From Piggy Banks to Stocks: A Guide for Young Investors - Episode 62
Today, we chat with Maya Corbic, CPA, who has written a book to help kids understand investing. We talk about why it's so important to start learning about money when you're young, just like learning how to ride a bike or swim. Maya shares some awesome tips on how we can make investing easy to understand, not just for kids but for their parents too. It's like unlocking a secret treasure chest that can help you do amazing things in the future. So, if you've ever wondered about investing or saving money, you're going to love what we've got to share.
About our guest:
Maya Corbic, a CPA and dedicated mom, combines her vast experience as a CFO, auditor, and tax accountant with her personal journey from a first-generation immigrant from war-torn Bosnia to a successful financial literacy educator. Having arrived in a new country with her family at 15 with nothing but two suitcases and $50, living in government housing and juggling two part-time jobs in high school, Maya's early hardships instilled in her the importance of financial independence. She and her husband overcame $60,000 in debt early in their marriage, achieving debt freedom, including their mortgage, by the time she was 32. As the founder of the Wealthy Kids Investment Club and the popular Instagram account @teach.kids.money, Maya is passionate about simplifying investing and empowering families to grow their wealth. Drawing on nearly two decades of professional experience and her life lessons, she is committed to teaching financial literacy to kids and inspiring hundreds of thousands of parents to raise financially independent children, with the vision to educate every child to become a financially independent adult.
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TRANSCRIPT:
Naseema: [00:00:00] What's up, what's up, what's up, my financially intentional people. I'm joined by Maya Corbic, CPA to talk about investing for kids. And if you don't know, now, I am a strong advocate for teaching kids about money as early as possible. My kids invest, and I think all kids should know about investing.
And Maya has created a beautiful book that my daughter has actually went through and read to make investing accessible for kids. Hey, Maya, welcome. How
Maya Corbic: Hello. Thank you. Thank you so much for having me. This is really exciting.
Naseema: Yes, yes, yes. I think investing is exciting, but being able to empower the future generations to invest is like for me something that I wish I had access to when I was younger, I'd be a lot further ahead and let me tell you, my kids are far along, but what was your [00:01:00] interest in teaching kids about investing?
Where did that come from?
Maya Corbic: I actually have been teaching kids about money for the past 11 years, and then it wasn't until I got on Instagram and into 2020 when everybody was online I started getting a lot of questions about kids and investing. I also realized that a lot of parents are able to teach their kids, the difference between needs and wants and budgeting, but many of them.
A lot of people didn't really know anything about investing themselves and they know that investing is important, but they're like, how do I teach my child something that I don't even know? And so that's like where I started speaking with people, interacting with them. And I realized that our children need more information.
And when I wrote this book, I wrote it for the younger me because I wish I had a resource like this when I was younger, but it turned out that actually. There were parents who were testing this book for me with their children and it was the [00:02:00] parents that were learning. And then they were even teaching their own kids.
The kids were learning along the parents, but the parents were coming to me and saying, Oh my goodness. Thank you. I finally understand investing. That's how it all got started.
Naseema: That's my kind of sneaky way of teaching adults how to invest is learn how to do this for your kids. But really, it's like teaching them. And sometimes especially if there's like a guilt around not knowing how to do something that you think you should know how to do, you don't pursue that information.
But when they're just like, Oh, okay I could teach my kids this and then maybe I'll learn in the back end. They are a little more encouraged to learn it. Because you don't live in that space of shoulda, woulda, coulda you live in this is now an opportunity.
For my kids to do the things I have access to things that I didn't have. And yeah, I do like to back and I'm like, ha ha, I got you here because you thought you were learning how to teach your kids to invest, but we're going to teach [00:03:00] you first. And then what's caught is taught.
They'll see you investing. You'll do these things, you'll start speaking this language and then they'll start speaking this language. And yeah,
Maya Corbic: No, that's exactly it. No, that's exactly it. And the reason why I wrote the book in such a way, it is written in a language that a 10 year old can understand and has lots of pictures. It's short paragraphs so that it's not intimidating for kids, but it's also not intimidating for adults.
Like I had a. A high school order 40 books for me. They have this like special regional business program. And I actually said to the program coordinator, I said, just so you know, the book when they open it, these are high school students that are graduating and going off to college or university.
They're going to be like, why did you give us the kid's book? But you need to explain to them that it's purposefully written that way. So it's not intimidating and that anybody can learn. And we want to capture as much of an audience as possible because, I have some great investing books here, but to be honest, even for me as a CPA, I'm kind of like, man, [00:04:00] like it's all text, it's a little bit boring.
