Tracy Cabiroy, owner of Work For Dad.
By T. J. Prieur
At age 14, Tracy Cabiroy began working for her father. The money she made doing a few odds and ends was invested into a Roth IRA and it compounded interest.
Now, at age 26, Cabiroy not only has saved the retirement funds of that of an average 50-year-old, but she is applying this practice to her own business, called Work For Dad.
“Before Work For Dad, there was in no way, shape, or form any way for teenagers to start planing for their retirement,” Cabiroy explains. “There were money markets and mutual funds, but no real opportunity to take advantage of any tax opportunity.”
The concept is simple. Parents draw up a service contract with Cabiroy, outlining light housework and yardwork that may need to be accomplished. Cabiroy then employees the child, and it is her job to ensure her clients (Mom and Dad) stay happy.
The parents select the pay rate, and when the child earns a paycheck, it is direct deposited into a bank account, then, with the help of a financial advisor, moved into a Roth IRA.
According to Cabiroy, 14 is the “magic number,” meaning it is the earliest a child can work with a work permit. The child is also responsible for filing his or her W2 and paying taxes, making this process an educational one.
“We are taking advantage of the lowest tax bracket they will ever be in, and we allow that money to grow tax free, without impacting the ability to borrow for college later,” Cabiroy says.
By assigning each teenage employee a well-matched, bonifide financial advisor, many financial lessons are learned along the way, as well as the assurance the funds will be managed properly.
“Social Security is a touchy subject these days,” Cabiroy says. “I’m convinced it won’t be around for me, and certainly not for the kids. This is a way to protect their future, and guarantee some sort of security without impacting their life up to that point.”
Having only been incorporated since November 2010, Cabiroy looks forward to a productive 2011, and spends her time getting the word out by visiting schools and networking events.
“In five years, I want to have as many employees as Busch Gardens (2,000 employees. My less-than-20-year goal is to have as many as Wal-Mart,” she says. “When I’m reported on by NBC Nightly News, that’s when I’ll know I have made it.”
