The last 3 Springs we have gifted them their salaries. In other words, however much they earned the previous year (usually a few hundred dollars or less), we would match that amount and fund their Roth IRA accounts.

We opened the accounts their with much fanfare (it’s a great family friendly office). The head agent gave them each a (fake, of course) $1 Million dollar bill to remind them that they could have a million dollars tax free by continuing to fund their accounts.

The youngest just turned 13 and her older sister is 16. Both have just over $1,000 each in their Roth IRAs. It’s not much now but we’ll continue the practice at least through the end of high school. When we opened the account the younger child kept boasting about how she would forever be richer than her sister. Fed up, the older sibling finally asked why the younger one thought she’d be richer. Answer: compound interest. “I’m younger and have almost 4 more years to have compound interest work for me than you do.”

In case you are wondering. Yes, it is legal for kids to work in their parent’s business at so young an age. Their tasks are mostly clerical. They box up the files out at the end of the year, create new files for the new year, match receipts to statements, help reconcile bank & credit card statements, file, shred, reorder/put away books in our reference library, keep office dusted and vacuumed, etc.

…just kidding. Although, I do like to print off as many forms as I can and mail in the paper copies to file. They take my time to do fill out their tax forms, they can take the same amount of time to read my forms by hand.