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In 1998, Jeremy Schneider got a job working at a summer camp where he earned over $1,300. His dad, Bob Schneider, decided to use the opportunity to teach his son about investing.
Just one year earlier, in 1997, the Roth IRA retirement account was introduced as part of the Taxpayer Relief Act. Knowing how much his son’s earnings could grow over the years, Bob invested $1,300 in a Roth IRA for Jeremy.
Today, 22 years later, that same account has grown to be worth more than $120,000 because Jeremy himself continued to contribute to it.
The lessons Jeremy learned from his dad stuck with him throughout his life, and helped him retire at age 36 after he sold his company, Rentlinx, an advertising website for rental properties. He walked away with $2 million, but instead of spending it, he invested it. Now, at 40, he’s not only living off his wealth, but he’s managed to double his net worth.
Below, Jeremy shares some key lessons he learned from his dad.
1. Invest to build wealth over the long term
When Bob opened up a Fidelity account for Jeremy, he also printed out a compound growth spreadsheet. The document included Jeremy’s age and listed possible contribution amounts to show his son how much his money could grow over time if he continued to make contributions to it.
“I think between the compound growth worksheet, and then the choosing of the mutual fund, and understanding that this is how investing works, I kind of saw the light at an extremely early age and the power of investing over time as opposed to people who are my age now, which is 40, and suddenly retirement gets on their radar,” Jeremy said.
2. Live frugally to make the most of your earnings
As a child, Bob’s frugality was a little annoying for Jeremy. Super-sizing his McDonalds meal was out of the question. He and his brother had to adhere to strict budgets when it came to spending on wants, like shoes. But, that habit sunk into Jeremy’s mind as he began to perceive money as something to be treasured and carefully used.
“My dad saw [frugality] in every way possible, like not letting a dollar or a penny leave your hand unless it’s absolutely necessary. For me, it’s more of what’s relative to your means. So it’s just about spending less than you make,” Jeremy said.
When Jeremy was building up his company, the first few years he went without an income, living on an extremely tight budget. Even when his website began to generate revenue, he kept his salary minimal, had roommates, and drove an old car he paid for in cash.
3. Build and maintain a high credit score
As a teenager who was becoming an adult, Jeremy’s dad was key to helping him understand how to build good credit. He witnessed his father pay off his credit card bills every month.
Bob didn’t use his credit cards to purchase things he didn’t have money for. Instead, they were used to make necessary purchases more convenient if he didn’t have cash.
When his dad helped him apply for his first credit card, he advised him to always keep his oldest credit card active because a credit score is determined in part by the length of your credit history. He also told Jeremy to avoid a card that had annual fees to save money.
Laila Maidan is the personal-finance-storytelling fellow at Insider. She covers personal stories about peoples’ financial journeys. Have a story about a financial accomplishment to share? Email email@example.com.