When I was a kid, I got my first job as a paperboy. I must have been 14 or 15. I started out on a bicycle, pitching the paper with pretty good accuracy. When I was old enough to drive, I’d fling the paper with mixed results from my dad’s MG midget convertible. It was an evening paper during the week and morning paper on the weekends. During the summers, I’d also mow lawns in my neighborhood for like 15 bucks a pop. I don’t even remember what I did with all the money I made, but I’m certain I didn’t save much. I had a little savings account and think at one point had about 40 dollars in there which earned a few pennies in interest a year. I set up a savings account just to get one of those passbooks which I thought was pretty cool. The thought never occurred to me to set up a retirement account with my lawn mowing money as Cliff Goldstein suggests in the article, Put your teen’s lawn-mowing money into a Roth IRA. And if either of my parents had suggested it, I would have thought they were crazy and made some snide remark about David Lee Roth of Van Halen.
Retirement? Why my life had just begun. I wasn’t working to set aside money for the day I could no longer work. I worked because I needed spending money, not saving money. Money for baseball cards, chips, candy bars, sodas, movies, records and of course gas for the mower. I could sure blow through money, but I always worked hard for it and believed in the spirit of making cold hard cash. I was even a member of the FBLA in high school, although ironically I never became a businessman or a business leader of any kind. I was an English major and later became a teacher and administrator.
As a young teen, I doubt I earned enough to even meet the Roth IRA minimum initial investment requirement, which is something like $1,000. I don’t know how much kids can get for a lawn these days, but I suppose if it is the right lawn in the right neighborhood, they could earn a couple hundred a day. And if they are lucky enough to have parents who would match their contributions, and kick in some bonus spending money, a Roth IRA wouldn’t be such a bad idea after all. And in June of 2015 when the feds raise interest rates, I recommend channeling money into a cheap bond fund. Always buy low and hope by retirement age share prices will be much higher. This earned income is essentially sheltered so that it cannot be considered as an asset for financial aid when the kid is ready to go to college. But who knows, your teen may not need college if he/she makes it big in the lawn mowing business. It could happen you know: imagine your teen as a contractor with a novel logistics app to help coordinate an army of fellow teens mowing lawns, raking leaves and shoveling snow. Your kid might be able to contribute to YOUR retirement plan!