Warren Buffett didn’t just pass down wealth—he invested in his kids' financial literacy, work ethic, and decision-making skills.

By teaching them the value of smart choices and long-term thinking, he gave them tools for a lifetime of success. 

This shaped their lives in ways they appreciate even now.

You can be that parent too when you:

• Invest in Their Passions

One of the best ways to prepare your children for success is to invest in their passions early on.

Whether they’re into music, sports, or coding, giving them the tools and experiences to explore 

their interests can open doors to future opportunities.

Why it matters:

Encouraging their passions gives them confidence and the freedom to pursue what they love, which could turn into a career or lifelong hobby.

When they find themselves thriving in something they love, they’ll look back and appreciate that you were behind them from the start.

• Open a Custodial Investment Account

Setting up a custodial investment account or investing in The Orie is a smart way to teach your kids about saving and growing wealth early on. 

It allows you to make investments in their name, which they can access when they come of age.

Why it matters:

This gives them a financial head start, whether for college, starting a business, or buying their first home. 

More than that, it teaches them the value of investing over time.

When they turn 18 (or 21, depending on the plan) and find a solid financial cushion waiting for them, they'll be grateful for the foresight you had to invest in their future.

• Family Vacations

Instead of material gifts that will eventually fade or break, family vacations provide memories that last a lifetime. 

Taking your kids to new places not only strengthens family bonds but also expands their understanding of the world.

Why it matters:

Research shows that experiences, not things, make people happier in the long run. 

Travel fosters curiosity, empathy, and a sense of adventure—all qualities that benefit children as they grow.

Those unforgettable trips—whether it's camping in the mountains or exploring new cities—will become cherished memories they carry into adulthood.

• Set Up a Roth IRA for Them

You don’t need to wait until your kids have a full-time job to start a retirement account. 

If they earn any income, you can help them open a Roth IRA. Over time, compound interest will work its magic.

Why it matters:

Starting a retirement account at a young age gives them a massive financial advantage. 

Even small contributions made in their teenage years can grow into something significant by the time they retire.

When they see their retirement savings grow exponentially, they'll appreciate how you helped them secure their financial future without even realizing it.

• Start a Family Business

Involving your children in a family business or starting one that they can be a part of teaches invaluable life skills.

Skills range from teamwork and problem-solving to leadership and financial literacy.

Why it matters:

A family business is more than a source of income; it’s a hands-on education in entrepreneurship. 

It gives kids a sense of responsibility and accomplishment while teaching them the nuts and bolts of running a venture.

Whether they eventually take over the business or use the skills to start something of their own, they’ll always remember the lessons learned by working alongside you.

• Buy Real Estate

Real estate is a powerful, generational investment. 

Whether it’s a family home in the Orie or a piece of land, property has a long-term value that grows over time and can be passed down.

Why it matters:

Unlike volatile investments, real estate tends to appreciate steadily. 

It's also a tangible asset your children can inherit, sell, or use.

Owning property provides financial security and options for the future—something they’ll deeply appreciate when it comes time to inherit it.

• Invest in Health

Investing in health doesn’t just mean healthcare—it can be anything from nutritious food and fitness routines to mental health support. 

The choices you make today about family health habits will carry over into your children's lives as they grow.

Why it matters:

Healthy habits established in childhood often last a lifetime. 

Investing in your children’s physical and mental well-being now means they’ll have fewer health-related challenges in the future.

When they grow up strong and healthy, they’ll look back on the importance you placed on wellness with gratitude, realizing how much it shaped their lives.

• Teach Them Financial Literacy

One of the most impactful investments you can make in your children’s future is to teach them about money management. 

Whether it’s explaining how savings work, teaching them to budget, or introducing them to the basics of investing, this knowledge will stay with them for life.

Why it matters:

Financial literacy is a skill that too many people learn too late. 

By teaching your kids early, you’re helping them avoid debt traps, make smart investments, and build a secure financial future.

When they navigate adult life with confidence—managing their money wisely and avoiding financial pitfalls—they’ll have you to thank for their savvy skills.

• Invest in Their Happiness

The most valuable investment you can make is in your relationship with your children. 

Spending quality time with them, listening, guiding, and simply being there—is an investment that pays emotional dividends for years.

Why it matters:

Kids thrive on attention and time spent with loved ones. Those moments help build trust, confidence, and a deep sense of belonging.

As they grow older, they’ll cherish the time and love you poured into their upbringing, recognizing that these investments shaped who they are.

Conclusion

While financial investments are essential, the most impactful gifts you can offer your children often go beyond money. 

These family-friendly investments ensure your children are set up for success and, more importantly, feel deeply supported in their journey. 

One day, when they reflect on their childhood and the doors you opened for them, they’ll know exactly how much you cared about their future.

What Parents Need to Be Wary Of When Investing in Their Kids

While investing in your children's future is crucial, there are often overlooked risks and pitfalls that can hinder their development.

Here are some lesser-known but important considerations to keep in mind:

   1. Over-investment can Lead to Dependency.

While it’s natural to want to provide your children with everything they need, over-investing in their interests or financial future can create unintended dependency.

Constant financial support can rob them of the motivation to solve problems, take risks, or become resourceful. 

Striking a balance between empowering them and making them self-reliant is key.

   2. Unrealistic Expectations Can Stifle Growth

Investing heavily in a child’s passion or talent can sometimes backfire if the child loses interest or doesn’t meet expectations. 

Pushing them to excel in an area because of the time or money invested can lead to resentment or burnout. 

   3. Financial Education Must Include Failure  

When teaching financial literacy, there’s often a tendency to shield children from mistakes or losses. 

However, learning to fail and recover is one of the most valuable lessons in finance. 

If children only experience controlled success, they may not be prepared for the real-world ups and downs.

   4. Excessive Focus on Future Success Can Steal Present Joy

Parents often invest in their kids’ education, extracurriculars, or financial futures with the hope of ensuring long-term success. 

While well-intentioned, this can sometimes create pressure that detracts from a child’s present happiness and well-being. Kids need time to be kids.

   5. Investment Can Shape Identity—For Better or Worse  

When parents invest heavily in a child’s passion—whether it’s sports, music, or academics—there’s a risk that the child may feel defined by that one thing. 

This can limit their ability to explore other interests or feel valued outside of that singular identity.

FAQ

How do I balance investing in my child’s passions without pushing them too hard?

It’s essential to encourage your children’s interests without overwhelming them or making it feel like a chore. 

The goal is to support their growth while allowing them the freedom to explore.

Can I involve my children in managing their custodial investment account, and at what age should I start?

Involving your children as early as ages 12–14, depending on their maturity, can be a great way to teach them financial literacy. 

You can explain how their account grows, show them the basics of stock markets, and even let them pick small investments.

How do family vacations contribute to my children’s emotional development?

Family vacations offer more than just fun experiences. 

These experiences can also reduce stress and improve their ability to adapt to new situations, making vacations an investment in emotional growth and maturity.

What if my child doesn’t want to take over the family business?  

Even if your child doesn’t wish to inherit the family business, the skills they learn—such as financial management, leadership, and critical thinking—are invaluable.

You can frame the business as a learning experience that equips them for any career path. 

Is there a way to combine financial literacy education with real-life lessons? 

Yes! One approach is to involve your children in decision-making processes for family investments. 

For example, you can show them how to evaluate properties before purchasing real estate or let them help with basic tasks in the family business. 

This article was written in cooperation with Rankwisely