Your Kids Are Growing Up. Is Their Money?

Monthly Money Man on April 24, 2026

There’s a photo on my phone I keep coming back to. My oldest, maybe three years old, grinning at the camera with ice cream on his chin sitting next to my nephew and not a care in the world. I look at it now and think: where did the time go?

If you’re a parent, you know the feeling. The days can drag, but the years sprint. And somewhere in the middle of school activities and the chaos we call life  and “Dad, will you play with me?” — time has a way of slipping past without you noticing.

Here’s what I’ve learned after years of helping friends and families manage their money: the clock ticking in the corner of your living room is also ticking in their portfolio. And one of the most powerful tools for fixing that — a Roth IRA for teenagers — is one almost nobody is using.Your kids are going to grow up whether their money is ready or not. The only question is whether you gave their money the same head start you’re trying to give them in other areas of their life.

A Quick Word About Time

If you caught last week’s article on compounding, you already know the secret: time is the most powerful ingredient in building wealth, and it’s the one thing you can’t buy more of. The earlier money goes to work, the less of it you need to get somewhere meaningful.

Which brings me to something most parents have never considered — and once you hear it, you won’t be able to unhear it.

Your teenager might have access to one of the best wealth-building tools in existence-a Roth IRA for teenagers and almost nobody is using it.

The Roth IRA for Teenagers Your Family Could Open This Year

Most people think of a Roth IRA as a retirement account for adults with careers. But here’s what the fine print actually says: any person with earned income can contribute to a Roth IRA. That includes your 15-year-old — as long as they have wages from a W-2 job or documented self-employment income like babysitting, tutoring, or lawn mowing reported on a tax return.

Here’s why that matters so much. A Roth IRA grows tax-free. Your child contributes after-tax dollars now — and never pays taxes on the growth. Ever. When they withdraw in retirement, it’s all theirs.

Now layer on the compounding math. A teenager who puts $1,000 into a Roth IRA at age 16 and earns a modest 7% average annual return will have — without ever adding another dollar — over $50,000 by retirement. That’s the runway no adult account can replicate. We simply don’t have it anymore.

The contribution limit is $7,500 per year in 2026, but it can’t exceed what your child actually earned. So if they make $2,000 this summer, they can contribute up to $2,000. And here’s a move a lot of parents make quietly: you can gift them the money to contribute, as long as the contribution doesn’t exceed their earned income. They did the work. You fund the future. Everyone wins.

One note: if your teen’s income is from informal work — babysitting, odd jobs, neighborhood gigs — make sure it’s being reported properly. When in doubt, a quick conversation with a CPA can save a headache later.

What About a 529?

A 529 plan is the other heavy hitter worth knowing about. It’s specifically designed for education expenses — think college tuition, room and board, even K-12 in some cases. Your contributions grow tax-free, and withdrawals are tax-free when used for qualified education costs. Many states even offer a tax deduction for contributing. It’s a powerful tool, and it deserves its own full article — which is coming. For now, just know it exists, it’s worth exploring if college is on your horizon, and it pairs beautifully with a Roth as part of a bigger picture for your child’s future.

Start Before the Next Photo

You’re going to take another picture this weekend, or next week, or at the next birthday party. And someday you’ll scroll back to it and feel that same bittersweet rush — when did that happen?

Before then, do one thing. Find out if your teenager has any earned income this year. If they do, look into opening a custodial Roth IRA-thats the version designed for minors-before the next contribution deadline. It doesn’t have to be perfect. It just has to start.

Summer job season is right around the corner. We’ll be talking about that in July — and when we do, you’ll already know exactly what to do with the money your kid brings home.

See you at the top.

[Call to Action] Does your teen have a summer job lined up? A Roth IRA could be the best thing that comes out of it. Start by looking into a custodial Roth IRA at any major brokerage — Fidelity, Schwab, and Vanguard all offer them with no minimums to open.

Time in the Market, Not Timing the Market

Monthly Money Man on April 17, 2026

One of the biggest mistakes I saw people make wasn’t about what they invested in. It was about when they started.

They’d wait for the “right time.” Wait for the market to drop. Wait until they understood everything. Wait until they had more money saved up.

And while they waited, years passed. And those years cost them more than any market timing strategy ever could have made them.

