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How To Make Your Children Millionaires Before They Leave Home

If you don’t believe the world will grant your children a fair chance to succeed, you may want to take matters into your own hands as parents. One way is to set them up for financial independence—ideally making them millionaires before they graduate high school, finish college, or leave home.

If your children are millionaires by adulthood, rejections from colleges or employers will matter far less. With financial security, they can live independently, buy a car with cash, and afford a 20% down payment on a median-priced home. Once housing and transportation are covered, most other expenses become manageable.

I know some may find the idea of making their children millionaires unrealistic, even absurd. But in 2025, what feels even more absurd is the existence of different standards for different people based on their identities. I fully support helping those from disadvantaged economic backgrounds and individuals with disabilities. But penalizing people for anything else but who they are feels off.

That’s why the most logical solution is to achieve financial independence—so you and your children don’t have to rely on biased gatekeepers. They are everywhere.

Becoming Millionaires vs. Receiving Millions

It’s important to distinguish between parents simply handing their kids a million dollars and children becoming millionaires through hard work, saving, and investing. I want the latter—so they learn the fundamentals of personal finance and develop a strong, consistent work ethic.

Plenty of families can afford to give their children substantial wealth. I frequently see The Bank of Mom & Dad in action—buying their kids cars, homes, and even covering private school tuition and groceries. That’s certainly their right. However, providing too much financial support can create long-term dependence—the exact opposite of financial independence.

That’s why, using ProjectionLab’s fantastic wealth-planning tools, I want to explore whether it’s even possible to help children become millionaires before they leave home. Once you log onto ProjectionLab, simply input the goals as shown below. Now let’s run through some scenarios!

Make your children millionaires using ProjectionLab's financial tools tools

How A Child Can Become A Millionaire By The Time They Leave The House

Now that we’ve discussed why it may be beneficial for a child to become a millionaire before adulthood, let’s break down exactly how to make it happen. The two primary ways are through work and investing. The sooner a child starts, the better—thanks to the magic of compound growth.

Working As A Child

As a general rule, the Fair Labor Standards Act sets the minimum age for employment at 14, with limits on the hours worked for those under 16. But if a kid wants to become a millionaire by 18, starting work at 14 may be too late.

I worked at McDonald’s for $4/hour at 15. It was a terrible job, and I blew all my money on movies, sports gear, and going on dates. If I had been smarter, I would’ve started working earlier and invested my earnings instead.

But at the time, the Roth IRA had not been invented yet. Further, my parents were not personal finance enthusiasts with million-dollar mindsets. But you are by the very fact that you’re excited reading this post!

Luckily, kids today have more opportunities to earn income before age 14, such as:

Selling candy and other items to classmates
Mowing lawns or raking leaves
Tutoring other kids
Babysitting
Modeling for marketing materials
Running a YouTube or TikTok channel
Blogging about games or hobbies

The key is to generate income from outside the household, expanding the income pie instead of just shifting it around from Bank of Mom & Dad to child. If a child can make money from both external sources and their parents, even better.

Investing As A Child To Become A Millionaire

There are three primary ways a child can invest:

Roth IRA – Contributions must come from earned income. If a child earns money, opening a Roth IRA is a no-brainer to save on taxes.
Custodial Investment Account – Funded by both earned income and parental contributions, with parents maintaining control until adulthood.
529 College Savings Plan – Contributions usually come from parents or grandparents, but this can still be part of a child’s net worth since education is an asset. Children can also contribute to their 529 plans. Let’s just consider this a bonus for now.

Below we input the assumptions in ProjectionLab.

Make your child a millionaire via Roth IRA, Custodial Investment Account, and 5292 College Savings Plan using ProjectionLab's tools

How Much To Earn and Invest to Become a Millionaire

Let’s calculate how much a child must earn and invest to reach $1 million by ages 18, 22, and 25. 18 is usually the age kids graduate from high school. 22 is usually the earliest a kid graduates from college. And 25 is an age where I’d like the adult child to finally leave home.

Millionaire By 18: Starting At Birth

If a child starts investing from birth, they have the most time for compounding. Here’s how it could work:

Parents own a business or start a side hustle and legally employ their child for marketing or content creation.
The child earns enough to max out a Roth IRA at $7,000 annually.
All additional earnings ($20,000) go into a custodial investment account.
Parents contribute $36,000 annually to a 529 plan.
Investments grow at 8% annually for stocks and 5% for the 529 plan.

Here’s what the road to millionaire by 18 starting at birth would look like using ProjectionLab:

How to make your children millionaires starting at birth until age 18 - ProjectionLab tools

Projected Net Worth at 18:

Roth IRA: $7,000/year at 8% for 18 years = ~$265,000
Custodial Investment Account: $20,000/year at 8% for 18 years = $759,000

Combined, the child reaches a net worth of $1,024,000. Hooray! All a child has to do as soon as they come out of the womb is earn $27,000 a year for 18 years and earn an 8% compound annual return. But wait, there’s the 529 Plan balance to calculate as well.

