedic points on the show there. But yeah, I can feel like, well, I don't want to be that. And so I feel like it's incumbent on us with conversations like this and what you're doing on your show, Tori, is to change the conversation to being

wealthy, being rich, can be your own definition of what that is. You can say, hey, rich and wealthy means that I can be a powerful changemaker in my community. I can be a powerful changemaker in my family where we were. Now, where are we going to be in the future? Man, we are strengthening our family tree. We're changing and we're going to make it go where we want it to go because of the wealth and the empowerment that we have. I think it's incumbent on us to make that definition change. One of the things we talked about the last time we were here that I want to revisit is this often hesitation that parents feel in talking openly with their kids about money

and financial literacy. How do they start to work through those hesitations or those fears or just that stigma that money is taboo, we shouldn't have a conversation about money? Yeah, yeah. I would say the first hesitation that a lot of parents have when they think about this, well, you know what, I'm not a financial expert

or I don't know a ton about money. What can I actually teach my kids? Well, you can teach them a lot because kids learn by watching you. They learn by being involved in the conversation, not just by the words you use or what you say you taught them. They learn by being involved with the action. So as simple as going to the grocery store and looking at the prices and seeing just a conversation how they've gone up so much lately. Oh, that sparks a conversation about inflation and how things are moving.

So what do we choose now that we have a certain amount of money at the grocery store? Should we buy this? Should we buy that? Those types of conversations are good ones to have with your kids. And they're very simple. They don't require you to be a money expert. They just require you to have conversations and open up the communication table for you to teach your kids about money. Needs and wants. Needs versus wants. That's an easy one. What do we need versus what we want? Having those conversations early on can really help our kids

get an understanding of the necessities in life and the things that we want. Now, wants are important. And that's why it's important, I believe, to put money in kids' hands as early as possible. Because when we have money in our hands, that's how we learn how to use money, right? I mean, you don't become a really good basketball player by talking to people about basketball or watching videos about basketball. You put a basketball in your hand and you learn how to shoot.

You learn how to dribble. It's the same thing with money, I believe, for kids. As soon as you put money in their hands, they're going to make mistakes with it. That's okay. It's better that they make a mistake with $20 than $20,000 in their 20s or 30s. So let them play with it. Let them learn. And of course, you'd be there to guide them along the way.

But making mistakes along the way with money is actually a good thing. When we're educating kids about money, I think there is this, I mean, just money in general. I think beyond the education, we always feel like it's either perfect or nothing. We either do it perfectly and we're the money experts or we feel so afraid of making mistakes. And I really appreciate what you just said, which is even you doing this imperfectly is better than you not doing it at all. Even you showing up and not having all of the answers to all of the questions is better than not feeling like, oh, I don't know anything, so I'm just not going to engage. Absolutely. And I think that's probably the response that a lot of us have because our society says,

don't talk about money. That's taboo. That falls in line with religion, politics, and sex. Don't talk about those things. But sometimes some of those really important conversations need to happen in order for you to make change in your life, positive change, and open dialogue on those things can really help your kids figure it out over the long term. So I think having those open conversations is really the key to generational wealth.

Yeah. You were mentioning some really great examples, which is like having conversations in the grocery store about prices going up. I'm trying to remember if we did this last episode, but I think it would be even helpful again, is what are sort of those examples as a child ages? At what point do you start having these conversations with them? Is there a point where it's too early? I definitely know there's a point where it's too late, but like, what do those conversations look like as your children grow up? Yeah, I think those conversations, the ones we talked about, those can happen very early. You know, three, four, five years old, you're at the store, you're shopping with mom and dad. Now, as you get a little older, they can start contributing around the house in order to earn

money. And once they start having money in their hands, then you can start having conversations around very important areas like smart spending, saving, investing, and giving. These four areas, I believe, are the key towards generational wealth. I like to talk about this 60-40 generational wealth plan. Essentially, any of the money that comes into your kids' lives, whether it's from chores or the lemonade stand or anything, splitting it up in this way of 60% going towards smart spending. So the most of it, like all of us, most of it's going to go to spending towards the things that we need in life. 10% going towards giving, because I truly believe that being able to give a portion of your money, while it's 10% or 5%, whatever you decide it is, is a key to long-term

happiness. And we do a different form of 10% giving at our house. We do 5% to charities, causes, and passions that we believe in, and then 5% to charities, causes, and passions that we believe in, and then 5% to family, friends, and neighbors in need because it allows our kids to have that real, tangible ability to give to individuals and feel that impact. There are many, many scientific studies that prove that giving is a core piece of happiness in our lives. And I think if we're talking about generational wealth and happiness, a piece of that puzzle needs to be forgiving. And the other 20% is for investing for really big things in the future.

