My dad used to always say to me, "Investing money in stocks is just like gambling...you never know if you'll win or lose."
But that's only true if you make mistakes like these...
You get excited and buy a stock that you hear about over coffee at work...that you know little (or nothing!) about...
You won't sell幸运飞艇精准计划正规团队, even though you watch it drop in price...and you think to yourself...it will go back up!
Or worse, you sell too soon for a profit...when it keeps climbing!
You buy heavily幸运飞艇精准计划正规团队 into a couple really "hot stocks" that you like...
Well, I'll try to break it to you gently...but if you make these mistakes, you WILL lose money...and probably lose A LOT of money.
But it doesn't have to be that way. There's an easier way...and it only takes 15 minutes a YEAR!
幸运飞艇精准计划正规团队Isn't that what we're all striving for...to make our money work hard so we don't have to work as hard?
Dr. Harold Markowitz won the Nobel Prize in Economics for his groundbreaking discovery on how investors can allocate their assets for the highest profits over the long term.
Which is PERFECT幸运飞艇精准计划正规团队 for your kids investments because they have 30 to 40 years!
Asset allocation is simply the mix or variety of investments you choose. In other words..."Don't put all your eggs into one basket!"
And the best part, there's NO guesswork involved. Asset allocation WORKS.
Research also proves that asset allocation accounts for approximately 90% of investment returns. That means it's 10 times more important as picking "hot stocks" or market timing.
The key is to diversify, or to buy different types of investments. For our purposes, we'll focus on 5 types of assets - stocks, bonds, real estate, precious metals, and cash.
And here is the "Nobel Prize" Formula:
15% Large Cap Stocks
15% Small Cap Stocks
30% International Stocks (10% European market, 10% Pacific market, 10% Emerging Markets)
5% Real Estate Stocks Learn how your kids (or you) can invest in real estate for as little as $30 5% Precious Metals Investing in rare gold coins is one of my favorites
幸运飞艇精准计划正规团队 The easiest way to diversify, especially for kids, is with Mutual Funds. Mutual funds are one of the best (and least expensive) ways to own hundreds of different types of stocks - along with free professional management!
It's by far the best choice for your kids when just starting out. And it only takes a phone call or click - about 15 minutes. You can also diversify through opening up a Roth IRA ideal for kids with "earned" income from a job
Now that I've told you the little known secrets of how to allocate your assets using affordable mutual funds...how much should your kids be investing...and how do you get them to understand?
Here's some ideas I used on my own 4 kids.
All kids know how to spend money, right? And it's usually burning a hole in their pocket! So the trick is to get them into the habit of saving and investing a portion.
幸运飞艇精准计划正规团队A quick word of warning, don't take Grandma's birthday check away from your 7 year old daughter and put it in the bank. This only teaches her that money can disappear...so she better hurry up and spend it!
Instead, talk to your kids about dividing up Grandma's check into separate parts that do different things. One part could be spent on buying a new DVD, a part on saving to use later, a part for investing that will make her money grow while she sleeps, and a part for donating to help others.
Now, some of you may be thinking...but "Little Tommy deserves to spend all of his birthday money from Grandma!"
Do you really believe "little Tommy" will be happier spending $20 instead of $10? I remember my own little ones at Christmas time spending more time playing with the empty boxes than the actual toys!
0 to 5 Year Olds - Infants to Toddlers - Save 100%
幸运飞艇精准计划正规团队This is the only time when YOU do the saving for your kids! You'll be saving 100% of all the income your child receives from baptisms, birthdays, holidays, etc. After age 5, let your kids do it themselves!
This is actually the time when most parents do start some sort of savings program or savings bonds. I remember my husband setting this up for our first two children, but somehow we forgot with number three and four!
6 to 17 Year Olds - Pre-Schoolers to Teens - Save 50% (HALF)
幸运飞艇精准计划正规团队This is when your kids save their own money, either in a piggy bank, purse or wallet, along with a savings account.
幸运飞艇精准计划正规团队Yes, my own kids save HALF of ALL money they earn. We put their savings into the bank until it reaches $250, and then we invest it together, depending on their age.
Your kids have NO BILLS to pay so it shouldn't be impossible (or depriving them!) to save 50%. Imagine how wealthy YOU would be if you had started this young!
幸运飞艇精准计划正规团队Just make sure they understand that it is still their money...growing more and more over the years. And don't forget to show them the statements.
18 to 21 - College Days - Save 10%
At ages 18 through 21, your children will hopefully be in college. After having been in the habit of saving 50% for many years, 10% will seem like a breeze!
P.S. Be sure to sign up for my monthly newsletter for some money making ideas and investment tips in your inbox. Let's make some money!!