Many parents are looking for ways to give their kids a bright future. While money can’t necessarily buy happiness for our children, investing early for generational wealth can pave a comfortable path forward.

Kids have an advantage over adults when it comes to investing. They have a lot more time to achieve their goals. With decades or even a half-century to invest, compound interest can truly become the eighth wonder of the world for our children.

Investing for generational wealth can allow our little ones to eventually:

• Avoid the burden of student debt.
• Buy a home with confidence.
• Afford the luxury of part-time work if they decide to become parents.

Even though there are many benefits of investing for generational wealth, not all parents can or should do it. If we’re strapped with high-interest debt, lack the funds to cover an emergency, or don’t have a plan for our retirement, investing for kids should not be a part of our plan yet. By ensuring our financial future looks bright first, we’ll be better prepared to support our children as they grow.

If we’re feeling confident and secure in our financial situation, investing early can be a smart move. Here are three generational wealth investment options for parents to consider.

529 College Savings Account (Generational Wealth Goal: Career)

The cost of college continues to rise year over year with the annual average sitting at $35,551 per student. This cost has more than doubled over the last 20 years and has grown at an average pace of 7.1% per year.

Without investing, it will be difficult to help our children avoid the financial and emotional stresses of student debt. That’s where the 529 college savings account comes in.

A 529 plan allows parents to invest for their children’s future college needs. These tax-advantaged plans allow parents to invest with after-tax dollars and have their money grow tax-free.

By enrolling in a 529 plan early, contributing consistently and investing for the long term, parents can improve their chances at a student debt-free future for their kids.

Custodial Brokerage Account (Generational Wealth Goal: Homeownership)

According to the St. Louis Fed, owning a home historically outpaces overall inflation over time and therefore becomes an excellent way to build and sustain wealth in our country.

You’ve probably heard about the families that bought their home 30 years ago for $150,000 and now it’s worth $550,000! Can you imagine where it’ll be when our kids want to buy a home in another 30 years?

That’s why it’s important to invest early and often to support the realities of a home down payment.

Depending on your situation, a custodial brokerage account (or UTMA) may be a good place to build up your child’s future home down payment. Money invested into a UTMA can be used for any purpose and is usually taxed at the child’s rate (instead of the parent’s rate), which can be financially advantageous in many cases.

When it comes to college, it is important to note that when the FAFSA (Free Application for Student Aid) is filled out, the UTMA is listed as a student asset. As opposed to a parent asset being weighted at 5.64% of the Expected Family Contribution (the number used to assess eligibility for federal student aid), student assets are weighted at 20%. This means that students will be expected to draw 20% of the UTMA for their college needs.

Custodial Roth IRA (Generational Wealth Goal: Retirement)

If we’re able to invest for our child’s future retirement 50 or 60 years away, this may allow them to relax more during their early years of parenthood and marriage. With no student debt, a home, and little to no need to invest more for retirement, your children can focus on more of what matters most in life.

This can come at a crucial time as well. Many divorces occur around that “7-year itch” timeframe when the weight of work, parenting, and marriage can feel the heaviest. If we can help our children eliminate one huge worry in their lives, that could majorly affect our overall family trees.

A tax-efficient way to invest for your child’s future retirement is through a custodial Roth IRA. This investment account allows you to invest with after-tax money and your money grows tax-free.

A half-century or more of investing and compound interest could help your children build up the 7-figure nest egg they need in the future to retire comfortably.

You can only contribute to a Custodial Roth IRA (like a regular Roth IRA) with earned income. This means your child must earn money from working. The money you (as the parent) earned from working does not count.

This offers an opportunity to speak with your children about the importance of hard work and how they are truly in control of their wealthy future (and not Mom and Dad).

Final Thoughts On Generational Wealth Investing

When it comes to generational wealth, it’s important to invest for a purpose. A student debt-free future, comfortable homeownership and options in retirement are all investing goals many parents can get behind.

By starting early, creating smart investing habits, and teaching our children how to build wealth for themselves, our kids will gain the confidence and skills needed to strengthen their family tree for generations to come.

To get kick-started on your generational wealth investing journey, check out my course Make My Kid a Millionaire.

How are you investing for generational wealth? Which of these three accounts are you considering?

Please let us know in the comments below.

This article was originally distributed on Forbes and written by Andy Hill, a Forbes contributor.