And the other 10%, which rounds out the 100%, is for saving. So big things in the near term. I want to touch on really quick what you said before, which is like, inevitably, if we put money in kids' hands, which we should do, they're going to make a mistake with it, right? Maybe they spend it on something that they actually don't love, or they save a bunch of money for something, and then they realize, oh, it's not on sale anymore, and it costs more than this now. How do you get them to honestly be okay making mistakes? Like, how do you talk to your kids about this so they don't internalize that financial shame

and instead just see it as something new to learn? Yeah, yeah. I think these all stem from good conversations and you being there during the process too. So for example, we've started our kids off when they were around that four, five, six, seven range with jars. So they would put the money in there and we'd physically empty the jar for spending day.

And we'd go to the store and they'd buy the things that they thought they were interested in. And honestly, I try to hold back as much as I can because that is an opportunity for them to make mistakes. And which is fine with me because maybe they'll buy that slime from Five Below and then they come back and the slime's just not as good as the one that they bought from the store online. And then they get upset about it and they say, well, that's a learning lesson for them to be like, okay, well, now I know. I got to spend a little bit more if I want this quality slime as opposed to the discount one. So I think allowing them to make those mistakes and then having conversations

with them afterward about it and almost letting that register in their brain a little bit instead of trying to solve all of the problems for them right away. I think as parents, what we try to do is try to not let them have any sadness or any problems or any worries in their lives. And that doesn't really set them up to be independent adults. And I think that's really our job as parents to start creating these little micro steps along the way for them to become independent, smart adults. And making those mistakes and learning from them is a good part of that path. I have recently found myself on slime TikTok. I didn't know it was a thing before. I'm obsessed with it. I didn't realize I liked this. And then I kept getting slime TikToks and I was like, this is so

soothing. And also like, yeah, the ASMR, the little tingly, which of your kids is into slime? I'm just curious. Zoe is really into slime. In fact, she got into making TikTok videos and there was this trend where you're like, they're playing with the slime, but then also telling a story at the same time. Oh, I haven't seen these. It's sort of the soothing little story. And then there's obviously the ASMR ones. It's very unique. And then they mix it with Roblox videos too. It's way over my head,

but I love it and she loved it too. I've seen the ones where they scoop them. Have you seen these? They're like, how scoopable are they? Those are the only ones I get. But I watch all of them every single time. I watch the whole length of the video anytime it shows it to me.

I'm like, which one does have the best scoops? I'm like, I need to know this. It's a very detailed, it's a whole ecosystem. You know, when she bought them originally, I'm like, okay, yeah, sure, get your slime. But then I play with them a little bit. And I'm like, this is kind of relaxing. You know, this is nice.

So if you're ever looking to just, you know, chill and do something and just relax, check out some slime. I love it. Yeah, I had no idea I was into it. And then TikTok delivered this to me. And they're like, you would like this. And I was like, you're right.

You're right. I do. TikTok delivers. It really, really does. Okay, let's talk about the nitty gritty kind of logistical things. Because setting our kids up for financial success, teaching them about money is one thing.

And again, if you want more about that, we talked about that in our first episode together. A lot of people though ask, what accounts do I need? How do I make sure that I am opening these accounts and funding them correctly? And what are the names of all of these? But before I even talk about that, one thing I want to highlight that I think we both agree on

is this oxygen mask version of finances, which is putting your own oxygen mask on first before you take care of your kids, even though I understand like your kids are your life, you want to take care of them. But this trend I'm seeing a lot is if you do have the financial means, a lot of people are putting money towards their kid's education or towards their kid's future, which is great, but sacrificing their own retirement to do it.

And what happens, of course, then is that, yes, your kids might be able to go to college or go to college debt free or at least lower debt, but they're paying for you later by you not being able to afford your own retirement. So before we even get into how to take care of your kids, I just want to acknowledge and have you talk about how do we make sure that we're taking care of ourselves so that we're not a burden on our kids later? I think that's an incredibly important point, and it needs to be the first conversation. Whenever we talk about making our kids wealthy or making them millionaires or whatever in the future, we need to make sure that we're set up for financial security first and financial wealth first, because we need to be in an empowered position in order to help our kids. If our cup is empty, our metaphorical cup

is empty, and we're trying to help somebody else out, it doesn't always go the best route. That could be emotional wealth. That can be financial wealth. We need to make sure that we're feeling in a good state so that we can give to others. And our kids are definitely those others as well. Our job is not the first thing that you do in parenting school is to make your kid a millionaire and to make them wealthy. No, no, no. You need to make sure that they're fed and happy and healthy and sleeping

in their beds. That's just parenting 101. But obviously, we want to make sure that we're taking care of ourselves first. So that's a lot of things. That's making sure you have your emergency funds set up. So you're taking care of yourself just in case of job loss. That means that you are investing on a path towards your financial independence or your retirement date so that you're ready to be done with work in your later years and have that independence. That's making sure that you're set up for your estate plan. These are all things that we really need to check the box on before we even have some of these conversations.

