The road to happiness is paved in financial security.

As a parent, you want your children to be happy, even after they become adults. You also know the path to happiness is paved in financial security, and the surest way to pave that path for the long road ahead is by investing. But while you know this, your millennial children may be less clear on its veracity. To help you help them start investing, financial professionals share their best tips to teach your millennial to invest.

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Model good financial behavior.

Leading by example is never more impactful than between parents and children. Nela Richardson, an investment strategist at Edward Jones, says modeling good behavior is the first step for parents in teaching their adult children to invest. Millennials have closer relationships with their parents than previous generations in part because they probably lived with their parents a lot longer. As a result, millennials “tend to model boomer’s investing style,” she says. It’s important that parents are “sure-footed and progressing toward their retirement goals with a long-term strategy.” If you aren’t confident in your own investing, get help from a financial advisor who can guide you so that you can guide your children.

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The road to happiness is paved in financial security.

As a parent, you want your children to be happy, even after they become adults. You also know the path to happiness is paved in financial security, and the surest way to pave that path for the long road ahead is by investing. But while you know this, your millennial children may be less clear on its veracity. To help you help them start investing, financial professionals share their best tips to teach your millennial to invest.

Model good financial behavior.

Leading by example is never more impactful than between parents and children. Nela Richardson, an investment strategist at Edward Jones, says modeling good behavior is the first step for parents in teaching their adult children to invest. Millennials have closer relationships with their parents than previous generations in part because they probably lived with their parents a lot longer. As a result, millennials “tend to model boomer’s investing style,” she says. It’s important that parents are “sure-footed and progressing toward their retirement goals with a long-term strategy.” If you aren’t confident in your own investing, get help from a financial advisor who can guide you so that you can guide your children.

Take them to your financial planning meetings or a seminar.

When you do meet with a financial advisor, consider bringing your millennial along. Including your son or daughter in these conversations will help them get used to the financial lingo, says Amin Dabit, a certified financial planner and director of advisory services at Personal Capital. If you’re not comfortable sharing all your financial details with your adult children, see if your advisor will schedule a one-on-one just for your millennial. “Most advisors are happy to talk to kids about opening accounts, where to look for investments and how to make investment decisions,” Dabit says. Alternatively, you could attend a seminar together. Many investment firms offer educational seminars to clients and the public.

Share your own investing journey.

If you are comfortable baring a bit of your financial soul to your children, this can be a great teaching opportunity. Showing them even one part of your portfolio can be beneficial by letting them see how much your investments are worth now compared to how much you started investing with and when, Dabit says. “Being able to show them what you’ve done as a parent over a 10-, 20- or 30-year period” can be very impactful for your millennial, he says. The conversation can then devolve into how you’ve made your investing decisions and the resources you use.

Understand the millennial journey.

Regardless of how you start teaching your millennial to invest, an important first step is understanding the millennial journey, Richardson says. What’s important to them financially? “For millennials, it’s not just saving for retirement,” she says. They likely have numerous milestones, like paying off debt, starting a family, buying a home, traveling. The trick to helping your son or daughter start investing is “tying the actual savings to their goals,” Richardson says. This will help them “understand the importance of saving and how investing can help them reach their goals more quickly.”

Ask them questions.

As many parents know all too well, more effective than telling your children what to do, is asking questions. Take a Socrates approach to encouraging your millennial to start investing by asking questions about their financial life. Mike Kerins, RobustWealth founder and CEO, suggests querying your adult children about three primary topics: First, do they have a budget and what are they doing to save money? “If you’re not saving, you can’t invest,” he says, and you can’t save unless you’re spending less than you make. Second, do they have an investment account? Third, are they taking advantage of their employer-sponsored retirement plan, if they have one?

Show them the power of compounding.