If it's boring for me, it's going to be boring for others.
Naseema: Yes. Yes. Yes. And I'm gonna flip open to a page for people who are watching on video, but it's just the graphics are amazing. It's just like little short digestible topics. And my daughter, who's Still not and she'll be 10 this year did it for her reading for school, for her reading logs.
So she has to read 20 minutes a day. And so everything she learned in short digestible things, she was able to, summarize that and write it back out. And, I think it's. The information is so good that she did it easily, hardly ever without my help. And she knows a lot of these things like in practical application, but not really what it is, like exactly what exactly a stock is.
What exactly an index fund is, she knows that these things exist like by title, but not what they mean. And so this [00:05:00] book was. Giving her that background knowledge and she loved it. She loved it. She loved that. She was able to explain these concepts back to her friends, which is another part of learning right?
If you truly grasp the subject when you're able to teach it to somebody else. And that's how I learned things. I, I learned when I learned there's something new. My first thing is to try to explain it to someone else so that I can embed that knowledge. And so she was able to do this.
Yeah. With this book. So thank you for it. And I think it's a great resource, but can you talk to us about some of the lessons maybe your kids have learned from just your years of experience outside of the book, but also if some, they learned some things from the book,
Maya Corbic: Yes. So when it came to investing and obviously I didn't learn this growing up. I learned it in my thirties and a lot of times people are like, Oh, you're a CPA. You probably learned about this. I'm like, Nope. CPAs learn how to do bookkeeping, accounting, taxes, all that. But not like we understand, some [00:06:00] investing, but I have to say like a lot of the things in the book I had to learn in my 30s. I didn't really know what an index fund was. I'll be very honest. and it's one of those things as you said, sometimes people feel embarrassed about what they don't know. But I remember somebody saying something like if somebody asks you like, Hey, do you tap dance?
You'd be like, No, I never learned and you'll be okay with that. But if somebody asks you, do you invest and do you know how to invest? All of a sudden, we're just scared and embarrassed. And if nobody ever thought you, how are you supposed to know? And why are we feeling embarrassed? And I just want to mention I know you just said you thought your kids and.
Your daughter already knows some of this terminology. She's vaguely familiar, which is so amazing because that's exactly what we need to be doing. We need to be talking to our kids about it and normalizing, investing as part of the conversation. And then look, now your daughter is teaching it to other kids.
So it's like when we teach it to one person, it really can make a difference, not only in their life, but it can make a difference in other people's [00:07:00] lives.
Naseema: conversations, making, talking about money not this taboo thing, but something that everybody does. And I encourage that with my kids. Sometimes they make people uncomfortable, they love to get on their grandma about how much money she spends on shopping is you're poor, you spend all this money shopping.
Yeah, my mom. It's crazy, but it's just because they understand money in a different way than most kids. But I often find that along that same vein kids, sometimes adults want to prioritize investing for their kids before they prioritize their own investments. They're just like I've missed the boat on investing for me.
Let me invest for my kids. What do you say to people that think that way?
Maya Corbic: I always believe, when you're on an airplane, they tell you put on your own oxygen mask first before you start helping others. So I think, we need to take care of ourselves. Our kids are going to be fine. As [00:08:00] long as we teach them and, if you cannot put anything towards your kids.
Fine. If you can do 10, it's 10 a week better than nothing. But if you really are struggling and cannot do anything, that's okay. Take care of yourself so that one day they don't have to take care of you at retirement. And then when they get older, when they're able to get their first part time job, you can start teaching them about investing and you can start them off early.
It's not too late for them.
Naseema: Yeah. Yeah. And then I just want to circle back to this question. What lessons have you been able to teach your kids?
Maya Corbic: We actually started off because I knew a little bit more about investing as I started doing my business and teaching. People about money management and whatnot.
But I didn't know how to teach kids to invest. So there were no books out there. There was nothing. And my kids are teenagers now. One of them will be going off to college in a year. So I have to experiment with my kids and we did a lot of like different things. And I was like, okay, this works.
This doesn't work. I can advise [00:09:00] parents that, maybe they can try this. They shouldn't try that, whatever. But one of the first things I did with my kids is I actually taught them to save like I am really big on making sure that they pay themselves first, meaning that they put aside money as soon as it comes in, whether it's allowance or gift from family members or whatever for their birthday or Christmas.
And then when that money is saved. Then that they can invest that money and they say that 95 percent of what we do on autopilot. So I wanted to embed that in their psyche. I was like, you cannot spend all your money. You have to save a portion of it. So at first they were keeping some of their money in the savings account.
