Stock market pullbacks feel awful in real time, especially for households that lean on investment growth. Yet for parents, downturns can be surprisingly useful.

A lower price today can mean more shares for a child’s future. With a steady plan and a long time horizon, volatility becomes a tool instead of a threat.

Why Dips Work

A downturn is basically a temporary sale on productive assets. Buying during declines can lift long-term results because the same contribution purchases more ownership. The trick is consistency, not heroics. Small, repeated buys during weak stretches often beat one dramatic bet, because nobody reliably knows when the bottom arrives.

Dual Payoff

Investing for children can also steady a parent’s mindset. When personal accounts are down, making a contribution to a child’s portfolio creates a sense of control. It turns market stress into action. That emotional benefit matters, because calmer investors are more likely to stay disciplined and avoid rash decisions during choppy months.

Account Choices

Two common vehicles work well for long time horizons: custodial brokerage accounts and Roth IRAs. Custodial accounts can be funded with gifts and invested broadly. Roth IRAs require earned income, but they offer tax advantages for long-term growth. College savings plans can complement these, yet investing rules should remain simple.

Define The Goal

“Make the kids millionaires” sounds dramatic, but the core idea is building options. A large portfolio later can reduce pressure around career choices and early-life setbacks. The milestone that matters most isn’t a million first—it’s reaching a level where compounding starts to carry real weight and motivation stays strong.

The 250K Jump

A practical checkpoint is $250,000. At that point, even modest market returns can create meaningful annual growth. For example, a 10% year would add $25,000—often more than a typical yearly contribution. That is when the portfolio begins doing heavy lifting, making progress feel less dependent on new deposits.

Buying Framework

A simple system beats perfect timing. Set a recurring contribution schedule, then add “dip bonuses” when the market drops meaningfully, such as 10% or more. This blends routine investing with opportunistic buying. The goal is to avoid freezing up, while also resisting the urge to spend every spare dollar too early.

Risk By Age

For children with a decade or more before taking control, a stock-heavy mix can be reasonable because time is their biggest advantage. Still, risk should be reviewed as balances grow. A 20% decline on a $100,000 account is a $20,000 paper loss, which feels very different than the same decline on $10,000.

When To De-Risk

One approach is gradually adding bonds or cash-like funds once the account crosses key thresholds, such as $100,000 and beyond. That doesn’t require abandoning stocks. It simply reduces the chance that a sharp drop derails plans right before the child turns 18. The best mix is the one a family can stick with.

Backstop Test

Another useful gauge compares a child’s account size to the parent’s stock exposure. If the parent’s stock portfolio is at least 20 times larger, keeping the child’s account aggressive may feel manageable. If the parent’s stock portfolio is closer to 10 times larger, it can be a signal to reduce risk or slow additions.

Contribution Math

Annual contributions matter more than perfect market calls. Using the annual gift allowance of $19,000 and assuming 6% compounded growth, a custodial account can reach meaningful size surprisingly fast. Under that pace, a portfolio can clear $250,000 around the mid-teen years, then keep compounding with less effort.

Realistic Timeline

Becoming a millionaire by 18 through a single custodial account is tough without very large contributions or unusually strong returns. But that’s not failure. Even a few hundred thousand at 18 is a powerful launchpad. Left untouched at 6% growth, a portfolio can keep compounding toward seven figures by the mid-30s.

Teach The Handoff

When the child reaches 18, the conversation matters as much as the balance. Explain volatility, diversification, and why sudden spending can damage decades of growth. Consider guardrails: a written plan, a budget, or matching contributions if the child keeps investing. The goal is building capability, not just gifting money.

Conclusion

Market downturns are uncomfortable, but they can be turned into a steady wealth-building engine for children through consistent contributions, a clear risk plan, and patient compounding. The added benefit is psychological: action reduces helplessness when markets wobble. What “dip rule” would be easiest to follow the next time prices slide?