529 Plan: $36,000/year at 5% for 18 years = ~$1,020,000

Total Net Worth by 18 including the 529 Plan: ~$2,045,000. Any leftover funds in a 529 Plan can be reassigned to another beneficiary, such as future grandkids. Additionally, as of now, up to $35,000 of unused 529 funds can be rolled over into a Roth IRA.

While including a 529 Plan in your child’s net worth is debatable, it remains one of the most tax-efficient ways to transfer wealth across generations. If your children have kids of their own, any remaining 529 funds will be a valuable resource. After all, one of the primary reasons parents work, save, and invest is to fund their children’s education.

Excluding the 529 College Savings plan would look like this:

How to make your child a millionaire before becoming an adult, excluding the value of 529 plan

Millionaire By Age 22 Starting At Age 8 (14 years):

Let’s say making money as a baby is simply out of the question, which for most families, it is. Then how about we assume your child starts at a more reasonable age to make money, at age eight, and works and invests for the next 14 years. My son is eight this year and I definitely plan to put him to work as a Financial Samurai employee. He’ll learn how to edit and update older posts.

Let’s calculate how much he would need to earn, invest, and return to get to $1 million by age 22 starting at 14. Below are the various assumptions I’ve plugged into ProjectionLab.

Income assumptions to make your child a millionaire by age 22 starting at age 8 (14 years of earning, saving, and investing) using ProjectionLab's tools

Roth IRA: $7,000/year average at 8%: $186,000
Custodial Account: $6,765/year at 8%: $179,000
529 Plan: $32,000/year at 5%: $663,000
Total: ~$1,029,000
Annual Contribution: $45,785

Earning and investing $13,765 a year on average for 14 years seems completely reasonable. A child would need to work for 13.3 hours a week at $20 an hour to get to $13,765 a year. I think this is highly feasible, especially given the minimum wage should go up over this time period. But this would only get the child to a net worth of $365,000 at age 22. Not bad, but no millionaire.

ProjectionLab cash flow diagram on where income and tax-free parent contributions go to Roth IRA, Custodial Account and 529 plan — Cash flow analysis using ProjectionLab

If we exclude the 529 Plan, then the child would have to increase their annual saving and investing amount from $13,765 to $45,785 to become a millionaire by 22 all by themselves. That sounds difficult to do as a full-time student. However, there are plenty of ways to make money online now that could easily surpass $45,785 a year. We’ll see how in the section below.

Millionaire By 25: Starting At Age 14 Without Parental Contribution

If making your kid work at eight still sounds too extreme, let’s start at age 14 and continue until age 25. By starting at 14, a child can become a millionaire by age 25 without parental contributions if:

Child earns: $61,000/year
- Roth IRA: $7,000/year at 8% for 11 years → ~$118,000
- Custodial Account: $54,000/year at 8% for 11 years → ~$914,000
Total Net Worth by 25: ~$1,032,000
Requirement: The child must generate $61,000 in annual earned income (e.g., through a successful online business, content creation, or rare talent).

However, that’s after taxes. After years of paying Uncle Sam, your kid would actually have $139K less in their custodial account—meaning they’d need to work two more years or earn closer to $70K per year to reach millionaire status.

Alternatively, The Bank of Mom & Dad can simply make up the difference. If your child starts diligently working at age 14 for 11 years and does something entrepreneurial, it would be hard for a parent not to help out in some way. That’s quite a responsible child!

Becoming a millionaire by age 25 starting at age 14 - ProjectionLab calculations

How To Earn $61,000 A Year Starting As A Teenager

Earning $61,000 a year after taxes from age 14 to 25 (an 11-year span) is a lofty goal for a teenager, especially starting with no prior income or experience. This averages out to about $5,083 per month or roughly $1,250 per week.

For context, that’s well above the U.S. federal minimum wage for full-time work ($7.25/hour, or $15,080/year for 40 hours/week). Further, teens face legal restrictions on hours and job types, plus the demands of school. Still, it’s not impossible with exceptional effort, creativity, and some luck.

Here are realistic ways a child could work toward that income level, assuming they sustain it annually from 14 to 25. Please remember that I’ve been technically making money online since 2009, so I have a deep understanding of how to do so.

1. Start a Scalable Online Business

What: Launch a business like dropshipping, print-on-demand (e.g., t-shirts, mugs), or digital product sales (e.g., eBooks, templates) via platforms like Shopify, Etsy, or Gumroad.
How: At 14, they could begin with a low-cost niche (e.g., gaming merchandise or study guides for peers), reinvesting profits to scale. By 16–17, with a strong social media presence (TikTok, Instagram, YouTube), they could drive serious traffic.
Earnings Potential: Early years might net $5,000–$10,000 annually, but by 18–25, a well-run operation could hit $61,000/year with consistent growth and marketing savvy.
Realism: Requires learning digital marketing and some upfront cash (e.g., $500–$1,000), but teens like Isabella Barrett (millionaire by 6 via jewelry) show kids can scale businesses young.