And what we used to do is I would be. I would go online, I would go on on their online banking and I would show them, I would say, okay, look, this is how much money you put into your savings account and this is how much interest you got, which means that this is how much your money earned you money.
And because my kids are older back in the day, they were like [00:10:00] making, I think it was like 15 cents a month. And so I explained when they got a little bit older, I explained to my son, I said, Hey, we can invest into stock market. Or, if you feel more comfortable, maybe we'll do a term deposit. So he was like, I would like to do a term deposit.
So he went to the bank with me.
Naseema: That's like a certificate of deposit here,
Maya Corbic: It's like a certificate of deposits. Yeah. It's the same thing. Sorry. Yeah. Different language, maybe different terminology, but it's the same thing, right? There's a guaranteed investment rate and your money is sometimes it's locked in for a year.
Sometimes you can still pull it out. His money wasn't really locked in for a year. Like he could still pull it out. But. On a thousand dollars back then, like he was going to earn 60, which again is nothing, but we gradually, like we were graduating from one monetary instrument to another.
So we went from savings account to certificate of deposit. And then he was like, okay, so that made me $60. I said, are you [00:11:00] ready to start investing in the stock market? And by the way, I just want to clarify, since my kids were born, I was investing in for their education. So I am from Canada, so we have something very similar to 5 29 plan.
So I was still investing for them. It's just that. They were not really part of that conversation because I didn't know how to talk to them about it. But then there was this other money. And so this was the money that my husband and I were putting aside for them. And then there was this other money that they were getting for birthdays and like special occasions.
And when they were babies, I was like, we're not going to touch that money. I'm going to invest. There was like a separate investment for them. It was like UTMA, equivalent to UTMA that we had for them. And again I wasn't talking to them about it. There was money there. We would always contribute to it.
But I was like, okay, now you guys are old enough. Like I need to involve you somehow. So it was like, oh, you're getting allowance. Let's take part of your allowance. And when we save up enough, what are we going to do with it? So we've done savings. We've done term [00:12:00] deposit. Let's now invest it.
So I opened up like a whole bunch of other accounts for them in their name. And then we started buying index funds, but I have to say, I discovered index funds in ETFs only my thirties, like mid thirties. And I was like, why didn't anybody tell me about this? This is so simple. A 10 year old can understand this.
This is crazy. I knew about mutual funds, but the fees on mutual funds are very high. My goal obviously once I learned that, I was like, I have to teach this to my kids. I have to teach this to all the other children because they can really benefit from this.
Naseema: Yes, I love that. And I love that gradual stepwise approach. But also you said you didn't really learn about investing until you're in your thirties. Neither did I, by the way, I didn't learn to invest until I was 36. But you still had these things that you were doing for your kids, in the background, you had their college savings.
You had a similar, like a brokerage account for them. But this is [00:13:00] without you knowing everything and I just want to emphasize that because oftentimes we think we have to have it all figured out before we start investing and investing is 1 of those things that, the best time to start was yesterday in the next.
Best time is today, like something that you just need to get started and you just learn along the way. There are some things that if you put it in place can make it just super simple and straightforward, and then you can learn more about it. I think people are caught up on trying to do it perfectly before they get started where, when it's not really that hard.
So I love that you still have those things in place and then you brought them into the fold. For them to understand and to do it on their own. So for my kids, they have 3 different investment accounts. They have their 529. so their college savings plan. They have their IRAs. And because they have earned income, right?
And then they have their custodial brokerage account, which I let them do individual stocks in just [00:14:00] so to teach them the value of ownership. So I believe in just introducing them. Right away, because, but I had the privilege because I didn't have kids until later in life. So in my thirties and so my kids are younger and we're coming, we're born into me learning about this space.
And as soon as I learned about it, I think my daughter was three. I opened up her my oldest daughter was 3. I opened up her 529 and then I start looking at other ways of investing for my kids, but I didn't wait once I learned about it, I implemented it right away and I think a lot of people have this analysis paralysis and just don't want to get started, which I understand the fear of life, especially if you think investing is like that.
Gambling, like you, companies going bankrupt and all this kind of stuff. And you hear about all these things on the news that like about financial markets collapsing and recession and all these scary things that are being thrown around. People are just like, I just want to be, I just want something safe.
I don't necessarily want to do [00:15:00] this. I want to make sure I'm making smart decisions. I, what do you tell people who are really timid about investing?
Maya Corbic: I, I think, investing is less scary than. People think I feel that media plays a big role into, they feed into the panic. They,
Naseema: hmm.
