Looking for a unique graduation gift? How about one that can make your graduate a millionaire?
Does it sound impossible?
Well, the thing you have to remember is that your high school or college graduate has one very important thing that you don’t have – a lot more time. That means there is time for compounding returns to work their magic so that they can retire with a million dollars in the bank.
(Okay yes, I didn’t mean they would be a millionaire right now …)
Option 1: Help Them Get Them Started
Sometimes getting started is the hardest part! If you can get them started with investing, and then can give them that vision of having a million dollars for retirement, that can be an amazingly powerful gift.
You can get your college graduate started with a gift of $1000 and help them put it into an investment account. It will then be up to them to add $200 per month from age 22 to age 65. With 9% average returns they will end up with $1.14 million for retirement.
You can even consider matching their contribution for the first few years—you put in $100 per month and they put in $100 per month. It will help them get into the habit of saving, and as their career and income grows, they can start making the whole contribution.
If a $1000 graduation gift seems out of reach to you, consider asking other family members to pitch in. Let them know what you plan to do—help them become inspired by your vision!
If you are giving this gift to a high school graduate, starting four years earlier means that they will only need to put in $130 per month from age 18 to age 65 to end up with $1.08 million at age 65. The affect of starting earlier is really amazing!
Option 2: Do It For Them
This option is a little bit harder at the beginning, but can still be doable.
Age 16 is usually when kids start really thinking about what they want to do after high school. If you start investing $250 per month at that time, at 9% average returns it would grow to $23,500 at age 22. If you can get friends and relatives to chip in an additional $1,500 as a graduation present, that $25,000 at 9% average returns will become $1.02 million at age 65 without you or your graduate adding another penny.
If you want to make your high school graduate a millionaire, $175 per month invested from age 12 to age 18 at a 9% average rate of return will grow to about $16,500. If you or others can add $1,500 on graduation day that brings it up to $18,000. If you leave it invested, that $18,000 is all they need to be a millionaire at age 65—without adding another cent.
Option 3: The Free (for you) Method
Starting early with investing makes a huge difference when it comes to saving for retirement!
Show the table below to your graduate and talk to them about what it means for them. Help them see the advantage they have by starting now, instead of waiting until their 30s or later.
If they get matching 401k contributions from work it will make things even easier—IF they start early!
Option 4: The $280 Option (It’s Financial Coaching)
Getting young people started on the right path financially is another thing that I do as a personal financial coach.
I offer a four-session coaching package for just $280 (current rate in 2024). In these four sessions we will start with budgeting and the responsible use of credit, we will work on establishing good money habits, and we will talk about savings, goals like home ownership, and retirement.
A solid foundation in personal finance can help them reach that one million dollar mark—and probably go beyond it. Sessions are over video call, so they can even do it from their college dorm room.
If you would like to find out more, schedule a free 30-minute intro video call with me—or schedule one for your graduate. It is a gift that will keep on giving their whole lives!