The Math That Changes Everything

Let me show you two people. Same income. Same investing goals. Different start dates.

Person A starts investing at age 22. Puts away $300 a month for 10 years, then stops completely at age 32. Never adds another dollar.

Person B waits until age 32 to start. Invests $300 a month for 30 years straight until retirement at 62.

Who ends up with more money at 62?

Person A: $1,072,000
Person B: $678,000

Person A invested for 10 years. Person B invested for 30 years. Person A put in $36,000 total. Person B put in $108,000 total.

Person A still wins. By nearly $400,000.

That’s the power of time in the market. (Assuming 10% average annual returns, which is the historical average for the S&P 500.)

Why This Happens: Compound Interest

Albert Einstein supposedly called compound interest “the eighth wonder of the world.” Whether he actually said it or not, the principle is real.

Your money doesn’t just grow. It grows on the growth. And then it grows on that growth. And then it grows on that growth.

The longer your money sits in the market, the more times it compounds. Early years are worth more than later years because they have more time to multiply.

That $300 Person A invested at age 22? It had 40 years to compound. The $300 Person B invested at age 32? Only 30 years.

Ten years doesn’t sound like much. But over decades, it’s the difference between over a million dollars and $678,000.

Time In the Market vs Timing the Market

Here’s what people try to do: wait for the market to drop, then invest when it’s “cheap.”

The problem? Nobody knows when that’s going to be.

I watched people sit on cash in 2013 waiting for a correction. The market kept climbing. They finally bought in 2015 after missing two years of gains.

I watched people panic-sell in March 2020 when COVID hit. The market recovered in months. They missed it.

I watched people wait for the “right moment” for years. The right moment never came. Or it came and they didn’t recognize it.

The data backs this up: A study by Charles Schwab compared different investing strategies over time. They looked at someone who invested at the absolute perfect time every year (the market bottom), someone who invested at the worst time every year (the market peak), and someone who just invested consistently regardless of timing.

The difference in returns after 20 years? Almost nothing.

The person who timed it perfectly beat the person who just invested consistently by less than 1% annually. But the person who waited on the sidelines trying to time it? They lost decades of growth.

Completion Not Perfection

I used to tell clients: completion not perfection. You don’t need to understand everything before you begin. You don’t need a PhD in finance. You don’t need to read every investing book ever written.

You need to understand enough to not make catastrophic mistakes, then start.

Here’s “enough”:

  • Know which account to use (we covered this last week)
  • Know what to buy (we’re covering this in two weeks – spoiler: index funds)
  • Know you’re investing for decades, not days
  • Know you’ll keep adding money regularly

That’s it. Start with that. You’ll learn the rest as you go.

The “But What If…” Questions

“What if the market crashes right after I invest?”

It might. It probably will at some point. Doesn’t matter. You’re not pulling the money out for 30 years. It’ll recover. It always has.

“What if I’m buying at the peak?”

Maybe you are. Or maybe this “peak” will look like a valley ten years from now. Nobody knows. That’s why you invest consistently over time instead of trying to nail the perfect entry point.

“What if I wait and invest more later?”

You just saw the math. Person B invested 3 times more than Person A and still ended up with almost $400,000 less. Waiting costs you more than you think.

The Best Time Was Yesterday

There’s an old saying: “The best time to plant a tree was 20 years ago. The second best time is today.”

Same goes for investing.

If you’re in your early 20s and reading this, you have the most valuable asset in investing: time. Use it.

If you’re 35, 45, or 55 and reading this, you’ve lost some time. You can’t get it back. But you still have years ahead of you. Don’t waste those too.

Here’s what I learned over the years: completion not perfection. Starting with good enough beats waiting for perfect every single time.

The biggest mistake isn’t starting at 32 instead of 22. The biggest mistake is being 42 and wishing you’d started at 32.

Your Action Step This Week

If you already have your investment accounts open: Make your first contribution this week. Even if it’s just $50. Get the account funded and pick what to invest in (we’ll cover what to buy in a couple weeks).

If you don’t have accounts yet: Go back and read last week’s article. Open a Roth IRA. It takes 15 minutes.

Don’t wait for perfect. Perfect doesn’t exist. Start now. Let time do the heavy lifting.

See you at the top.