Yes, you can say, hey, I am automatically investing for my retirement. I'm automatically getting all of my debt paid down. That doesn't mean you can't do any of these things, but really need to fill up your cup first because as Tori's probably stated in the past, there are no retirement loans. There's no help for us later on when we're like, hey, I need a little bit more money

than that social security that I'm getting, or I need a little bit more money than I'm getting. There's nothing left at that point, but our kids can get student loans. Our kids can get a promotion at their job and make more money down the road. That's really an option for them. And it's not for us.

Right. Like student loans suck. I think we all agree with that. But they are available to you. Or they're available as a possibility to your point. And so, yep, I've said it on previous episodes. You're right. Like there is no retirement loan. There is no loan for your own retirement for your own future. And one of the harsh truths is, like, you taking care of your kids but sacrificing yourself still makes you a burden later.

Yes. You're then financially dependent still on your children later, even if you're trying to set them up for success. potentially dependent still on your children later, even if you're trying to set them up for success. Absolutely. And if you're knocking on their door when they're wealthy and you're in your 60s or 70s and saying, hey, I'm out of money because I made you wealthy, your kids aren't going to think that's fun or cool. They're going to want their independence too. Of course, they're going to take care of mom and dad. That's the nature of families. But let's try to not be a burden if we can. If we can make those choices now to help us have a bright future and our kids have a bright future, that would be ideal. Right.

So let's talk about these accounts. Let's talk about 529s first. What is it? How does it work? How do we contribute to one? Talk to me about it. Yeah, absolutely. I think the first one, when we talk about investing for generational wealth, even though there's so many problems with student loans right now, I still think that a college future, a college degree gives you a leg up in this world more than not having one. There are some studies out there that say a person with a college degree has an opportunity to make $1 million more in their lifetime than somebody without one. Obviously, you could hit it big and not go to college and start a great business and

do well. There are a lot of anomalies there. But on the average person who's able to graduate from college without a lot of burdensome debt, they can make a lot more money. And with that money, you can build wealth, you can have more time freedom, you can be happier. So I guess money's not the entire thing, but I still believe that a college future can help out with that. So what can we do to invest for our college future?

A 529 college savings account is a great way to go. This is an opportunity for tax-advantaged investing for educational purposes. So you can potentially get state tax deductions. Now, a lot of people worry about, well, what if my kid decides to go to trade school or does an apprenticeship or something like that? You could still use the 529 for that. Oh, what if they go out of state? You could still use the 529 for that. There's a lot of additions and updates to the 529 for that. Oh, what if they go out of state? You can still use the 529 for that. There's a lot of additions and updates to the 529 plan that have been great as of late too with the Secure Act 2.0 that just passed recently. They're even allowing for some rollovers of 529

if you have too much in there to roll over to a Roth IRA in the future for the kid as well. So they're coming up with new ways to make this a possibility. Obviously, there's an investment. The country essentially wants people to go to college so they can get that education so we can keep moving forward and having our capitalistic society. So this is an opportunity for you to look at a 529 college savings account. You can look at your specific state plan, and that can help you out a lot. It's a good starting place. I also want to highlight that these are investing accounts. So what you're doing

right is just like any other investing account, you're putting money in, but that's not enough. You have to go choose your investments to live within that account. One of the common mistakes, Andy, that we see is with any investing account, people put money in and they think, cool, I'm done. I don't have to do anything more. But it's not like a bank account. You have to actually choose your investments. You have to choose what the money is going into. The 529 or any other investing account is just the account that holds the investments. So this is an investing account on the stock market, not a savings account. Absolutely. Yeah. To your point, if it's just sitting there, that's potentially sitting in a money market, then you're probably even learning less than

a high yield savings account at this point. So making sure it's invested and diversified. A lot of these plans, which is a bonus, end up having these time-based strategies too. Because you go in there and you're like, well, I don't know what to invest in. They essentially give you these time-based strategies, which is essentially like a target date fund where you say, okay, my daughter's going to graduate in 2030. What index fund portfolio can I invest in to help me get there? So there are some easier ways to look at the investment process. Amazing. And just to clarify, if you have multiple kids, you can open up how many 529s? You can open up a 529 count for each kid. Now, if you open up just one and you pile it up and that kid doesn't use all those funds, the name can transfer from one count to the other

kid. In fact, you could even change the name to your own account if you don't use all the money. My wife just did this recently, actually. She went back to school to become an esthetician, and we needed some funds to do that. And we used the 529 that we'd built up. So it's very flexible and portable, as opposed to what also is out there, which is a UTMA, which is essentially a kids brokerage account. The name can't be switched on that, which is one of the downfalls, but it does have the option to be used for anything else besides college. Let's talk about a UTMA. Tell me more about that. Tell me more about how it works. Yeah, yeah. So that's another option. So when people are like,

