Teaching Kids To Invest In Real Estate
Andrew Carnegie once said, "the wise young man or wage earner of today invests his money in real estate," and isn't that the truth? Getting your kids interested in real estate at a young age is one way to ensure they will be financially set in the future. The trouble is, most kids have no idea about real estate investing, how it works, or how it could benefit them.
So, how can we get our kids interested in real estate investing? Let's break it down by age group.
Elementary School-Aged Kids
When introducing the idea of investing in real estate to your young child, the key is to keep it simple and make it fun. You could start by showing them how to invest their allowance instead of spending it all on toys. Show them how an investment today means more toys in the future.
As your kids get older, you can introduce them to games related to real estate investing. The obvious choice is the classic real estate investing game, Monopoly. Your kids will learn the importance of having cash on hand and the importance of choosing properties with positive cash flow.
You could also find lessons in games your kids are already playing. One example is Fortnite. This game has many moving parts and receives a lot of criticism, but if you do it right, this can be a good way to teach your kid about budgeting. The game requires what's called V-bucks to buy different items, and they cost real dollars.
This may not be the same as investing in real estate, but only allowing your child a set amount of money will show them the basics of managing money. This will become a helpful skill when they are older and ready to make real investments.
Once your kids reach an age where they have more of an understanding of money, it is time to do some hands-on work and put together a plan. You should introduce them to different types of real estate investment strategies. Do they want to buy and hold? Do they think owning a short-term vacation rental looks like something they'd be good at? Or maybe they prefer something more passive, like investing in a REIT.
Taking your kids to real estate investing seminars in your area is another must-do activity. Your teenager could hear first-hand success stories from real estate investors and possibly meet people who could act as a mentor as they get their foot in the door.
Introducing your kids to real estate investment at a young age is a great way to set them up for future success. Even if they do not want real estate to be their primary occupation, it is smart to show them how to get into their first investment property at a young age so they can reap the benefits as they grow older. If they do it right, the cash flow from a rental property or two could cover a lot of their college tuition costs should they go that route.