2. Content Creation (YouTube, Twitch, TikTok)

What: Create videos or streams—gaming, tutorials, vlogs, or niche hobbies—monetized via ads, sponsorships, and merch.
How: Start at 14 with a parent-managed account (YouTube requires 13+, Twitch 13+ with supervision). Build a following over years; monetization kicks in with 1,000 subscribers and 4,000 watch hours (YouTube) or 50 followers and consistent streaming (Twitch).
Earnings Potential: Top earners like Ryan Kaji ($30M/year at 9) are outliers, but $61,000/year is doable by 18–25 with 50,000–100,000 followers and multiple revenue streams (ads: $3–$5/1,000 views, plus deals).
Realism: Takes 2–3 years to gain traction, plus editing skills and persistence. Many teens abandon this early, but those who stick with trends (e.g., short-form content) can break through.

Or maybe they burn out or face an algorithm change that drastically cuts their income—something that happens all the time in the online world, especially now that AI is reshaping industries. Even after grinding through school and going full-time post-graduation, income isn’t always guaranteed to last.

With ProjectionLab, I can model out different scenarios, including potential income drop-offs. But by the time that happens, the child is already a millionaire, thanks to smart earning, investing, and compounding. Running these projections helps ensure financial security, no matter what life throws their way.

Becoming a millionaire as a child through entrepreneurship - ProjectionLab

3. Freelancing High-Value Skills

What: Offer services like graphic design, coding, video editing, or writing on platforms like Fiverr or Upwork.
How: At 14, learn skills via free resources (YouTube, Codecademy). By 15–16, take small gigs ($10–$20/hour), building a portfolio. By 18, charge $50–$100/hour for specialized work (e.g., app development).
Earnings Potential: $61,000/year means ~1,220 hours at $50/hour—about 23 hours/week. Teens could hit this by 17–18 with hustle and skill.
Realism: Requires self-taught expertise and client trust (harder as a minor), but teens like Stanley Tang (DoorDash co-founder at 20) prove young talent can earn big.

4. Competitive Gaming or Esports

What: Compete in games like Fortnite, Valorant, or League of Legends, earning prize money and sponsorships.
How: Start at 14 practicing 20–30 hours/week, joining amateur tournaments (e.g., via Battlefy). By 16–17, aim for pro qualifiers or streaming revenue.
Earnings Potential: Top players earn millions, but mid-tier pros can make $50,000–$100,000/year by 18–25 via winnings and deals.
Realism: Needs elite skill (top 1% of players) and parental support for travel. Most don’t make it, but dedication can pay off—e.g., Kyle Giersdorf won $3M at 16 in Fortnite. If you become a top player, you can then create content on YouTube and monetize your content since you have authority. Just know that all this screen time at a young age may not be good for kids.

5. Teen Entrepreneur with Local Services

What: Run a service like lawn care, car washing, or tutoring, expanding to a small crew by 16–17.
How: At 14, charge $20–$30/job in the neighborhood (legal under FLSA exemptions for self-employment). By 16, hire friends, scale to $100–$200/day.
Earnings Potential: 10 lawns/week at $30 = $15,600/year initially; scaled to 20 jobs/week at $50 = $52,000/year by 18, plus extra summer work to hit $61,000.
Realism: Doable with hustle and word-of-mouth, though limited by school hours (max 18 hours/week during terms for 14–15-year-olds).

6. Investing In The Stock Market And Other Risk Assets

What: Invest earnings in the S&P 500, growth stocks, or even crypto via a custodial account, aiming for high returns.
How: At 14, use income from chores or small gigs ($5,000/year) to invest via a parent-managed account. Focus on growth stocks or volatile assets (e.g., Bitcoin), that have the potential to compound at an even higher rate than the S&P 500.
Earnings Potential: $5,000/year at 15% average return over 11 years = ~$163,000 total, but active trading could push annual gains to $61,000 by 20–25.
Realism: Risky with a higher probability of losing money. Requires financial literacy and luck. Most active traders underperform the S&P 500 or index of their choice. However, you can get lucky. I invested $3,000 in a Chinese internet company called VCSY in early 2000 and it went up 50X. So you never know unless you try.

Putting It Together To Become Millionaire By 25

A realistic path might combine these:

Ages 14–16: Start with freelancing ($10,000/year) and content creation (building audience).
Ages 17–19: Scale freelancing to $30,000/year, monetize content for $20,000/year, add local services ($15,000/year).
Ages 20–25: Hit $61,000/year consistently as skills, audience, and business mature.