well, I'm not sure if my kid's going to go to college, or I don't know if I want to just invest for college. Maybe I want to help them buy a home. Maybe I want to help them to start their business. UTMA could be a great route for that because with the 529, you're saying this is for educational purposes only. And that's okay. There's nothing wrong with that. But if you're saying for the, for, well, I'm not sure I want to do that, then you could look at a UTMA. And again, that is essentially, you know, Tori's talked about it on the show, a brokerage account, you know, but this is a kid's version of a brokerage account. So you can invest in a UTMA kid's brokerage account that helps you can invest in a UTMA kids brokerage account that helps you

to get towards those goals in the future. Some of the downfalls about it though are the flexibility. It's great. You can use it for anything. But when they turn 18, they can use it for anything. So it could be a business in our brains. We're like, oh yeah, they could start a business or they could buy a home or they could blow it all in Vegas or whatever. It's in their name. It's not in your name. The 529 would be in your name. So you're in more control of that account. And the portability of it makes it difficult

just in case if you wanted to switch it to your other kid's name, you can't do that. And when it comes to student loans, the 529 has about a 5% impact when you're looking at the FAFSA as far as it being a parent asset. And then when you look at a UTMA, since it's a kid's asset, that hits things at about a 20% rate. So your ability to get as many loans or scholarship opportunities is decreased just by that amount. So those are things to look at.

Neither one is like perfect, but you just have to analyze your specific situation, what your goals are and where you think. I don't think doing either one would be horrible either way. And if you're feeling stuck, you can just analyze those pros and cons and decide which way to go. That's super helpful. Yeah. And again, imperfect action is better than go. That's super helpful. Yeah. And again,

imperfect action is better than no action at all. Exactly. Yes. There's one thing you always take away from these episodes, like do something, even if it's not perfect. Yes. Like the worst decision you can make is making no decision at all. Yes. The inaction is the worst. Even some middle ground there would be a high yield savings account. I mean, just throwing it in a high-yield savings account, earning 4%, some 5% interest right now, it gets the game rolling for this future college expense. I would love to talk about something that I, speaking of TikToks, have seen a lot of TikToks on, and I know you do this as well, which is opening up Roth IRAs for kids. With a Roth IRA, you have to earn income in order to contribute. But we're talking about children under the age of 18 who, you know, maybe when you're in

high school, you're earning income. But if you're seven, are you making money? And you and a lot of folks on TikTok have a really smart workaround for this. So talk to me about how parents, especially parents who are entrepreneurs or business owners, can take advantage of Roth IRAs for their kids. Yes. Yeah. The main stipulation with Roth IRAs, whether it's a kid or it's you and I, is that they have earned income. So I do see some videos on there just saying, hey, I started a Roth IRA for my kid when they were born. Well, they better be earning income in a legitimate business in order for that to happen. Otherwise, that's not going to work out. So the workarounds that I do as a dad who owns a family finance education company is that I have co-hosts on my podcast that are my daughter and my son.

And I've also taught them how to do social media marketing for my site. Now, they do this for an hour after school twice a week. You know, it's not a ton of money. They're not millionaires or anything like that. You're not running a child labor scheme on the side of marriage. Exactly. Dad's sitting right next to him. I'm helping them. But legitimately, they have learned over the past couple of years to do some very helpful thing. Not just yesterday. I said, Zoe, can you get up those Facebook posts for our

Facebook group so that they are recurring each week? So they pop in there and ask about people's family financial wins. And two years later, after doing it with her for a while, I didn't even have to show her how to do anything. She just did it. So she had her cereal after school and she started posting the Facebook posts. I'm like, this is working. And she's learning some really good skills about how to run an online business. So it's not only a great thing to start investing for your kids early, but you can have some great, as we talked about earlier, some great conversations with them about how this stuff works, man. And then with their earnings, you can take a portion of it, you can take all of it and invest it as earned income in a Roth IRA

that can build up over time. And as you've seen with some of these compound interest charts, man, that can build up to millions and millions of dollars. This is a great way to make your kid a millionaire. We had a previous guest on the show. Her name is Shazi Vishram, and she has multiple companies that she's founded that are like family focused or baby focused. And on the back of them, she has these really like beautiful like pencil drawings of her kids. And she's like, they're our spokespeople. This is how I'm able to contribute to like their Roth IRAs or their like, because every on the back, you know, every single product they sell, there are their faces. They're the spokespeople for the company. Absolutely. And if you don't have your own helpful family business like I do, it doesn't matter. The

kid can start their own business and that is earned income. The kid could eventually work for a company when they're in their teens and then that could be earned income. Now, it can't be like, hey, they babysat the kids around the house. They watched them when we went to the store and I'm going to pay them $100 an hour and then we got a rough IRA. There are stipulations in there and you want to make sure that you consult with your CPA or accountant before you do anything like that. But if they have their own business or if they're working with the family business, these are great routes to consider. Or again, if they're in their teens and they start to work like you and I did in our teen years, these are great ways to earn some money and then invest.

