Why Raising Children Is Like Investing In A Retirement Account.

A few days ago I received a statement from my investment guy at Morgan Stanley. I was encouraged to see that my investment account was growing. Always a good sign for a guy who hopes to retire before I’m dead :-). But, for as much growth as the account had sustained, I still had a long way to go until the dividends started paying off. As I sifted through each page, the thought occurred to me- raising children is very much the same.


We’ve never been oblivious to the long road ahead of us when it comes to raising our children. But it has become cluttered at times. We have lost sight of the overall end goal in this parenting gig. This is especially true when things become difficult. What we are realizing every day, is that our children’s growth (and our growth as their parents) takes many years of consistency and focus.

Picture it like a Roth IRA or a 401K. If you opened an account at age 25 and then decided to quit at age 30, you’ll certainly have some growth (thanks to compounding interest) but not as much as if you consistently invested all the way until age 60 or 65. It takes a commitment to a very long period of time.


I remember opening my investment account in 2008. I can remember where I was, what the room looked like, and even the clothes I wore. I figure I can remember so well because I was handing over a rather hefty initial deposit to open the account. Anytime large amounts of money exchange hands my senses are sharpened! 🙂

My investment guy looked at me and explained that this was a long term account. In short- it would not grow unless I committed to investing over a long period of time.

How true is that in raising children? When they’re born, you’re basically setting out on a 20 year journey. You must commit to a long-term investment. It doesn’t work to parent heavy for the first 10 years of their life and then lighten up, go more hands off during the teenage years, and wait until they’re an adult to try and reap the dividends. Likewise, it’s detrimental to take it easy during their early years and then kick it into overdrive during the teenage years. That’s a recipe for rebellion!

Consistently parenting, hands on, all in, over the entire course of their childhood (birth through 20) is what will yield the greatest dividend.


I was speaking to a group of parents a few weeks ago about, what I call, the 4th place of influence. The principle is this- from birth to age 10 or 11, your child’s world revolves around you, their parent. You are the strongest voice of influence. In this regard, you sit atop the list at a lofty number 1, followed by other adults, friends and the culture around them!

But then, right about the pre-teen years (age 12) until the college years (ages 19-21) a major shift happens. Their friends and the culture around them seem to have all the influence and all the power. You, the parent, seem to be rendered speechless and powerless. You drop from 1 to 4 on the list (coming in behind their friends, the culture, and other adults).

Lots of parents give up in this season. But this is where you must stay the course more than ever.

Why? It’s simple: while your influence drops in rankings during the teenage years, you’re still on the list. You’re just in 4th place instead of 1st. Your child is still taking cues from you. It just doesn’t seem like it. You must invest heavier than ever during this time. During the economic downturn a few years back, my investment guy encouraged me, more than ever, to stay the course, and keep investing.

The dividends, if you do this in your parenting, will be enormous. The odds of you and your child becoming great friends when they become a full-fledged adult later on, are overwhelmingly in your favor. But you have to stay the course. You have to keep investing, and investing, day, after day, during the tumultuous years of adolescence!

My retirement account will payoff, someday. Not today. If I wait until I’m 60 or 65, I could have a large amount of money for retirement. If I panic and give-up now, or panic and withdraw my money, it’s not worth very much. Plus I get a big fat penalty slapped on me. The account hasn’t reached it’s full potential. There is still so much growth that needs to occur.

The same thing is true in raising your children! It’s a marathon, not a sprint. It’s a journey, not a destination!

Question: What are some other things you are learning in your parenting journey when it comes to the investment? You can leave a comment by clicking here.

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