Of course, this path won’t be easy—but nothing worthwhile ever is! More importantly, nothing happens if the teenager doesn’t start. As parents, we should do everything we can to teach, encourage, and support them, all while ensuring they stay on top of their schoolwork. The earlier they begin, the greater their financial advantage will be.

Parental Financial Match: A Likely Necessity

To make it easier for their children to reach a million dollars by the time they are adults, parents can implement a parental match, similar to how companies match 401(k) contributions to encourage savings. A reasonable match could range from 20% to 100% of what the child earns. However, exceeding a 100% match may diminish the child’s sense of pride in earning money independently.

For example, if a child needs to earn $61,000 per year on average from age 14 to 25 to reach millionaire status, a 100% parental match would reduce their required earnings to $30,500 annually. However, parents should be mindful of tax implications when gifting amounts above the gift tax exclusion, which is $19,000 per parent or $38,000 per married couple per child.

Parents matching income to help their children becoming millionaires — What a parental financial match looks like using ProjectionLab

The Ideal Parental Financial Match For Their Kids

Personally, I believe matching up to the annual gift tax exclusion is a great strategy, especially if you anticipate your estate growing beyond the estate tax threshold ($13.99 million per person). This approach encourages the child to earn at least up to the gift tax limit, fostering both financial responsibility and motivation. If they aspire to earn more, the rest is up to them.

By having parents contribute, it creates buy-in from them as well. This involvement encourages parents to share their financial wisdom, helping their children develop a stronger understanding of wealth-building. As a result, children are more likely to take their finances seriously and make smarter financial decisions in the future.

Final Thoughts on Making Your Child a Millionaire

Becoming a millionaire by age 25—let alone 18—isn’t easy, but with the right combination of earning, investing, and compounding, it’s achievable. It’s far more realistic to help your child build wealth than to expect them to earn straight A’s, score a 1,590 on the SAT, and still face rejection from top colleges.

Even if they fall short of the millionaire mark by 18, 22, or 25, they’ll still have significant financial security and strong personal finance fundamentals to guide them through life.

Parents play a crucial role in this journey by sharing financial knowledge and expanding opportunities beyond the traditional 9-to-5 path. The more we understand how money is made and grown, the more we can pass those lessons on, fostering an entrepreneurial mindset that can pay dividends for generations.

The world will never be perfectly fair. But that doesn’t mean we shouldn’t try our best, even when the odds are stacked against us. As a Financial Samurai, you don’t complain—you take action! A strong financial foundation gives us the power to navigate challenges with confidence and independence.

Imagine This Dream Scenario for Parents

Imagine this plan in action. With the right mix of parental support, hard work, and smart financial decisions, your child becomes a millionaire by 18, buys a duplex at 21, upgrades to a single-family home at 27, and reaches a $2.5 million net worth by 30.

Thanks to their financial security, they are generous, grounded, and able to pursue a meaningful career. While working to save the rainforest—and rescuing baby pandas along the way—they meet another nature lover. One thing leads to another, and they fall in love, get married, and start a family years later.

As parents, you feel immense satisfaction knowing you gave your child the foundation for a fulfilling life. Then, as grandparents, you experience another layer of joy. And when your time comes, you leave this world at peace, knowing your family is secure—all thanks to a little financial planning early on.

Priceless

A child became a millionaire by 18, bought a home at 27, and grew net worth to $2.5 million using ProjectionLab's tools

To help you and your child visualize and plan this journey, I highly recommend ProjectionLab. With its powerful financial modeling tools, you can create detailed, personalized projections for net worth growth, investment strategies, and financial milestones.

Whether you’re mapping out their path to becoming a millionaire or fine-tuning your own financial independence plan, ProjectionLab makes it easy to test different scenarios and optimize your strategy.

Reader Questions

What are your thoughts on helping your children become millionaires before they leave home? If done right, wouldn’t this set them up for a much happier and more secure future? On the flip side, could teaching kids about hard work, investing, and money management too early have unintended downsides?

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise. I use ProjectionLab and it is a Financial Samurai affiliate.

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The Most Common Tax Planning Mistakes For High Earners

If my posts on the mistake of chasing value stocks or the need to invest big money to make life-changing money don’t resonate, consider hiring a financial professional to manage your portfolio. You may not be obsessed enough to consistently invest the amount needed to retire comfortably. Offloading the burden of investing frees up your time and energy to focus on work, family, and hobbies.

At this moment, I’m preparing to do my taxes again. Every year I file an extension (Oct 15 deadline) because of delayed K-1s from private fund investments. So when Empower reached out about highlighting tax planning mistakes for high earners, I agreed. It’s a topic I know all too well.

What I didn’t realize is that Empower offers tax planning as part of its standard client service. No extra invoices, no $300/hour CPA bills. Just integrated advice, included in the management fee. Considering that taxes are often the single largest expense for high-income earners, having proactive strategy baked in is a big deal.

