A parent’s shining example can not only shape a life of financial discipline, but also cement a career path for passing on that knowledge to other millennials. But who says you can’t have a little fun while you’re at it?
Jeff Cruttenden works alongside his dad on the more entrepreneurial end of the money spectrum. Father and son co-founded Acorns, an app that aims to make managing money through its four features: Invest, Later, Spend, and Early. Invest helps you put money toward investments, Later gets you started with retirement savings, Spend provides access to funds via a debit card, and Early is a custodial account to help you save for your children.
And for Jeff, the investment journey began at age 11. That’s when his dad came forward with an unusual invitation that transcended the usual game of catch or an ice cream cone run.
“He asked me to pick one stock to invest in,” he recalls. “I took some time to look through a few stocks.” Hey, it beats learning your multiplication tables. So how did it go?
“I went with my gut: a cheese company, which eventually went bust,” says Cruttenden, 28,“When the market’s up it’s exciting and fun; however, when the market turns and you lose your allowance it’s not so exciting and fun.”
At least losing your allowance isn’t losing your shirt. And it wasn’t Cruttenden’s last chance to play the market, but his very first step on the road to investment wisdom. Others he knew at Lewis and Clark College in Portland, Oregon (where Cruttenden graduated with a mathematics degree) weren’t nearly so lucky.
“By the time I got to college, I was surprised at how many of my peers had interest in investing but couldn’t overcome the barriers in their way, such as high minimum balance requirements and fees,” he says. “From that point on, my father and I sought to simplify investing and create a more realistic approach for young people to get started.”
You know how to save. But there’s a good chance investing still mystifies you—or, if it doesn’t, still holds a spot on your “I’ll get around to it someday” list. (By this point, that’s where those unrealized New Year’s resolutions belong.)
Indeed, investing presents a high barrier to entry for some; it’s not part of our common learning curve in money matters. Before we started grade school, lots of us got piggy banks. But what’s the equivalent beastie that introduces a kid to investing?
For young adults still in search of market answers, Cruttenden has some good news. “I’ve found that you can ‘find’ money if you set aside a little at a time. For instance, with Acorns I’ve been able to invest and save a little over $1,000 with no real impact to my daily life.”
Here Cruttenden brings up a crucial variable. A few dollars here and there can add up to more than just a small pile of money. With little impact, you have the seeds to grow something that could have a big impact.
Many of us stumble onto such truths, or learn them the hard way. Fortunately for Cruttenden, his dad Walter was a financial markets innovator who founded and served as the CEO of Cruttenden Roth, now Roth Capital Partners.
“He’s a natural mentor and fantastic storyteller and was able to captivate my interest at a very young age,” he says. “He’d talk about companies for which he was helping to raise money, and this started to incubate an understanding of the financial markets in me. My dad gave me a very practical, holistic view and a deeper fundamental understanding of how financial markets connect to everyday life.”
The flip side of the coin was learning what goes into starting your own business. In the financial space, that isn’t easy because of government regulation. But Cruttenden says that “one of the most valuable lessons I’ve learned is that innovation is possible.”
With Acorns, the continual process of investing money is “automatic and mindless. Getting set up with an Acorns account ensures that young people are contributing to their investment account frequently and often, enabling them to reap the benefits of compound interest from a young age,” Cruttenden says. “While investing small amounts regularly may seem insignificant, it’s proven to add up over time.”
The beauty of Acorns is that it works via an app that’s available for iOS and Android. The set it-forget it system is bonehead simple. Your “spare change” from linked credit and debit card purchases is rounded up to the nearest dollar and invested in different funds, based on your risk tolerance. It’s a confidence builder, especially if you’re wary of brokerage houses and/or find yourself with limited resources.
The philosophy behind Acorns squares up with Cruttenden’s plans for the future. “My long-term goal is pretty simple: to stay modest and not get carried away with unnecessary distractions,” he says. “I just want to save and diversify when possible.”
He also offers this encouragement based on his own experience. “Having been in precarious financial situations, I’ve experienced how time and focus can pull you out of so many tough circumstances,” he says. “Just having a plan can give you comfort and confidence that you’re moving in the right direction. My advice: Set up that plan to keep you moving in the right direction.”
Just watch how much you sink into those cheese stocks, though. Save the meltdown for your pizza.
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