let's get real: investments

let's get real (aka LGR) is a series about the meetings we hold with our teenagers about real stuff they need to know. we talk about everything from careers and investing to the importance of honesty.

In Let's Get Real: Investments Edition, we sat our teens down and talked with them about the power of investments, and it was truly a game-changing conversation.

Using the investment calculator from Ramsey Solutions, we first walked them through different scenarios:

1. Starting at 14 years old and saving $10/month: You could have $191,510 by age 65, with total contributions of $6,120.

2. Starting at 14 years old and saving $25/month: You could have $478,775 by age 65, with total contributions of $15,300.

3. Starting at 25 years old and saving $10/month: You could have $63,240 by age 65, with total contributions of $4,800.

4. Starting at 25 years old and saving $25/month: You could have $158,101 by age 65, with total contributions of $12,000.

5. Starting at 40 years old and saving $100/month: You could have $132,682 by age 65, with total contributions of $30,000.

6. Starting at 40 years old and saving $250/month: You could have $331,708 by age 65, with total contributions of $75,000.

   
   

The kids were amazed by the difference. By contributing just $10/month starting at age 14, they could have more money at 65 than if they contributed $100/month starting at 40! And they would only need to contribute a total of $6,120 versus $30,000.

This was the first part of the mindset shift that occurred during our conversation. We could literally see the lightbulbs turning on as they began to understand the real value of money. It was incredible!

But it got even better.

After helping them see the value of investing early, we shared our own investment plans and explained why we can't always do all the fun things they want. We discussed our retirement goals and told them we don't want them to have to support us financially when we're older and unable to work.

This clicked.

Ever since our discussion, the kids have been very supportive of our budget. They even ask if certain activities are "in the budget" and come up with cheaper solutions on their own. They're invested in our investment goals, and the entitlement mentality that once existed in our home has largely disappeared!

I know I keep repeating myself, but it's been truly game-changing.