The Importance Of Tax Planning For High Income Earners

When you’re a high earner—think $250,000+ income or the potential to get there—you’ve probably got a lot on your plate: investments, real estate, maybe a business or two. What you might not be paying enough attention to? Tax planning.

It’s not sexy like a moonshot AI stock, but the compounding effect of smart, consistent tax moves can rival investment returns over time. As Empower Personal Wealth specialist Scott Hipp, CPA, CFP® explains, for high-income, high-net-worth clients, tax planning isn’t about chasing one-off loopholes, it’s about proactive, coordinated, year-round strategy.

Let’s dive into four key questions Scott answered that reveal just how much value smart tax planning can deliver. If you’re searching for a financial professional to manage your wealth, choosing one that integrates tax planning into their service is essential, not an add-on.

Empower has been a long-time affiliate partner of Financial Samurai, and I personally consulted for Personal Capital (later acquired by Empower) from 2013 to 2015. I’ve seen firsthand how incorporating tax strategy into wealth management can meaningfully boost long-term returns.

1. Why is tax planning critical for high earners?

When you’re in the top federal tax brackets—32%, 35%, or 37%—every strategic move counts more. Saving 1% on taxes for someone making $100K is nice. Saving 1% for someone making $800,000? That’s four first-class tickets to Hawaii with a couple thousand left over.

Scott says most people think of tax planning as a once-a-year scramble or a hunt for magical loopholes (“I heard Uncle Bob pays zero taxes because he made his dogs employees…”). The truth: the biggest gains come from small, consistent, legal moves year after year.

It’s like The Shawshank Redemption: pressure and time. Maxing out a health savings account, backdoor Roth contributions, charitable “bunching,” and tax-loss harvesting may seem minor in isolation, but over 20 years, they can carve a serious tunnel toward financial freedom.

Here’s the danger: by the time you file in April, most opportunities are gone. If you’re filing 2025’s taxes in April 2026, your deadline for most strategies was December 31, 2025. That’s why Empower’s team works year-round—advisors and tax specialists meet regularly to tweak and optimize before the clock runs out.

2. What’s the deal with the SALT deduction changes?

The State and Local Tax (SALT) deduction cap got a temporary boost after the passage of The One Big Beautiful Bill Act on July 4, 2025. It’s $40,000 in 2025 (up from $10,000), rising slightly each year until 2029, before reverting in 2030.

Who benefits? Mostly taxpayers with AGI under $500K in high-tax states. Hit $600K AGI, and the expanded cap phases out completely.

But even high earners over $600K aren’t out of luck—if you own a pass-through business (S-corp, partnership, LLC taxed as such), you might use the Pass-Through Entity Tax (PTET) workaround. Here, the business pays state taxes, making them fully deductible federally, and you get a state tax credit. As of 2025, 35+ states have a PTET option.

For the right clients, SALT changes + PTET can unlock deductions worth tens of thousands—money that stays in your portfolio instead of the IRS’s coffers.

3. How does Empower approach complex high-earner situations?

Let’s say you’re a business owner with significant investment income, passive rental income, and real estate holdings.

With Empower, you basically have a “tax specialist on demand” baked into your fee – no surprise bills. The process starts with:

Reviewing the past three years of returns for missed opportunities. (You’ve got three years to amend and claim a refund.) Empower can spot thousands in overlooked deductions.
Holistic planning based on your goals. Tax strategy isn’t in a vacuum—it’s tied to your investment plan, estate goals, and cash flow needs.

Common missed opportunities for self-employed clients:

Not deducting health insurance premiums.
Missing the Qualified Business Income (QBI) deduction.
Ignoring home office deductions.

More common errors Empower can help catch:

Capital loss carryforwards lost when switching preparers/software
Incorrect Backdoor Roth processing
Missed Foreign Tax Credit
Wrong cost basis for stock sales (ESPP, options)
HSA distributions taxed in error

From there, Empower looks forward—maybe setting up a solo 401(k), timing income, or planning capital gains. The idea is to create an ongoing tax playbook, not just fix past mistakes.

4. What real-world tax savings have clients seen?

Missed health insurance deductions are surprisingly common—and costly.

S-Corp owner: CPA added health insurance premiums to W-2 wages (correctly) but never told the client they could deduct those premiums above the line. Amending three years’ returns saved ~$6,000 in federal taxes.
Sole proprietor: Deducted health insurance as a Schedule A itemized deduction, but couldn’t benefit due to medical expense thresholds and not itemizing at all. Amending saved ~$7,500.
Medicare premiums: Many don’t know they qualify as self-employed health insurance deductions. Catching this can save $1,000+ per year.

These aren’t flashy hedge-fund-like wins—but they’re guaranteed returns via tax savings, often compounding over years.

