Want to put your kid on road to Millionaire Row by 21? Here’s how…

While some youngsters long to become rock stars or Hollywood heavyweights, others now gravitate towards another stripe of pop-cultural celebrity: the whiz kid who becomes a millionaire before age 21.

That’s not hard to fathom now, given the likes of Facebook’s Mark Zuckerberg and other tech hotshots. But for Susan Beacham — founder of Money Savvy Generation — steady strokes and ingrained habits set kids on the course to riches. And Beacham should know: She practices what she preaches with her two teenage daughters, Allison, 19, and Amanda, 17.

“If you know how to behave like a millionaire by the time you’re 21, you may not have the cool million in hand, but you’ll be on your way,” says Beacham, whose Chicago-area company develops products that teach basic personal finance skills to school-age children. “You’ll have the seed money and have established the good behaviors.”

What follows are five key tips from Beacham, wealth management experts and at least one tyke tycoon who made his first million as a teen. Follow them and chances are excellent your child will have the tools he or she needs to make a million — along with a good chunk of starter funds to boot.

Delay gratification
Kids learn early on to spend and enjoy the fruits of consumer society. But Beacham says wealth builders master their urges and live modestly. She cites a study of 1,000 kids published by the National Academy of Sciences that followed children from birth to age 32. The most impulsive “were roughly three times as likely by adulthood to report multiple health problems and addictions, earning less than $20,000 a year, becoming a single parent or committing a crime.”

“Self-control is the key to wealth,” Beacham says. “And the good news for those of us who have kids who weren’t born with the ability to delay gratification is that self-control can be learned.”

“Warren Buffet wasn’t a millionaire by age 21,” Beacham says, “but by the time he finished college, he’d accumulated more than $90,000 in savings, measured in 2009 dollars.” Buffett was a hard worker, and by this Beacham doesn’t mean to get a mind-numbing job, but rather to learn the ropes of wealth — especially as an apprentice or entrepreneur.

Jonathan Koon exemplifies this. The licensing and fashion marvel, now 27, made his first million at 16. Today he’s the owner and designer of the Private Stock denim line, among other ventures. “If you sleep, all you can do is dream,” Koon says. ”For those who make it, hard work and devotion are as essential as food and water. Never get lazy and always stay proactive; never be satisfied and always strive to continuously learn and get better.”

Save money
Beacham’s model for financial success (as illustrated by her Money Savvy Pig, a savings bank for kids) is four-fold: allocate funds not just to spend, but also to save, invest and donate. “Show your kids how to save and invest what they earn,” she says. “Explain that they can invest in themselves by investing in their own business.  Maybe that means getting a job to earn the dough to fund a blog they write, launch a website they create, or just to buy the lemons, sugar and cups you use to buy and sell lemonade. Maybe it means buying a share of stock in a company you believe in.”

Saving involves reallocating funds from wasteful spending into more productive directions. Kurt Rozman, president and senior financial adviser at Rozman Wealth Management in Brookfield, Wisconsin, calculates that $5 saved on cigarettes or coffee per day equals about $1.2 million over 42 years, given a 10 percent interest rate. “The compounding of wealth into a million dollars is not an overnight event,” Rozman says. “Most of life’s successes come from the incremental progression of small, successful choices.”

Live well beneath your means
Here’s where parents with high hopes can model the behavior they want to see. Beacham says to give your kids an allowance and teach them how to manage it. “Do not pay for everything,” she says. “Give them a nut to crack.  Kids get much more creative when they are in charge of the bill. They get frugal and are forced to make choices. When you pay, they stop thinking.”

“I always tell my kids that credit is a privilege, not a right and that 10 percent of what you earn belongs to your future,” says Anthony Blair, president and CEO of Agrandar Associates Inc. in Phoenix, Arizona. “If they keep these things in mind, there’s no reason why they won’t be able to retire millionaires.”

Beacham describes how her elder daughter uses a paper and pen to make a budget: “As a result of having skin in the game, and being responsible for her expenses and sorority dues, she sent an email to the chapter president to inquire about financial aid for students who pay their own dues.”

That kind of smart thinking only comes from budgeting, and as kids learn to budget their personal finances, they’ll gain savvy for business success. “It’s important to set projections and budgets, make outlines along with time and action calendars,” Koon says. “Your dreams and aspirations are meant to be in the air, but your business and your money must be safely grounded.”

Though a teenage millionaire, Koon emphasizes a healthy dose of patience: “Success can’t be rushed. Straight and steady always wins the race.”


By Lou Carlozo

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