Friday focus: Personal finance

For $1 a day, you can turn a newborn into a millionaire.

So says Coeur d’Alene financial consultant and author Brad Dugdale, who has released his second financial education book.

Against a backdrop of economic uncertainty, this is a once-in-a-lifetime opportunity to create financial security for a child, Dugdale said.

“Parents and grandparents need to understand the incredible opportunity that exists because of this disruption in the stock market,” he said in a release. “It’s possible to recession-proof a child from future economic storms with very small investments of money.”

Dugdale’s “Munny Journey, a Keepsake Journal for Baby’s First Money” is modeled after traditional baby journals and records money “firsts,” such as baby’s first dollar, first savings account and first investment.

It’s also an educational tool, providing information on cash accounts, stocks, bonds and how compound interest can create wealth.

With compound interest and the extra time gained by starting at a child’s birth, parents can turn that dollar a day into a million bucks, Dugdale said.

His formula is based on an average annual return of 9 percent, below that of the historical average return of the S&P 500. With stocks trading 30 percent or lower from a year ago, it also provides parents with older children a chance to “catch up” on the million-dollar plan.

The added boost they could get from buying low may help them make up for lost time. “Time is the critical component,” said Dugdale, “waiting just nine years to start this program could halve a child’s investment return by age 65.”

Many people struggle with credit card debt, mortgage payments, student loans and saving enough for retirement because they simply don’t understand how money works, he said.

If people don’t follow simple rules, like maintaining an emergency cash account, the current economy can be financially devastating, he cautioned.

From staff reports