Key Strategies Empower Uses for High Earners

Scott shared a few proactive moves that come up again and again:

Bunching Charitable Contributions

Standard deduction in 2025: $15,750 (single) / $31,500 (married). By combining two or more years of donations into one tax year, you can exceed the standard deduction, itemize that year, and take the standard deduction the next—resulting in a bigger total deduction over time.

Bonus: Donate appreciated assets or use a Donor-Advised Fund for even more efficiency.

Tax Loss Harvesting

Selling investments at a loss to offset gains elsewhere—then reinvesting in similar (but not “substantially identical”) assets—can lower your current-year tax bill while keeping your portfolio allocated. All Empower Personal Strategy clients ($100K+) minimize your tax burden with proactive application of tax-loss harvesting and tax location.

Roth Conversions

Moving funds from a traditional IRA to a Roth IRA lets you lock in today’s tax rate if you expect to be in a higher bracket later. Future withdrawals? Tax-free. This is especially powerful in lower-income years before RMDs kick in.

Saving Money On A Good CPA

A good CPA might charge $150–$400/hour just for tax consultations. Meanwhile, many don’t offer proactive planning at all, focusing instead on compliance and filing.

Empower builds tax planning into its overall wealth management service for clients with $100K+ in investable assets. That means:

One fee, one integrated plan.
Advisors and tax specialists in the same room (or Zoom) all year.
Proactive calls before the deadlines—not “we’ll see you next April.”

The Bottom Line

Big investment wins get the headlines, but year after year, quiet, boring, proactive tax moves can be worth just as much, sometimes more. For high earners, ignoring tax planning is like leaving compounding on the table.

If you’ve got $100K+ in investable assets, Empower is offering Financial Samurai readers a free consultation. Even if you’re confident in your current plan, a second opinion could uncover thousands in missed opportunities.

For a limited time only, book your free, no obligation session here. An Empower professional will review your investments and net worth, and offer some suggestions on where you can optimize, all for free.

Empower’s Tax Optimization Services

Tax optimized investing (tax loss harvesting, tax location, tax efficiency): available to clients investing $100K+.

Tax planning guidance (analysis and recommendations – identify gaps and opportunities in your tax strategy before you file with your advisor and tax specialist): available to $250K+.

At $1M+, clients receive the above, in addition to access to a CPA, at no additional cost.

Disclosure: This statement is provided by Kansei Incorporated (“Promoter”), which has a referral agreement with Empower Advisory Group, LLC (“EAG”). Learn more here.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is the leading independently-owned personal finance site today, established in 2009.

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How To Eliminate That Intense Financial FOMO You’re Feeling

Back in 2012, I thought I had finally conquered financial FOMO after walking away from a well-paying finance job. But after having children, I’ve noticed more and more relapses. If you’ve found yourself battling the desire for more money than you truly need, this post is for you.

Ever since returning to San Francisco from our 36-day trip to Honolulu, I’ve been feeling a greater sense of FOMO. The first week back hit especially hard when Figma IPOed and surged 333% on its first day. Suddenly, we were right back to frenzied markets, with retail investors piling in at sky-high prices.

In Honolulu, my focus was on mainly three things: 1) family, 2) exercise, and 3) remodeling my parents’ in-law unit. Those three priorities consumed all my bandwidth. Between supercommuting and construction, I was spent most days, with little time left to think about chasing investments.

Pickleball and then the beach were my escape. While waiting for the next game, conversations revolved around recapping rallies, kids, or which store sold the best Pirie mangoes. Careers and investments never came up, except when I asked a couple players about Honolulu’s cost of living. The vibe was refreshingly present, grounded, and calm.

The Return Back Was Somewhat Jolting

I had never taken my family on such a long trip before, so the contrast with life back home was especially clear.

With just the four of us at home, family logistics became simpler, familiar camps smoothed out childcare every other week, and the remodeling burden was finally lifted. With all that mental headspace freed up, my mind inevitably drifted back to the markets and to the unsettling realization that the AI boom was racing ahead without me.

On the pickleball courts here, the chatter couldn’t have been more different. Nearly everyone was talking about tech stocks, the bull market, and the next big AI play. Why? Because nearly everyone either works in tech or invests heavily in it. There was no escaping the mania. I found myself longing for the calmer rhythm of Honolulu again.

The Moment That Reduced My FOMO Tremendously

Then something unexpected happened that broke my financial FOMO fever. The first weekend back home, I went to a neighborhood gathering at a local park. Familiar faces were everywhere, including one dad I occasionally hang out with. He works in venture, so I asked whether he ever felt the same financial FOMO I’d been struggling with since returning.

He shrugged. “Kinda, but not really.” Why would he? He spends his days looking for the next big winner, so opportunities are always flowing across his desk. Though he did mention once passing on a company that went on to be a huge success.

