Got kids? here are some wealth strategies that could pique your interest!
With each piece of content we put out, we try to deliver items of value. Information from our professional worlds that we can translate and pass off to folks who are interested in building wealth through Real Estate. And if we're speaking of kids graduating...let's talk about a few strategies we've put together to help you start your kids off on a wealth building foot. With the help of our frequently referenced mortgage broker we love, Michael Leland, here are some great places to start:
Strategy 1
Didn't I just mention it's the season of graduation? Well, if any of you have kids who will be going away to college, you may have considered this already. Could you buy a home for the kid and a few of their friends to live in? The housing costs for college kids these days is bonkers. We all know that. It's also pretty safe to assume most college campuses/towns have pretty high rents for dorms/apartments/houses. Buying a home would combat this. Don't forget that we have a lot of Realtor connections across the US so don't hesitate to reach out for that connection so you can explore more with a local expert. AND as a bonus, you could add the kid to the mortgage on that home, which would help immensely with their credit score and history.
Strategy 2
Borrowed from Michael's testimony: "One of the best financial moves we made with our 3 kids was allowing them to build a “mutual fund” at an early age. They had each saved up a few thousand dollars from allowance, birthday money, etc. My wife and I agreed to match their initial investment into their mutual fund. They each picked 3-4 stocks (not so shockingly, they chose well-known companies like Apple, Nike, Amazon, etc.), and have let those stocks/funds sit there for 10+ years. All 3 kids have seen their money grow considerably during this time frame. More importantly, they’ve learned the power of compounding interest and the time value of money."
Strategy 3
Part of parenting is to help guide your child down good paths, right? Well, one of the frequently forgotten paths is helping them build strong finances and credit score. The sooner your kids establish a credit score, the sooner they can qualify for the best possible rates, loans, etc. when it’s time for them to start making big ticket purchases. Believe it or not, the mortgage industry frowns upon folks who don’t have a credit score, and those folks typically have to accept a higher interest rate on any mortgage they secure. (This makes absolutely no sense IMHO, but it’s the system in which we operate.)
Assuming you have a credit card that has a perfect payment history and gets paid off each month, adding your kids as authorized users on that card will help them establish a good credit score now. All you have to do is contact the credit card company, and let them know you’d like to do this.
Talk soon,
Amy, Kristine and Margo - The Place Portland Team