Andy, any other accounts that you can think of or that people have common questions about? I think when we talk about investing, I like to think about it in three different areas when we talk about wealth building and for generational wealth. I think we talk about college as a big thing to invest for in the future. I think we talk about retirement. So we've talked about two of those. And then there's homeownership. Homeownership is becoming one of those things that is going to be difficult for a lot of people, man. I know you're hearing it a lot right now that it is high interest rates, high prices. And unfortunately, I only think that the prices are going to continue to go up. So if you feel passionate about your kids owning a home in

the future and knowing it's one of the major wealth builders in our country, you could start investing with a UTMA, a kid's brokerage account, so that they could get that elusive 20% down payment or 10% down payment or whatever it ends up needing to be in the future because time and compound interest can help you make that happen. If you do that from an early age up until they're maybe 30 years old, you could help them get like a 20% down payment on a million dollar house. And that's probably where houses are going to be in 2025 years, a regular old house. So in Seattle, I,

yeah, nothing. You're in Seattle. So nothing costs less than a million. Yeah. Like through two bedrooms, two bath, three bedroom,

two bath. You're looking at a cool one, 1.1, 1.2, like easy. And then a bidding. Yeah. Yeah. Sight unseen. Right. Yeah then a bidding war. Yeah. Yeah.

Sight unseen, right? Yeah. Exactly. Right. Yeah. So, yeah. Can you only imagine in 10, 15, 20 years where things are going to be? I just don't think it's going to go down.

We can look at other countries like Canada and we can look at other countries like Australia and just say how it's just become so difficult for people to buy a home. So, if you're passionate about that and your family, you could start early and just start compounding that wealth to help your kids have that choice. And again, if you use something like a UTMA or kids brokerage account and they decide they don't want to be a homeowner, then they can use it for something else. They can use it to start that business. They can use it for a killer wedding. I don't know, whatever you want to use your money for when you're older on. So you're talking about investing.

How involved are your children with actually making these investing decisions? Because we can talk about buying a can of beans at the grocery store, and that's super helpful. And we can talk about how to spend your money according to your values and give. And all of these things are super important. I'm also thinking like, I like the first time I honestly looked at like investing, I was probably in my early 20s with my dad still. But like, that was the time that I was understanding investing. And that was maybe even like later than, than probably, I don't know, wise.

Talk to me about, are they sitting down and picking funds with you? What does that look like? I think at the age my kids are, and I'll just, for everybody, they're 11 and 9 right now. So they're sort of in that middle school, late elementary school. At this point in their lives, all I want them to know is the concept of investing and why we do it. We invest for really big things. And that's it.

Not for stock trading to try to get rich next week or to buy and sell and try to get the next meme stock or whatever. It's for really big things in the future. It's for college, homeownership, and retirement. And maybe, whatever, there might be some other big things in there that you might want to consider. But at this point, all I really want them to know, it's for big things. That being said, I have, because I'm a money nerd, I like to talk with my daughter on our podcast about compound interest and investing.

And hopefully, these little nuggets start to seep in. And I show her a compound interest calculator and say, hey, Zoe, if we put in $250 each month, this is going to be this amount of money in the future in 50 years. Isn't this incredible? And then you see the chart grow. And then she goes, well, why does it take so long? What about three years? And we had this exact conversation on the podcast. And then I showed her what three years looked like. She goes, oh, well, that doesn't make sense. So those type of little conversations where it's like, okay, I need to do this for a really long time, but it'll have this big payout. I think those are the lessons I'm trying to seep in. conversations specifically around funds, how to diversify things, how to make this easy, how to automate the process so you don't have to be thinking about it all the time.

Those are better conversations to have in their teen years. Randomly, I don't know why, I was listening to my own audiobook, which I sometimes do. Awesome. I do it to like, I wrote a whole book and something about like, I don't know, I just do it when I need a little pick- up after like somebody's been mean on the internet. And you were kind enough to be featured in our chapter about living a financial feminist lifestyle, about how to like set goals and how to have these conversations. And literally, I listened to your section the other day.

And one of the things that you were talking about with me, which would have been, oh gosh, probably almost two years ago now by the time when we actually did the interview, you and Nicole were talking about specifically this feeling of like, I was pursuing financial independence so hard. And I was focused on the math and she was focused on the emotions. And we got to a point where, you know, we realized it wasn't so much about the math. It was about this freedom of time or freedom of choice. Can you talk to me a bit about how you came to that as a couple? And also, how do we start having conversations with kids to get them to understand that money can be a tool to build a life that they want, whatever that might look like, that it isn't necessarily like, it is the compound interest, right? That's sexy and exciting.