That surprised me. If anyone should feel FOMO, it’s investors who had the chance and said no, far worse than never getting a look at all, which is the reality for most of us. If I never had the opportunity, then there was no missing out in the first place. But it also made sense he didn’t feel much financial FOMO since he was already immersed in the hunt for more.

We kept chatting. He asked how my summer had been, so I shared some stories from our time away. Naturally, I asked about his summer too, expecting to hear about some big trip since his family had traveled a lot before. But instead, he told me they hadn’t gone anywhere. He’d been too busy working. Two months into summer, and he was still grinding away.

That was my “ah hah” moment. Suddenly, my financial FOMO evaporated. Here was someone, at least twice as wealthy as me, stuck at home because of work. It reminded me of my banking days, when I had to ask for permission to take vacation—like a kid asking his parents for pocket money. What a crock!

I’m sure his hard work this summer will make him millions more. But he’s already rich. At our age, I don’t want to sacrifice too much time with my kids for incremental wealth that won’t materially change our lifestyle. 18 summers isn’t a lot. I’ve got enough passive income to cover our family’s basic needs. That freedom, I was reminded, is worth more than chasing the next big score.

The Six Steps To Reducing Your Intense FOMO

Financial FOMO comes from comparison, insecurity about our own progress, and the fear of missing a once-in-a-lifetime opportunity. It tends to peak during bull markets, when it feels like everyone else is getting rich except you.

I’m not sure anybody is truly immune to financial FOMO. You can be wealthy, financially independent, retired, or even work in venture capital, and still feel it. But FOMO left unchecked can push you into bad investment decisions, such as buying at peaks, overextending on margin, or constantly second-guessing yourself.

Here are six tactical yet practical steps that may help you manage FOMO better:

1) Build a Core Portfolio You Rarely Touch

One of the best ways to combat FOMO is to remind yourself that you already own a piece of the future. If you’re invested in equities, real estate, Bitcoin, or venture, you’re covered. Even holding something as simple as the S&P 500 means you’re participating in the ongoing growth of our economy. The exact mix of your asset allocation is up to you. What matters most is having a stake in assets that can carry you forward, so you don’t feel pressured to chase every hot new opportunity.

I keep the bulk of my public equity investments in broad index funds. Meanwhile, about 40% of my net worth in real estate, and 15% in private companies.With a solid core, it becomes much easier to tune out the noise and ignore the hype cycles.

For example, if AI truly sparks a wave of IPOs, new startups, and thousands of newly minted millionaires, at least my San Francisco real estate should benefit. I recently experienced a rental bidding war for one of my properties and that’s before the AI IPO wave has even arrived. Investing in the picks and shovels helps ensure you will financially benefit, no matter what.

2) Allocate a “FOMO Fund”

Instead of trying to suppress the urge to participate, give yourself permission, but with guardrails. Roughly 40% of my public equities are in individual growth names, mostly tech. This way, when I see headlines about breakthroughs, like quantum computing, I feel like I’m part of the story rather than left on the sidelines. Of course, during the next correction, I will also lose more than the average index fund investor too.

I’ve also carved out a dedicated “FOMO Fund”—about 5% of my overall portfolio—for speculative money. That’s where I can dabble in individual private companies, new venture funds, or even short-term trends. If it pays off, great. If not, it won’t derail my financial plan. By containing the risk, you scratch the itch while protecting your long-term wealth.

3) Systematize Your Investing With Automation

One reason FOMO hits so hard is because investing often feels optional and emotional. A simple antidote: automation. Dollar-cost averaging into index funds, ETFs, individual stocks, or funds removes the decision-making stress. When money flows into the market on a schedule, you don’t sit around debating whether to chase the next hot stock. Instead, you’re already steadily invested, no matter what the headlines say.

For example, after opening a new personal Innovation Fund account earmarked for my kids with $26,000 ($500 bonus if you invest over $25,000), I enrolled in auto-invest at $2,500 a month. It’s enough out of my cash flow to feel involved without feeling strain. One year later, that’s $30,000 invested; after 10 years, $300,000.

Without automation, it’s easy to fall off track because life gets busy. I have over 30 investment accounts to manage between the four of us. Inevitably, I’m going to miss something, which is why automation is so important to free up mental bandwidth.

I’m concerned my kids may have little chance of becoming financially independent on their own in an AI-driven, hyper-competitive world. Therefore, every dollar I automate for them helps reduce that concern, while ensuring their money is working even if I get distracted.

Make investment contributions automatic through monthly auto-investing to help you reduce financial FOMO

4) Use Opportunity Cost as a Filter

Before jumping on the next hot idea, I try to ask: What am I giving up if I do this? Am I sacrificing cash flow, peace of mind, or time with family? Am I risking capital I’ll need in five years for housing, education, or flexibility? During bear markets, I certainly get a little more moody. By forcing yourself to weigh trade-offs, you realize some FOMO-driven decisions don’t actually pass the test. I

As someone who enjoys investing more than spending, this opportunity cost exercise often flips for me. I tend to think instead: What is the opportunity cost of spending money on something I don’t really need versus the potential returns if I invested it? Buying this unnecessary $120,000 Range Rover could turn into $300,000 in five years if invested well!

