All Financial Matters posted a letter from a couple of financial-savvy parents to their daughter. I loved it and wanted to spread word of it around. These parents had $1,000 saved up for their daughter when she was 14, via her allowance. The letter details some investing and saving advice for their child.
Memorable quote
As you can see, when the interest rate doubled (from 5% to 10%), your earnings over a 51 year period grew by more than a factor of ten – from about $11,000 to about $128,000!!
Trivia: Albert Einstein discovered the Rule of 72.
3 comments:
Thanks for the mention!
I think their daughter is still a teenager. I think she was telling her daughter what she could have if she sticks to the plan.
JLP
AllFinancialMatters.com
I don't think parents should take it upon themselves to save their daughters money because they want her to be financially savvy. What responsibilities has the daughter learned about saving money if the parents do it for her? If she had the money would she save it herself or spend it? The letter is great though in explaining what investing money can result in. Just like the parents who buy their kids whatever they want and later wonder why they act the way they do, parents can overstep.
I got money for jobs I did around the house and made sure to save at least half of whatever I got. Usually I saved much more because I needed a pool of money to buy something I wanted. My brother would blow his money when he got it because it burned a hole in his pocket. I saved like crazy to go to college, and I'm glad I did because my student loans are much less than they could have been if I didn't.
Teach kids to save money and they will understand.
Well the letter does say that the money came out of her allowance. She probably does chores to earn her allowance.
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