But it's also about what all of those things can buy you or bring you in terms of how your life develops. I think that's great. Yeah. And it reminds me of some of the conversations I had early on in my relationship with Nicole. I would talk to her about numbers-focused things like compound interest and debt and pay off the debt or grow the net worth or things like compound interest and debt and pay off the debt or grow the net worth or things like that.

And I would always just see her eyes gloss over and be like, I don't care what you're saying right now. But when I would talk about, okay, if we're able to do these types of things, this means part-time work or this means you're able to be a stay-at-home mom like you want to do, then those conversations would happen a little bit better. So to your point, how do we transition those types of conversations to our kids? I think it's got to be around the goals of investing and saving and giving as opposed to the specific names of the accounts or the dollar amounts. It has to go back to a purpose because I think for so long, I would build up my

wealth or build up my accounts and be like, I'm proud that they are a large amount. But after you'd get to that point, I'd be like, well, I don't know. It's just a number. It really is. But what does it provide you? What does it provide me? I love talking about Coastfire because it's an amount of money built up in your retirement investment accounts where you can stop or dial things back at least and say, this amount's going to grow to be plenty by the time I retire. Now, that's a numbers-focused statement, but the emotional statement is, I can spend a lot less on investing now. I can work fewer hours. I can spend more time less on investing now. I can work fewer hours. I can spend more time concentrating on my health. I can spend more time with my aging parents. I can spend more time being active in my community. I can spend more time giving to causes that mean a lot to me. So it sort of dials back

to the emotional payoff, the emotional wealth that you get from making these financial decisions. As we're talking about saving for college and college being astronomically expensive, I graduated fairly recently. I graduated college in 2016 with just the sticker price of like, you know, no aid, no merit scholarships. I think my college, my private university hovered right around 50K a year. I just looked recently. I mean, what, we're seven years from that time. It now costs an additional, I think, 15, maybe 20K more. an additional, I think, 15, maybe 20K more. We're also talking about homeownership being barely, arguably not accessible for us. And then also thinking about how we set up our kids for potentially buying homes. Post-pandemic or as we're transitioning through the pandemic, the future of work has largely changed. It's less 9 to five corporate job and it's more of the gig economy or more entrepreneurship. And so a lot of things are changing. And I imagine you hear this from your followers as well, but even followers that, you know, and community members that we have, we know from statistics that, and talking with them, that a lot of them don't even want to save

for their own retirement because they don't think that like it's even going to happen like with climate change and with everything that's going on it's like i won't even have a world to live on so why should i save for retirement and i am not a parent but i can also imagine thinking if i'm trying to deal with all of these things financially for myself and i'm struggling with that how are my kids even going to do this? Now, this is a problem to ask an economist, you know, who knows maybe more than you and I, but like, how are you thinking about that just emotionally? Because I imagine like, again, if you're feeling like I'm already financially struggling, colleges are expensive right now, houses are already expensive, inflation's really high, the work, even like how we're making money is changing.

How do i even think about if a 529 is even going to be relevant if you know one of these accounts is even going to help protect my kids in 5 10 20 30 years i i like i i love the conversation because i do think about that and yes i'm not an economist but i love listening to economists and having their conversations i would say it reminds me of a similar conversation when you just feel overwhelmed about your personal finances in general, where you're just like, there are so many things that I'm hearing, or I've listened to all these podcasts about all the stuff I'm supposed to do, and it just feels overwhelming, right? So you do nothing. So you're

just like, I'm just going to sit down and catch up on some more Netflix. I love Netflix, by the way. No bashing on Netflix. Yeah. But what I would say to that is that all we can do is just take these small micro steps that we can and move towards the area that we want to go. Are we going to be able to make our kids millionaires? Maybe not. You know what? Are we going to be able to make our kids millionaires?

Maybe not. You know what? But we can make these tiny steps to take care of our personal financial situation and make sure that we're secure. And then when we feel that security, then we can give back to our kids. So don't feel the pressure, especially if you're a parent listening right now, that you have to do all these things. You don't. You really need to take care of your financial situation and make sure you feel that strength. So in the beginning, that's as much as just putting some money away in the bank so you

feel some security, some autonomy, some ability to not say you have to go to a job that kills you. You have some money in the bank because that financial confidence and that financial strength can really give you the autonomy to make choices that are best for you and your family. So taking care of that, getting rid of some of the horrible consumer debt, the 20%, 25% credit card debt that some of us are experiencing, and just making those steps. So you start to feel some of that security, and then you get to strength personally. Then you can think about helping out your kids. These are not all requirements for you to do as a parent. Take care of yourself first. And then in the process, show your kids how you're taking care of yourselves. Communicate with them about the process so that they get inspired.