Still, the reality is that not all investments work out, especially the most speculative ones. Corrections and bear markets are a natural part of investing. Which is why it’s worth asking a different version of the question too: What are the joys I’m giving up today in exchange for an investment that may never pan out? That balance helps keep you grounded, whether you lean toward spending or investing.

Losing Money Quickly

Just look at the Figma IPO. I suspect FOMO drove many investors to pile in on day one, paying $100–$133 a share. Fast forward just a few weeks, and the stock is already down about 40% from its peak. I would much rather have spent $25,000 on a memorable family vacation than invested it in Figma and watched $10,000 vanish in two weeks. YOLO!

Chasing hot IPOs at extraordinary valuations is dangerous, so please be careful. Instead, consider investing in these companies before they go IPO so you can sell to investors who experience maximum FOMO.

Always remind yourself that you can and will lose money when it comes to investing in risk assets. Sometimes, this fact is easy to forget during a bull market.

How to reduce financial FOMO and not chase hot IPO stocks like Figma

5) Define “Enough” Clearly

FOMO often creeps in when you don’t have a clear baseline for what success actually means to you. If your target is always a vague “more,” then no matter how much progress you make, someone else will always appear to be ahead – whether it’s their bigger house, higher net worth, or latest hot investment. That mindset makes contentment impossible.

What helps is defining enough. For me, that’s when passive income reliably covers our family’s basic living expenses. Once that box is checked, every dollar beyond is truly optional. I can put it toward growth investments, donate it, or try to spend it guilt-free on experiences.

After I hit a passive income target, I try and shift my mindset back toward an early retirement lifestyle. This means less striving, more enjoying. Anchoring to “enough” quiets the noise, and reminds me that I’ve already got enough.

Once you know your number and can sustain your lifestyle, you realize chasing endlessly isn’t freedom, it’s another form of bondage.

6) Change Your Environment

Finally, FOMO isn’t just about the markets, it’s about the people around you. Living in go-getter cities like San Francisco or New York means you’re constantly surrounded by the most ambitious and competitive people. Many of whom are making big money in tech, finance, or startups. The conversations, the headlines, even the birthday gatherings, it all feeds into a sense that you’re in this constant battle where you’re often falling behind.

One way to dial that back is to physically change your environment. Moving to, or even spending extended time in, a slower-paced city or town gives you space to breathe. Suddenly, not everyone is talking about the latest IPO or AI fundraise. Conversations shift to family, community, or quality of life.

It doesn’t mean giving up ambition or opportunity, you can still build wealth anywhere. But by lowering the ambient noise of competition, you reduce the constant comparison game that fuels financial FOMO.

Final Thoughts On Getting Rid Of FOMO

Markets will always swing from euphoria to despair, and there will always be someone making more money than you. But with a sound core portfolio, a small space to take punts, and a clear definition of enough, you can stay disciplined while still scratching the investing itch.

FOMO doesn’t disappear, but with the right systems, it can be managed so it doesn’t manage you.

Readers, do you experience financial FOMO? If not, how do you manage it so you don’t feel like you’re constantly missing out on financial gains? Interestingly, the vast majority of people I speak with in real life say they don’t really struggle with financial FOMO. That makes me curious — what strategies do you use to tame this beast?

Invest in AI So You Don’t Get Left Behind

AI is set to disrupt the labor market in a massive way, for you and for your kids. One way to hedge against that disruption is to invest in AI itself.

With Fundrise’s venture capital product, you can gain exposure to leading private AI companies like OpenAI, Anthropic, Databricks, Anduril, and more. The minimum investment is just $10, and new accounts currently get a $100–$200 bonus.

I recently opened a new account for my children with $26,000 and will auto-invest $2,500 a month for the foreseeable future. My hope is that by riding the AI wave, they’ll benefit from the very disruption that might otherwise work against them.

Fundrise is a long-time sponsor of Financial Samurai, and Financial Samurai is an investor in Fundrise products. Our investment philosophies are aligned. Overall, I’ve invested more than $350,000 in Fundrise Venture.

Fundrise Innovation Fund Financial Samurai investment amount and dashboard - Overcoming FOMO in AI by investing in AI — My current Fundrise Venture investment dashboard, excluding the $26,000 I recently invested for my children

Pick up a copy of my USA TODAY national bestseller, Millionaire Milestones: Simple Steps to Seven Figures. I’ve distilled over 30 years of financial experience to help you build more wealth than 94% of the population and break free sooner. When you’re ahead, that FOMO starts to disappear.

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