Maya Corbic: Make it sound like, you're going to lose everything. You're going to end up on the street. Whereas I would say most people are investing for long term and as a long term investor, if that's you, if you're thinking like long term, you're investing, for something that's going to happen 10 years from now, I really encourage you to start learning about index funds and ETFs.
It's so easy to understand. And. There's no, like nothing's 100 percent safe, but I just have this comfort feeling about ETFs and index funds as like a more safer investment because you are investing, let's say if you [00:16:00] invest in S& P 500 ETF, right? VOO. So you are investing in 500 largest U. S. companies. You are betting on U. S. economy. So sure, economy, like we go through a recession, and maybe, things are not looking great. But if you actually even just Google U. S. stock market, right? And you ask for the graph. It will show you a graph of like over the last, let's say 50, 60 years, there's this line that's going up and down, up and down, but it has upward trajectory.
So the reason why, right? Like the reason why investing for longterm is great is because you're giving enough time for your portfolio to recover from any of these, scenarios like sky's falling that you keep hearing in the news, right? And what is news? Like it's there to scare people most of the time.
Like when you really listen to what they are reporting on, it's all this gloom and doom or doom and gloom. I'm an immigrant. I always mix those up, but, but it's scary, right? [00:17:00] Then so a lot of times also people think like investing is gambling. It's not. It is gambling if you don't know what you're doing and if you are investing into companies on a hunch or because somebody else told you that's a good company to invest in.
If you don't know nothing about that company, if you know nothing about that company, you should not be investing in it. You need like a safer way to invest your money. And yeah, you do have to get educated. Bye. That's the prerequisite, but it's not as hard to get educated about it as a lot of people may think.
Naseema: and that's the whole thing like, even me, like, when I thought about investing, I used to have this image in my head of, I don't know if you've seen this movie trading places with Andy Murphy when he's he's like on the stock floor the, the New York stock exchange and they have these tickets in their hand and they're selling I thought that was investing.
I thought investing was trading in hindsight, and I thought I had to learn all these sophisticated things. And that the 1 book that changed it for me was a simple path to wealth by JL Collins. And it was a book he [00:18:00] wrote for his daughter about what he wished he would have known about investing.
And that's how I got introduced to index funds and basically what that is. If you don't know is instead of. owning an individual stock, you own a whole group of stocks, collective stocks, or you own the whole stock market. So every stock that's publicly traded. And so you're not just betting on one thing.
You can buy individual stocks if you just want to buy Tesla and say, Elon Musk does something crazy like he does every other day. And, Tesla just falls off the face of the earth. Like it just goes completely bankrupt. Then you would lose all your money, right? If you did individual stocks, but if you own the whole stock market, then, as you get the benefit of the top performing companies in the country, in the world or whatever is in that index, right?
So things are indexed like S and P 500 is one of those, you said, which is how America's top 500 companies, there's technology index funds are where the [00:19:00] top tech companies, there's all these things, but it's diversifying your money. But I also wanted to re, emphasize what you said, and I always pull up this graphic for people who are scared about investing is that if you look.
At a chart of the stock market, since its inception, you will see that it always goes up. So you want to zoom out like, for 50 years and you'll see this line that goes up and then you say, okay, I want to zoom in on, the recession, the great recession that happened in 2009. it looks like a little blip.
And then it goes back up. So even COVID, it was a tiny blip and then really, really went back up. Like we saw record highs. We just hit another record high in the middle of this what people are calling a recession. In investing longterm, you get the benefit of riding those ups and downs. And so on average, 7, 8 percent returns since the inception of the stock market. And so I like to give people that level of confidence. Okay, if you're not doing [00:20:00] single stock investing, if you pretty much own the top companies, you're pretty much making a safe bet. So it's not as risky.
And so when we talk about educating yourself, it's about, okay, it's not that hard open up an account. If you have an Instagram account, you can, it's easier to open up an account with a brokerage or a bank, if you want to call it, open an account, pick the account type, choose your investments.
It's easy to own, index funds. There's not financial advice, but what I'm saying is, is that we, it is not that hard. Like it's a five step process to get you started. And after that, you automate it, set it and forget it, continuously invest in, you'll be fine.
Maya Corbic: Add one thing to that? This is something you said to me and I absolutely love this. When I interviewed you a while ago, you said that when you opened your accounts, like you had a lot of questions and on your night shifts when, You were a nurse. Do you want to talk about that? Why don't you tell them about that?
Because I [00:21:00] think everybody should do that. I tell that to people all the time. I always mention you. I'm like you can do the same thing as her. I'm like, don't be afraid. Do you want to tell them what you did?