Because the real wealth that you might be imparting in that moment is the knowledge that they're gaining watching you win with your money. I so appreciate you saying that because, yeah, you might not be able to literally put money away for your kids in the future, right? You might just be trying to figure out your own money, trying to figure out how to protect yourself, and then feeling that guilt of like, oh, am I doing enough? But to your point, the actual wealth is in the information and is in the knowledge. We were talking before we started recording that we get messages from people who are like, you know, my family member, you know, bought these treasury bonds for me, or, you know, I do have, you know, some money

in an investing account, but A, they have no idea what to do with it because no one sat down and told them what it was or told them how it worked. Or two, you were saying like they have this money invested because somebody else did it, but they're also in credit card debt or they don't have an emergency fund or they're making poor spending choices because again, nobody's fault, but like no one sat down with them to teach them about money. So yeah, if you are a parent who's like, yeah, I'm overwhelmed. I want to do this. And also it feels so inaccessible. This is back to the education and back to the teaching. I think that is so crucial because that is something that you can do regardless of how much money you have, regardless of your financial standing.

I agree. And when we're giving that knowledge to our kids, the good thing is they're going to go to college. They're going to learn how to be big earners and make a lot of money. Then they can do all these great things to help them build wealth. Really, the knowledge that you're giving them and the ability to go to college to earn a lot more is going to help them to become millionaires. And I guess all drains lead to the ocean where it's like imperfect action, right? It's like, again, I hear from a lot of millennials, like, why would I save for retirement if there isn't going to be an earth at all?

And I'm like, well, you could be right. And yeah, it's not looking great, but we hope there's still an earth and wouldn't it be great to have some money as opposed to realizing, oh, I should have, I had the opportunity to do this, you know, 30 years ago and then I didn't. Yes. I really hope there is an earth and I I have heard that before. It's not, it's not just you. I think there's a lot of people that are just saying, is it worth it? I mean, 40 years from now, who knows what the, what the world's going to be like, but, oh man, I better be prepared when things, when things are maybe going to a very unstable state. You know, if there is a zombie apocalypse, if there is a zombie apocalypse, i am okay having some money to

right right right right so even if that is like even if you're right and we don't have an earth maybe i get it i i have enough money or at least some money to get me somewhere else like okay great you know how much are those tickets for that uh that with Elon Musk? They're going to be very expensive. Right. I don't know the stat. I wish I did off the top of my head. It is something like, Andy, it's staggering. It's like 30% to 40% of millennials, that's the number one reason they're not saving for retirement.

Wow. It's like, I don't have money. And then also, there's not going to be anything. So why would I do this? I mean, I get it. I really get it. And what's also changing is a bit of the definition of retirement too. I mean, if we're talking about trying to find work that... Yes. Ooh, talk to me about that.

Well, I've been just thinking about it a lot lately. I think if we're trying to change the definition of like, well, build millions and millions of dollars in your account, and then you can stop retiring altogether at 59 and a half and then sit on a couch. It's been proven that people live longer and happier lives when they have a sense of purpose. I love this Japanese term, the ikigai, where you talk about where you can continue having this purpose throughout your life. It's doing something that gives you purpose, that people pay you money for, there's actually a need for it that will give you the longevity to want to keep going on in your every day. I mean, the last thing that a lot of people want to do is just stop the movement, stop the progress. That being said, don't work in a

job that you hate forever, but maybe there's a way that you can make that transition to being a business owner or owning more of your time, doing less work that you don't like so that your retirement date can continue evolving or moving forward. And God willing, you're doing something that you really enjoy until your last day. Right. And redefining, again, with your point of like, you know, okay, at this certain age, I'm never working again and I'm sitting on a beach. And also, typically, like those are your years where your health is declining. And,

you know, you don't have a lot of the flexibility, literal, like bodily flexibility, but also just like, you know, like to go and travel or hike or like take care of yourself. I've talked about this on the show before. My best friend, Christine, she took a year-long sabbatical. She saved up enough money, and then she just quit her job for a year. And she was like, I'm going to go travel. I'm going to work on a screenplay. I've had a really, really rough couple years. And I'm going to save enough money where I can do that.

