Help Your Kids Become Millionaires

We all want better lives for our children, so I'm going to let you in on something that can help you get them started on the path to success. If you invest just $30 a month -- about a dollar a day -- for each child, you can help your kids become millionaires. There's no magic involved. It's just what happens when you let money compound in the stock market over decades. At a 10% annual return, about the market's historical average, it will take about 56 and a half years to get there, but it can be done.

While you may think $30 would be too small to be useful, there are several companies that actively welcome your investing dollars, even at that level. They're part of a group of shareholder-friendly businesses that offer something called a DRIP: a dividend reinvestment plan. You may need to buy one or more shares or make a larger deposit to get started, but once you're in the plan, they often let you make small contributions for low -- or even no -- fees. In fact, the companies listed below will both accept your ongoing contributions and reinvest your dividends at no charge to you.

The big benefit to your children, though, isn't the $30 a month, or even the million dollars at the end of the endeavor. It's the lifestyle, attitude, and financial know-how that come from being able to make that small, regular contribution in the first place. To invest money properly, the rest of your financial life needs to be in order. The bills need to be paid, the bad debts (like high-interest credit cards) need to be eliminated, and any other expenses need to be under control. Most important, though, you have to make saving and investing that money a priority in your life.

Improve your family's financial future
There will always be demands on your money. Once you have the basics like food, medicine, shelter, clothing, and transportation taken care of, everything else you're spending your money on is negotiable. Even within those basics, there may well be room to negotiate. For instance, could you hold on to your reliable, older-model car a bit longer, rather than trade it in for a newer one? And even then, would you consider buying a demonstration vehicle or other gently used, generally well-maintained car, rather than a brand-new one?

The choices you make today will affect your family for years to come. Getting to the point where you can invest that $30 a month -- and staying there -- will help you take control of your financial life. It will also help teach a powerful life lesson to your children. One that -- when combined with the substantial nest egg you're helping them build -- will go a very long way toward helping them succeed.

The hardest part of helping your kids become millionaires may well be taking control of your own finances. That's where my colleagues at Motley Fool Green Light can help. Advisors Dayana Yochim and Shannon Zimmerman help you find the hidden fortune in every paycheck. You can take the next 30 days to try out the service, absolutely free. Check it out -- you just might discover that you really can put your family on the path to financial freedom.

This article was originally published on June 14, 2007. It has been updated.

At the time of publication, Fool contributor Chuck Saletta did not own shares of any company mentioned in this article. The Fool has a disclosure policy.