Naseema: So when I first started investing, I had questions and there are certain things that, can seem tricky, but they're really not in hindsight, but I didn't let that stop me. What I would do is, so I work nights and most banks like are on the East coast, right? I'm on the West coast.
And so they would open at nine o'clock in the morning or eight or whatever. And for me, it was like five o'clock in the morning. So at five o'clock in the morning, I'm up. And I know the phone lines are going to be slower and so I call and I'm just like, Hey, I have this question about X, Y, and Z and the people are so nice.
So they're not going to give you investment advice, but they give you advice that's going to help you open your account, automate things. What does this mean? They can give you the definitions of things, to help you understand something that may be a roadblock that'll have you stop. So I always say.[00:22:00]
If you ever come up against a roadblock or something that you're like, wait, what kind of account should I open? Is it a retirement account? Is it a brokerage account? What kind of account is this? What exactly does that mean? Traditional IRA versus Roth IRA. What does that mean? Get on the phone and call, talk to somebody.
They are super responsive and they're super nice. And I've done that with across different banks, Charles swab, fidelity, Vanguard, everybody that I've talked to on the phone is super supportive and nice. And they love helping people that have especially beginners to answer these questions for you.
So don't hesitate in that. That's my nerdy thing. I love to do even now. I still call them sometimes because I just like to talk to them. But yeah, I love that you share that. And that's what I'm saying. Like everything is figureoutable, right? Everything is figureoutable. And I think we just need to take those first steps. So this is your message again, if you haven't [00:23:00] started investing, start today. So let's talk about the book and what inspired it and what you hope people can take away from it.
Maya Corbic: Yeah. So I, the book really, again, I wanted a resource for kids because There is nothing like this in schools. They're not going to learn investing in schools. They will have to learn it from their parents. Unless they go into that field, their professional field, they become a stockbroker.
I wanted something that was easy to understand. And I literally wrote down like a list of topics. And I was inspired by my wealthy kids investment club because I actually covered these topics in my wealthy kids investment club and. I, I wrote down the list. I was like, okay, what do, what does everybody need to know about investing to simplify the understanding of how the investment world works?
And then I was like, okay, how can I teach this to the kids so that it's easy for them to pick it up and really as you [00:24:00] said, understand it so they can explain it to somebody else. And then I wanted to make it fun. That was a big thing. I wanted pictures in there. I want it to be super colorful.
It does look like a book for a four year old more than anybody else. But that's really the reason. The reason why is because I just didn't want it to be boring.
Naseema: Yeah, I love that, but I think people don't understand that most things have to be like at a third grade level for most people to understand it. So for people to like, look at something and think it's super basic that's probably the way most people are, is going to process it. Like most stuff that you consume, you have to be able to consume it fast in order to understand it.
People don't want to necessarily go back to, college level education, go to a college level education to understand investing. And the way most investment books are written is hella dry. Like I do not want to read it. Simple path to wealth. Great, great book. If you can get the audio book, JL Collins has an amazing voice, [00:25:00] but it's written more in a narrative form in a way that you can understand, and I love that you.
Saw a problem there weren't books out there like this, something that you can give your kid and you created a solution and it's an amazing solution. I really love the format. I love the way it looks. It is digestible. I feel like you can flip to any section in this book and start there and i, even though you're saying it looks like a book for a fourth grader.
No, it looks like a book that anybody could pick up and learn from. So I like that. I like the format that you put it in.
Maya Corbic: Thank you. Thank you so much.
Naseema: And then let's talk about your wealthy kids investment clubs. You also have a membership that teaches parents and kids about money, correct?
Maya Corbic: Yes. Yeah. Originally I wanted something that will teach kids about investing. And then it got a little bit complicated because again, it's the parents that sometimes parents don't know what's going on. So then I [00:26:00] made this into a family membership club and I thought, okay, like everybody can learn together because.
On my, as my Instagram followers, like I have some parents who are, who have babies. I have parents that have little kids, parents that have teenagers. So it was kind of like, okay, can I get like the whole family to learn? So like the parents with the babies, they can start learning and they can start investing for the babies right away.
The parents with the teenagers, they can sit down and maybe go through the lessons together, but we're doing a complete revamp. Of the club we're moving it to a whole new platform and I want to add some more lessons that are again at that very, very, very basic level that maybe even the kids can go through on their own without parental help.
Because I really believe in educating our kids. The younger they are, the better. And I just think that, this should become like normal part of growing up. I don't [00:27:00] want people to be freaked out about this because they didn't learn it in, in their childhood because the school didn't teach them.