One of the most powerful investing messages you can show anybody in Dabit’s opinion is the power of compounding. Compounding illustrates “the fact that time is the biggest asset you have when you’re younger and investing,” he says. The internet abounds with visual examples of the power of compounding. One of the best for young investors is an illustration showing that if you only contribute to your investments from age 25 to 35, you’ll still have more at age 65 than someone who contributes the same annual amount from 35 all the way to 65. This shows just how powerful the early years of investing are.

Tell them it's OK to start small, but start today.

“Investing can seem daunting if you think of the big totality of it,” Richardson says, “but if you take small steps, like saving $50 a month, then it becomes more manageable.” Coach your millennial to think of investing as building a muscle: You start light then gradually increase your contributions as your confidence and ability grows. The important thing is to start today, with whatever amount you can. “People always want to know when’s the right time to invest and we always say start now,” Richardson says. “It’s not when you invest or where, but how long.”

Give them a financial leg-up.

Sometimes it takes a little more financial boost to start your adult children investing. When ShirleyAnn Robertson, a financial advisor with Prudential in Schaumburg, Illinois, suggested her niece start investing, her niece's first reaction was, “Don’t take my money.” It’s a common sticking point among millennials, Robertson says. “Their money is earmarked to their particular fun so there’s no way they’re going to willingly invest it.” But when Roberston offered to give her niece $1,000 to start investing, the road blocks came down. Consider a little parental “buy-in” to start your millennial investing by funding a joint account with your money but letting your son or daughter make all the investing decisions.

Help them set up their 401(k).

An employer-sponsored plan, if available, can be the perfect place to start both investing and the investing conversation. When her 30-year-old nephew got his open enrollment package, Robertson went through it with him. Then they looked at his paystub together so he could see the power of pre-tax investing: By putting $10 of his $100 into his 401(k), he was now only taxed on $90. Likewise, while $10 went into his 401(k), his paycheck only shrank by $8. And if the company offers a match, that $10 contribution may actually be worth $20. When they see the figures, it starts to become more tangible, Robertson says.

Make it as tangible as the shoes on their feet.

Nothing is more tangible than the shoes on your feet or smartphone in your hand. Robertson suggests using the products your son or daughter uses and enjoys to encourage them to invest. She says you might phrase it to them this way: “You just gave Apple (ticker: AAPL) $900 to buy an iPhone, but how much money did you get in return? Why not own some stock in the company so that when you spend the $900, you get some of that money back to you?”

Help them open a Roth IRA.

If your millennial has earned income, you might help him open a Roth IRA. “A Roth IRA is a great place to start saving because you get tax-free growth,” Dabit says. Roths tend to be better deals than pre-tax IRAs for younger investors who are likely earning less and therefore paying less taxes today. Once your son or daughter starts earning more, a traditional IRA may become beneficial, Dabit says. But really, “they’re both great” because both offer tax and compounding benefits.

Make investing automatic.

Wherever your son or daughter starts investing, find a way to automate it as much as possible. Set up automatic investments from their bank account to that Roth IRA or other investment account. If it’s a 401(k), have them commit to the annual increase program. The easier investing is, the more likely they are to continue for the long term.

Help them build a long-term strategy.

The last step to helping your millennial invest is to show them how to build a long-term investing strategy. This is about “piecing together what their financial future looks like and how to build wealth overtime,” Richardson says. There are a number of online tools you can use to do this; many financial firms provide portfolio builders and retirement planners (which can also be used for shorter-term goals) to put together an investing plan. Your millennial’s 401(k) provider may have one, or you can use the dashboard for whatever financial advisory firm you use.

How to get your millennial to start investing.

Model good financial behavior.Take them to your financial planning meetings or a seminar.Share your own investing journey.Understand the millennial journey.Ask them questions.Show them the power of compounding.Tell them it's OK to start small, but start today.Give them a financial leg-up.Help them set up their 401(k).Make it as tangible as the shoes on their feet.Make investing automatic.Help them build a long-term strategy.1 of 16

Coryanne Hicks, Staff Writer

Coryanne Hicks is an investing reporter for U.S. News & World Report. She is an expert at ...  Read more

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