And now she's back working. She found a better job that pays her more. And she took that time away. I think for you and I, we have versions of this where it was like, okay, I don't want to work a corporate job anymore. I want to have some more flexibility. I mean, arguably I work way more now than I did in my corporate job, but at least I'm working for myself and I have the sense of purpose that I didn't maybe have working for somebody else. And so I think even, yeah, these definitions of things like retirement or generational wealth,

we have this very stereotypical idea of what these things are like generational wealth. Like we have this very like stereotypical idea of what these things are because it's the way we've always done it. But the world is changing so quickly and our wants and needs change so quickly. And with all of the systemic issues in all of this, I think that there is something so liberating about finding whatever definition makes sense for you and your family for words like generational wealth or phrases like generational wealth or financial independence, retire early. Absolutely. Yeah. The hard definitions of those things, I think that that needs to go out the window. I think having the flexibility to design it how you want and carve it for your own unique

ability. I think what we're talking about is just financial options, putting money aside to help you have options because you know what is the only consistent thing ever is change. Because you're going to change your mind in three or four years or five years or two decades from now. But when you do change your mind, it'll be nice to have a little bit of money there to help with that change and also to allow you just to breathe. You talked about your friend that took that time off. That is so beautiful to be able to say, I just need a moment to reassess what I want to be doing with my life or do more things that I enjoy. If you pool up a bunch of money in your savings account that's accessible, that'll allow you to do that, good for you. That's a win. That's more

than a win than retirement itself, I believe. And I will ask her if I can include this before I do. But one of the things too that I think was so cool that I would actually love your thoughts on, I didn't even expect to ask you about this. Christine's parents, she has herself and her brother, they are giving her and her brother their inheritance every single year while they're still alive. I love that. So they're saying like, hey, as opposed to leaving you this money when we die and you're also older, we are going to give you a portion of that every single year and you get to choose what to do with it. And for her, that was that went into her like sabbatical fund where, you

know, she was like, okay, I'm younger. I would rather have this money now than, you know, getting it when I'm older. And I'm probably also better like financially, I need this money now. This money is more flexible to me now that I'm younger. And like, even that is a really interesting way of setting your kids up for success that I think is very unconventional. I like that a lot. I kind of fell into that book, Die With Zero, and I love that concept of utilizing the money that we have now on earth to enjoy with our family. And then if you say, well, what about the kids? Well, they should have the wealth. It's like, give it to them now. Make the experiences with them now. Help the causes that you want to help now. Utilize that money so you're not dying with millions of dollars, but you're utilizing it in a way that creates those experiences, those memories, those positive experiences and memories with your kids today. And I love that your friend was able to experience that. Yeah. If I'm someone who wants to learn more about investing for my kid's future,

for setting them up for success, for building their financial literacy, for having these conversations with them, where do I turn? Yes. Well, I'm very happy to have developed a course called Make My Kid a Millionaire. I'm very, very excited about it.

I worked on it for about a year. And you know, as a book developer, these types of content pieces, they don't come easy. So I'm very happy that I poured my heart and soul into this one and put it out there. It is a 10-step course to help parents build generational wealth and happiness for their kids.

And as we talked about a lot on the show, the first step in there is to put your own financial oxygen mask on first to make sure that you are secure. So I do have some lessons in there as well. Now, if you're interested in checking it out, I've got a free resource that's essentially like a 10-minute segment of the course, try it before you buy it kind of thing at marriagekidsandmoney.com slash Tori. It defines my definition of 60-40 generational wealth and how you guys can provide that for your children. So again, marriagekidsandmoney.com slash Tori. And we tend to not have people on the show who we don't respect and love.

So this is testimonial in and of itself. But I have been following your journey and we've been friends for years now. And I love everything you create. And especially, again, we've said this before, I am not a parent. I have a lot of expertise as a financial expert and as a daughter of financially minded parents, but I'm not the person to teach you this.

And I'm the first person to say, like, if you have questions about a 529, I'm probably not the best person to talk to. Andy is a really good person to talk to and a really good person to learn from. And it's so much work putting all of the content out. So thank you. And I'm really excited for people to experience it and to get this really, really necessary

education for themselves, for their families, and for their kids. Thank you, Tori. And thank you for having me back on. It's been an honor to talk to you again. Always. Thanks for being here. Thank you so much to Andy for coming back on the show. He has an incredible course called

Make My Kid a Millionaire. It's all about how to build and protect generational wealth for your kids, about how to literally protect their money, but also help kids learn how to make their own money, how to teach teenagers to invest on their own, how to make sure that your kids are set up financially for success, but also you're set up financially for success. And if you're interested in that, it truly is so fantastic. We have a link below and a link in the show notes to get more information. Thank you as always for being here, Financial Feminists. We love you. We appreciate you. Thanks for being here. We'll talk to you soon. Appreciate you.

Thanks for being here. We'll talk to you soon. Thank you for listening to Financial Feminist, a Her First 100K podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristen Fields, associate producer, Tamisha Grant, marketing and administration by Karina Patel,

Sophia Cohen, Khalil Dumas, Elizabeth McCumber, Beth Bowen, Amanda Lefeu, M First 100K, our guests, and episode show notes, visit financialfeministpodcast.com.