I want everybody to learn this and when they're adults be like, yeah, I do, yeah, I invest. I think, actually it was Jeremy from the PFC club that told me. I had a conversation with him and I said, how did you become so good with money? Because he's an engineer and he said that it was his parents who taught him.
But the interesting thing about something that he said to me, is I thought everybody was doing this. And he said that when he was in his late twenties or maybe early thirties, he was talking to some of his friends and he was mentioning like his investments and they looked completely puzzled.
They had no idea what he was talking about. And then he realized that people normally, first of all, parents normally don't talk to their kids about investing. A lot of people don't even know how to invest or what to do. So you've inspired me. He's inspired me. Like a lot of these Instagram influencers inspired me because I really want to make this just a [00:28:00] normal thing.
This is what we do with our kids and, and we give them this gift of knowledge and education so they can. Live fully and they can achieve financial independence sooner than maybe their parents did.
Naseema: Yes. I love that. You created a safe space for families to be able to learn together and that's how I feel about investing for me. Teaching my kids. These things is giving them the opportunity to opt out of a lot of the things that I had to go through. They won't have to deal with student loans. They'll have already their retirement fund set up, like things that I didn't get to until my late 30s.
30s, they'll have these things coming into the workforce so that they can make better decisions on what they want to do with their lives. So they can shape their careers around what they value and how they want to live, but they don't have to go out and grind and, work in different organizations that they might not necessarily feel comfortable working in [00:29:00] just they can make money. And so I think that is super important, but for you to be able to create a safe space for families to learn together I think is really, really dope. And like we talked about earlier I think there's this guilt, I don't know something, but I think, know, fostering that.
And leaning into that and saying, you know what, yes, we're going to set up your kids college fund, but we're also going to make sure that, you're investing in your 401k properly, you're taking advantage of that match. And those lessons are things that you are going to be able to teach your kids.
So if somebody is I need to get started investing for my kids, where do you tell them to start?
Maya Corbic: I tell them to, even if just start with 10 because, and the reason why I tell them to start with 10 or 20 is because it takes the intimidation out of it. So it's we're okay losing 10 or 20. [00:30:00] Not that we want you to lose or, but it's more if you do lose it, it's not a big deal.
Start now, take some time, as you said, call up one of those brokerages, open up an account with them, then figure out what type of account you want to open up and. Start contributing, like even if it's 10 per week, that's fine, but learn what index funds are. Pick up JL Collins book understand what it is that you're investing in and ask a lot of questions, go on a quest and, Listen to podcasts, follow certain accounts educate yourself and even better, if you can get friends or family to go on this quest with you, then you will have amazing discussions.
You can talk about it and support each other, in this journey. And it just makes things a lot easier than doing it on your [00:31:00] own.
Naseema: Definitely. Let's talk about the kinds of accounts that we can open for our kids. I talked about the three that my kids have but there's some more what, what accounts like overall can kids, can you invest in for kids?
Maya Corbic: Yeah the ones that you talked about are probably my three favorite ones the 529 plan and a lot of people were really freaked out about it because they were just like what if my child doesn't go to university or college? And then I'm like you can transfer that to another child or now it's even better because you can actually transfer the amount.
up to 35, 000 to your child's custodial or your child's Roth IRA. And in Canada, we don't have any opportunity to invest into something like custodial Roth IRA, but I absolutely love those accounts, especially for parents that have businesses. And. I, I think those are great and even if you don't have a business and let's say your child starts working, they can [00:32:00] invest into that account and then the custodial accounts like UTMA where you designate your child as a beneficiary.
Those are also really great. The thing is that yes, your child will take the ownership of that account when they become an adult. Depending on which states they live in, but that's like another great account. Do you have any other accounts that you invest in particularly other than those three?
Naseema: No. I just have those three. I just, there's ESAs which are a little bit different. there's college savings funds that are a different, I know in Canada, you're in Canada, so you guys might have
Maya Corbic: We only have two accounts. It's actually really, really sad. I feel that our government owes us more and that we should be able to open more. We literally have something like 529 plan and something like custodial, like UTMA version. And even the UTMA version, it's not like you can open up, like you have to open up an account with a brokerage.
And. Not with any [00:33:00] brokerage, most of the brokerages that offer those, you have to go with an advisor. Yeah
Naseema: And the reason why I'm saying ooh, is because investing doesn't have to be hard, but if you go through an advisor, it adds on another level of fees that eats into your returns. And so we're . I'm more of a do it yourself kind of investor.
