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November 24, 2021
Another gift guide? Yep! But, this one is focused on long term financial success and retirement happiness — not cool gadgets and warm sweaters — for everyone on your list, young and old.
Let’s say that you have a child who is 10 years old, and you invest $2,500 in an index fund for them this holiday and are able to add $500 every year until they are 25. If they were to earn a 10% return (the long term average for the S&P) on that money, they would have accumulated $26,329 — a rather tidy sum — that could help them buy a house or just keep growing through retirement.
And, you would be teaching them valuable lessons about saving and investing over the long haul.
A 529 college savings plan enables you to save for a child’s education on a tax-advantaged basis. Earnings in a 529 plan are not taxed currently and may be withdrawn if they are used for qualified colleges, universities, and graduate schools in the United States.
Some of the pros and cons to 529 plans include:
If your children or grandchildren have earned income and you want to give them money, it is really worthwhile to gift them the money into a Roth IRA account.
Sure, they are young and retirement is the farthest thing from their mind, but a Roth IRA grows tax free and most financial experts agree that a Roth IRA offers the best opportunity for increasing their long term wealth.
You are allowed to contribute any amount up to the total the child earned for the tax year. They must either have a W-2 or, if they work at odd jobs like babysitting, then they simply need to file their own tax return with the IRS.
If you are reading this article, you are probably a user of the NewRetirement Retirement Planner. A number of users have said that they have sat down with their children, grandchildren, nieces and nephews and have helped them set up a retirement plan — as early as age 15.
One person said, “My 15 year old nephew created a retirement plan on NewRetirement. He ran scenarios on his salary at 25, savings rates, buying a house and more. I don’t know if he was dreaming big or being totally unrealistic when he input a $25k/month income at age 25, but he was clearly having fun and seeing the power money can give him.”
Make long term planning real for the young people in your life by helping them set up a real plan and encourage them to update it quarterly!
Want to spend as little as $25? Are you interested in teaching your loved one about money, the world and doing good?
You could give them a Kiva gift card. Kiva is a microlending platform that makes small loans to help people in developing countries improve their lives. With a gift card, you can browse the Kiva site and select a cause to support in hundreds of different countries and industries.
Over time, each lender is repaid and can use the money to make new loans to help fund other causes.
The classic real estate building empire game is going strong. You can go with the classic game. Or, try the Fortnite, Star Wars, National Parks, Elf or almost limitless other variations.
Pay Day is great for social interaction and a game that parents and children can play on a relatively even level. Simple and quick, a two lap game takes as little as 15 minutes. Players can make deals on property and earn money. They can save and make loans. The object is to have the most money at the end of the game.
From guru Dave Ramsey comes Financial Peace Junior. It is a kit designed to help you teach your kids about money. It’s packed with tools, resources and step-by-step instructions for parents. The lessons of working, giving, saving and spending are brought to life through fun stories in the activity book, and kids will love tracking their progress on the dry-erase boards. “Financial Peace Junior doesn’t just give you the tools to teach your kids to win with money―it shows you how.”
The Money Savvy Pig is an award-winning children’s piggy bank that has four different slots — one for saving, one for spending, another for donating and the fourth for investing.
Cash Flow for Kids is designed by the author of the popular self-help book, Rich Dad Poor Dad, Robert Kiyosaki. It is a bit expensive, but teaches real world financial skills in a fun way. Kids will catch on fast and they’ll soon be at ease with balance sheets, assets and liabilities.
We are big believers in learning through doing. And, by giving your teen or tween a debit or credit card, you will be teaching them as well as making you a great gift giver!
Just make sure that the child understands the rules associated with the card and be sure to set aside time each month to assess the purchases made with the card and to have them be involved in paying off the balance — in full — each month. However, do show them the amount of interest they would be paying if it were not paid off.
Needing control? Greenlight is a kids debit card that enables you to control where money can be spent and you get a notification immediately about all purchases.
Want to encourage thinking about how to solve problems in the world for better financial lives for all? Try this book: The Boy Who Harnessed the Wind by William Kamkwamba. There is also a young readers and a picture book edition.
It is a remarkable true story about human inventiveness and its power to overcome crippling adversity. It will inspire anyone who doubts the power of one individual’s ability to change his community and kiva
better the lives of those around him.
There are lots of great books for helping tweens and teens learn about money. Here are some great options for all kinds of readers:
Want the kids to learn about the stock market and risk? Try The Stock Exchange Game.
Think of each trip around the board as a year in your life. Investing with the goal of how to retire. Early in the game, purchase risky assets with higher returns, then later in the game sell the risky stocks for safer, more stable investments. “Wheel and Deal” buying and selling stocks to flip profit into more money! The investor to retire with the most assets wins!
We all talk a lot about money, but the really precious resource is actually time. Having more time to do what you really want to do is what improves lives! Showing your family this value is as critical as teaching them to save their money.
So, maybe think about a gift that could give the recipient more time? A monthly housecleaner? A meal delivery service? A baby sitter?
What is a task that they don’t love doing that you could help outsource for them?
On the subject of time, giving experiences is a great gift idea. What is something you can gift that they will enjoy? Is it something you can enjoy doing together?
Experiences are scientifically proven to be more emotionally engaging and memorable that something easily wrapped up and tied with a bow.
There are so many great books related to effective investing, retirement planning and living and aging well.
Here are some of our current favorites:
The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life by JL Collins: This book has fast become a classic.
Advice from My 80-Year-Old-Self by Susan O’Malley: What advice would your 80-year-old self give to you? That is the question artist Susan O’Malley asked of more than 100 people from all walks of life – young and old.
Happy Money, The Japanese Art of Making Peace with Your Money by Ken Honda: Too often, money is a source of fear, stress, and anger. Honda teaches the reader how to treat money as a welcome guest, allowing it to come and go with respect and without resentment.
Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman: Time is our most precious resource. Drawing on the insights of both ancient and contemporary philosophers, psychologists, and spiritual teachers, Oliver Burkeman delivers an entertaining, humorous, practical, and ultimately profound guide to time and time management.
The 7 Habits of Highly Effective People, Stephen R. Covey: Stephen R. Covey’s book, The 7 Habits of Highly Effective People, has been a top seller for the simple reason that it ignores trends and pop psychology for proven principles of fairness, integrity, honesty, and human dignity.
The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich: This book has been the guide to thousands who want to retire early, very early.
The Intelligent Investor: This is a classic that focuses on a strategy of loss minimization over profit maximization.
The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness: Doing well doesn’t actually have much to do with what you know. People who are good with money have better habits, which are hard to teach, even to really, really smart people. Listen to Housel’s most recent interview about the book on the NewRetirement Podcast. (Or, tune into his first appearance on the show where he talked about millennials and a $30 trillion wealth transfer that may transform our future.
Mindset: The New Psycology of Success: After decades of research, world-renowned Stanford University psychologist Carol S. Dweck, Ph.D., discovered a simple but groundbreaking idea: the power of mindset. In this brilliant book, she shows how success in school, work, sports, the arts, and almost every area of human endeavor can be dramatically influenced by how we think about our talents and abilities.
Think and Grow Rich by Napoleon Hill: Think and Grow Rich has been called the “Granddaddy of All Motivational Literature.” It was the first book to boldly ask, “What makes a winner?”
The Bogleheads Guide to Investing: The fundamentals of sophisticated and smart retirement investing, kept simple.
Keep Sharp: Build a Better Brain at Any Age by Sanjay Gupta M.D.: Keep your brain young, healthy, and sharp with this science-driven guide to protecting your mind from decline by neurosurgeon and CNN chief medical correspondent Sanjay Gupta.
The Five Minute Journal: A Happier You in 5 Minutes a Day by Intelligent Change: Using the science of positive psychology to improve happiness, The Five Minute Journal focuses your attention on the good in your life. Improve your mental well-being and feel better every day.
I Feel Bad About My Neck: And Other Thoughts About Being a Woman, Nora Ephron: From the writer of some of our most beloved romantic comedies and numerous books comes an uproarious tale about life as a woman of a certain age.
The Blue Zones Kitchen: 100 Recipes to Live to 100, Dan Buettner: Building on decades of research, longevity expert Dan Buettner has gathered 100 recipes inspired by the Blue Zones, home to the healthiest and happiest communities in the world.
Lifespan: Why We Age — and Why We Don’t Have To, David A. Sinclair: Through a page-turning narrative, Dr. Sinclair invites you into the process of scientific discovery and reveals the emerging technologies and simple lifestyle changes—such as intermittent fasting, cold exposure, exercising with the right intensity, and eating less meat—that have been shown to help us live younger and healthier for longer.
You Are a Badass, How to Stop Doubting Your Greatness and Start Living an Awesome Life by Jen Sincero: Twenty seven quick chapters with funny stories, sage advice, easy exercises, and the occasional swear word, helping you to create a life you totally love.
The Happiness Curve: Why Life Gets Better After 50, Jonathan Rauch: Research suggests that happiness slumps in midlife. Full of insight and data, The Happiness Curve features many ways to endure the slump and avoid its perils and traps.
10% Happier Revised Edition: How I Tamed the Voice in My Head, Reduced Stress Without Losing My Edge, and Found Self-Help That Actually Works–A True Story by Dan Harris: The science supporting the health benefits of meditation continues to grow as does the number of Americans who count themselves as practitioners but, it took reading 10% HAPPIER to make me actually want to give it a try.
The Subtle Art of Not Giving a F*ck by Mark Manson: Maybe try the millenial self help guide from a superstar blogger who shows how to stop trying to be positive all the time so that we can truly become better, happier people.
The Bullet Journal Method: Track the Past, Order the Present, Design the Future by Ryder Carroll: Organize your thoughts and focus on what is meaningful to you.
A Random Walk down Wall Street: The Time-tested Strategy for Successful Investing: This is considered the one book you really need to read if you want to manage your own investments.
Successful Aging: A Neuroscientist Explores the Power and Potential of Our Lives by Daniel J. Levitin: Levitin argues that aging isn’t a process of decay but a third stage of development.
Life Part Two: Seven Keys to Awakening with Purpose and Joy as You Age by David Chernikoff: What Carl Jung called “the second half of life” has the potential to be a remarkable curriculum for insight and awakening. When wisely understood, the changes inherent in the aging process become stepping-stones to the actualization of our best human qualities: wisdom, lovingkindness, compassion, joy, and equanimity.
Research indicates that consumers expect to spend more on holiday gifting in 2021 than last year.
Spending will be focused on dining, personal care, and gift cards. And, people are shopping early because of anticipated shortages.
Whatever you do, be sure to think about your spending in terms of both the short and long term benefits. Every cent you spend on yourself and loved ones impacts your (and their) life now and all the way into your future.
Budget holiday purchases with an eye toward your monthly expenditures, but also your long term financial plan so that you can eventually have the ultimate stress free holiday — retirement! Use the NewRetirement Planner to help you assess how today’s spending will impact your future security.
For people who want clarity about their choices today and their financial security tomorrow, NewRetirement is a financial planning platform that gives people the ability to discover, design and manage personalized paths to a secure future.
Our goal is to make high quality low cost financial guidance available to everyone. More than 155,000 people representing more than $168 Billion in wealth currently trust the system to make the most of their money and time. The platform can be co-branded or white labeled for partners. Additionally, the company provides API access to companies who wish to embed planning functionality within their own site.
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