Your best bet for making your child rich while you're still alive to see it:

Open a Ric-E-Trust retirement fund for your child. Use your child's money to open it for them. The number one thing in your child's favor is time. Put the power of the time value of money to work for your child.

The Ric-E-Trust is an account that allows you, the parent, to specify the age at which the child will receive the funds. The catch is that the funds cannot be touched until a minimum age of 59 1/2. All of the earnings are tax-deferred, making this one of the most powerful ways to give your child a head start on retirement.

Investing $5000 at birth without ever putting another penny in would result in a retirement account worth over $2 million dollars at age 62 assuming an annual return of 8%. In addition to the initial deposit, more money can be added to the trust at any time with minimum deposits of $500. And ANYONE can contribute to the account. The benefits to having a trust like this are tremendous and the only downside is that the funds cannot be accessed before age 59 1/2. You can learn more at www.ricetrust.com

Note: the author is not an employee or agent of the Ric-E-Trust and has not been paid for this endorsement.

So you don't want your child to wait until age 59 to get rich? Then your best bet is to teach your child sound money management principles at the earliest age possible. My daughter is 4 years old and she is already learning the simple concepts of how money works. Since no one ever taught me proper budgeting and I learned the hard way, the greatest gift I can give my children is a proper education about money. It is a virtual guarantee that they will not be taught this in school. Even if you are heavily into debt and that's what makes you want to prepare a better life for your child, that child can learn from your mistakes. Invite them to help with a family budget and warn the child of the pitfalls of a life of debt.

Keep it incredibly simple. Once the child becomes a wage-earner, even if it's just an allowance, make it very clear that you cannot spend what you don't have. If the allowance is $10 a week, make sure they only spend $9. Earning more money is not what makes people rich. Owing less money is the trick.

Learn more about this author, Brian Lardin.
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