Maya Corbic: So when my kids when I said I actually had the account set up for them as soon as they were born, they were set up with advisors. So the 529, I cannot change it's, there's certain rules and they are what they are. Again, like I'm paying for my lack of knowledge, right?
Because I was not educated earlier. The custodial accounts, we actually moved, but it is really heartbreaking to see that and actually what made me learn, this is what made me learn about investing was there were periods of time, let's say between my, between Christmas and let's say my child's birthday, [00:34:00] where we did not invest into those custodial accounts.
Because. No money was coming in and they were very little. So we were not like teaching them how to invest. But the advisors were still taking their fees out. So let's say we were going through a recession. The account is losing value, but yet the money is being taken out of it to pay the fees.
And I remember, the mama bear. Cut came out and I was like, you can do that to me and maybe, okay, whatever. But you don't do that to my kids and their accounts. And I'm like, you're taking so much in fees, like more than what they're earning. As a matter of fact, their account is losing money because, not losing money.
Like it wasn't like a realized loss. It's not like they sold any investments, but it was just because of the economy. This, the prices, the stock prices were going up and down, but they were literally selling some of their investments in recession. To pay the fees and that, yeah, that's what made me learn [00:35:00] about investing because as a mom, you, a lot of times we put off things that should benefit us, right?
It's Oh, I have to go for health check or whatever. I don't do it. Oh, my kid has to go to the hospital to get checked this and that, whatever you take your kid right away. Oh my, my investment accounts, they're taking fees. It's okay. Whatever. They are selling my kids investments during recession to pay themselves the fees.
It's like a whole different ballgame. It's no, you don't do that to my kids.
Naseema: Yes, I love that. I love that. You can wait. It's a full mama bear hold on, boo. We need to stop this. Okay. So how did you correct that after the fact? Or is it like just a thing? Because how Canada is set up, you can't avoid the fees.
Maya Corbic: So I actually, what I've done is we have some adult accounts and my husband and I were, we were using some of the accounts again, like we have less options than you do in the States. So we were, we're obviously like investing into our accounts. But, there's this one type of account where you have a certain amount that you can contribute every year.
[00:36:00] And we knew, because we were also doing some real estate investing, that's where some of our money was going, that I wasn't going to max it out. And because I wasn't going to max that out, I literally took all my kids investments and I put it into that account. So now I know it's earmarked for my kids. As soon as they turn 18, I will slowly start transferring this money to them.
Or I'll see what the best way is to transfer it. Normally I wouldn't advise people to do that because I think everybody should max out their accounts. But I think there are some circumstances, if you're investing in real estate or I think like sometimes we don't have that, but sometimes people are paying off their debt.
So they're not maxing out their accounts and they know that they have so many years to pay off their debt. So that is sitting there. I was like, okay I'll just. Park my kid's money in there. It's tax free, like any gains are tax free. So that's why it made sense to actually put the money in there.
So it was just like a way of going around it.
Naseema: Okay, so [00:37:00] you put, you created a work around, but yes, my eyes in Canada, I'm in America and we have access to a lot more investments, which is a 1 benefit of living here. But I was talking to you earlier about okay, so you're Canadian, you wrote this book is it only applicable to Canadians?
Maya Corbic: Yeah. So it's not I actually had that in mind and, it's actually meant to be a book that can be applicable globally. So the terms and the terminology and the basics of investing is the same anywhere you go. Inflation is inflation everywhere. I talk about the revenues, expenses, profits what a brokerage is.
All of those. Terms, all of those things are the same. They don't really change from country to country or continent to continent. Investment fees that you pay when, you hire an investment advisors are the same. I don't know what the percentages may differ, but the fee is a fee. So a lot of these [00:38:00] things, I explain concepts like.
What is the recession? What is the bull market? What is bear market? Again, that's applicable anywhere in the world. So when I wrote this book I wanted to actually write it for my own children but also for the children of my followers and majority of my followers on Instagram are Americans. So I would say about 70 percent are American.
And so I wanted to make sure that the book can be applicable to anything that they do.
Naseema: I love that. I love that. But, and so you did write it in mind, like for these accounts that I have. Like I said, my kids have a retirement account of their brokerage account and their 529 account. What is, so when you're saying like for a person who wants to start an account for their kids and take 10 and open an account, what's the first account you would recommend of those three accounts?
Maya Corbic: if they have a business, I would say Custodial Roth IRA. I absolutely love that account. If they [00:39:00] don't, I would say it depends. Like I know, again, a lot of people. Are freaked out by 529 plans. So I would say open up like a custodial account with the child as a beneficiary. But I think it's totally worth having all three and giving them a different kind of purpose.
