Why this 7-year-old YouTube multimillionaire needs to learn some key money lessons

What does the future hold for a 7-year-old who’s earning $22 million unboxing toys?

“[Short], simple videos have made Ryan one of the most popular influencers online, with 17.3 million followers and a total of nearly 26 billion views since he (and his parents) launched his main channel, Ryan ToysReview, in March 2015. For Ryan, this means not only an endless stream of toys to play with but also a seemingly endless stream of money: He was this year’s highest-paid YouTube star, earning $22 million in the 12 months leading up to June 1, 2018, Forbes estimates.”

How this 7-year-old made $22 million playing with toys, Forbes, 12/3/18

Should I give my kids an allowance? How are we going to pay for college? What’s the best way to instill a good work ethic—and savings ethic—in my children? These are the questions I hear all the time from parents. My advice boils down to some simple tenets. Talk openly and honestly about finances with your kids (in an age-appropriate fashion). And while hard work and planning for the future are important, money isn’t everything.

But for families like Ryan’s, the script gets flipped. Or perhaps shredded and fed into YouTube’s ranking algorithm. This 7-year-old is out-earning most CEOs—and he’s doing so by using his wildly popular unboxing videos to (essentially) advertise toys to his millions of kiddie followers (and no doubt add to the grief of their millions of parents).

What kind of money advice could I give to the parents of this mini-mogul? Well, here’s a start. And if it sounds familiar, that’s because it’s pretty much the same advice I’d give to any parent. I just tweaked it a bit for anyone dealing with a sudden influx of YouTube riches.

Keep education a priority

One major upside of Ryan’s early success is that he’s created his own college fund. As Forbes noted, because he’s a minor, 15% of Ryan’s earnings must be deposited into a trust that he’ll access when he comes of age (typically 18). And based on his yearly earnings, that’s over $3 million dollars in just 12 months. With that kind of money, he could easily pay for four years at any elite private school out of his own pocket (assuming he gets in). His parents could also take advantage of the tax-free growth (and potential state tax breaks) offered by 529 college savings accounts. (Though it varies by state, you can generally contribute a maximum of $300,000 to $500,000 to 529 plans benefiting a single child.)

Beyond that, though, I hope that school remains a big part of Ryan’s off-camera life. As of 2016, Ryan’s mom, herself a former teacher, said that their filming times did not interfere with his preschool schedule. And yes, if managed responsibly, Ryan’s assets are already the foundation of a financially solvent adulthood. But if he’s going to become a responsible adult, he and his parents need to look beyond YouTube metrics to real-life goals such as getting to and graduating from college, which is going to be key to financial success later in life. This isn’t just something you can unbox; it takes a lot of hard work and patience to achieve. Speaking of which…

Dial back the instant gratification

As a personal finance writer, I find that this aspect of Ryan’s story makes my brain hurt a little. Ryan’s empire is built on peddling an alluring fantasy to kids: Getting a new toy every day. Or getting 100 new toys. I can’t help but think this is kryptonite to this kid’s sense of delayed gratification, the key executive-function skill that helps us learn to wait—and ultimately to save money.

This could really hurt Ryan when he comes into the $3 million (and counting) set aside in his trust. Research has proven that kids with poor self-control are more likely to develop credit problems as adults. That’s why I always tell parents to never give in to those last-minute checkout line tantrums at the supermarket. (“I want candy!”)

Let’s hope Ryan’s parents assign him some kind of household chore that’s not compensated, either by YouTube ad revenue or by the latest Hot Wheels merchandise. It’s important for kids to learn to do work for its own sake, and to contribute to the family. Being motivated internally is key. So go ahead, turn off the camera and make the kid load the dishwasher.

Encourage giving back

According to the family’s YouTube “About” page, most of the toys featured on Ryan’s channel are donated to charity. And that’s good. Sometimes it can be hard for young kids to grasp why we donate items to people in need, especially if these items “belong” to them. (Just ask the mom who told me her daughter was afraid she couldn’t have peanut butter anymore because the family was donating a jar to the local food pantry.)

While Ryan’s a master of the in-kind gift (and the holiday toy drive), it’s important to involve kids in conversations about the money you give to charity, and why that’s a priority for your family. You can start young with this, too: Studies have found that even toddlers can experience the joys of altruism.

As he gets older (and, perhaps, ages into a Teen Boss), Ryan should be given the time to reflect on his precocious financial success, and figure out how he can use it to build the kind of life he wants—instead of just having a career dictated by an algorithm. Hopefully that will include sending some of those hard-earned ad dollars to causes that are important to him

charity college delayed gratification giving kids and money Parents ryan toysreview savings social media toys unboxing Youtube

Join the conversation