Like the 529 is for college maybe your custodial Roth IRA could be for them to, for their retirement. And then like UTMA account can be for them to buy a home one day because the prices of real estate are really high.
Naseema: Yeah, I love that. That's the goal. And for people who always say that, I always get that question too. The majority of my kids money is in 529s, right? People are like what if you don't kids don't go to college. I'm actually in a process of actually consolidating my 529.
different 529s for my 3 different kids. I'm actually in a process of consolidating them all into 1. [00:40:00] So it'll compound a little bit faster. But it's.
Maya Corbic: Cause I was just thinking, I'm like, why are you doing it? But that totally makes sense. There's going to be more money. It's going to actually compound faster. It's going to give you more money.
Naseema: they're 4 years apart. Like, when it's time to go to college if my daughter doesn't use it she'll be the beneficiary up top, right? The 1st beneficiary and whatever she doesn't use. I'll just change the beneficiary to my 2nd oldest daughter. And then my 3rd daughter, but I want to just pull it all together.
Again, it'll grow faster. But that's a benefit of a 529. If none of them use it, it's still going to be a legacy building tool and my family, I'll shift it back to my name until there's somebody, a family member in need that uses it. And that benefit of rolling that 35, 000 into their IRA. I love that.
I love that feature. And that's just happened in the last couple of years that you're able to do that. But just that 35, 000, if they didn't invest anything else compounds to [00:41:00] huge amounts and I did the numbers that before I thought it's 700, 000 dollars or something crazy like that by retirement age, but they still have other money in their retirement accounts as well.
So there's no wrong answer. There's no wrong way to invest in any of those accounts. And I like what you said about naming those accounts or giving those accounts and assignment. Of course, the college fund is going to be for college, but again, it could pay for all of my kids college and part of that is going to go into the retirement accounts.
The retirement account, of course, they're going to have a huge nest egg when they retire. So that's for later on, and then there are brokerage accounts. I'm going to use it for 2 things. I'm going to use part of it to get their 1st car at whatever age they get their driver's license. And these kids, I don't know.
They're not driving now. They're taking uber. So that might not even be a thing.
Maya Corbic: House
Naseema: And then after that, it's going to be for them to buy a house hack. They I will put in for your pros home, but it has to be a house hack. Where the majority of, your housing costs are being covered by [00:42:00] somebody else.
And then that's going to help you build your get your next house. If that's going to be a single family home or whatever you want to do. But that is the goal for mine. I do want to say there is a caveat. You said this initially, but. You don't have to be a business owner for your kids to have a Roth IRA.
Because if your kids earn any kind of income, they can have a Roth IRA. It's always confusing because my kids. Can earn income through my business, but I don't pay them through my business. If you get what I mean, they, I give them money because I have them appear in some of my, in some of my posts or whatever, but that's their earned income.
And so they can invest up to either the IRA limit or how much they earn. So if they earn, 10, 000 but the Roth IRA limit is what's. 7, 000. It changed this year. They can invest up to that in a Roth IRA because of the money that I give them. but in [00:43:00] addition, if I were to pay them out of our business, I could get some tax advantages from that as well, but I don't necessarily do that and you don't necessarily have to have a business.
So if your kids are like tutoring or babysitting or doing things like that and they have earned income, they are able to. Invest in a Roth IRA. So I just want to clear that out, but yeah, so naming accounts, just pick an account, start small. I love the 10 because 10 people are just like, okay, like that is an attainable start. I can risk 10. And so we have to meet people where they at. And so I love that. But Maya let people know where they can get this beautiful, lovely book, or if they want to join your membership community, where can they find you?
Maya Corbic: Yeah, thank you so much. Yes. So the book is available on Amazon. It is available in Barnes and Noble online, Walmart online. So it's called From Peaky Banks to Stocks, The Ultimate Guide for a Young [00:44:00] Investor. For my membership, if you're interested in joining, you just Go to wealthykids. club. So it's not com.
It's just wealthykids. club, C L U B. And I'm always on Instagram. My handle is teach. kids. money. And I try to post daily tips on, what you can do with your kids to teach them more about money and build that generational wealth.
Naseema: Yes, so follow my on Instagram. I love her content. She's the best. Get the book. If you're interested in taking that next step, go ahead and join that membership. It is a pleasure to talk to you like this has been so good. And I just hope that this helps normalize those wealth conversations for us and for our kids.
Maya Corbic: Thank you so much for having me on. I had a lot of fun chatting with you.
Naseema: Of course.
Hey there I’m Naseema
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