The Gift That Keeps On Giving

Alan Campbell
Planner-Adviser

Many of my retired clients include gifts to children, grandchildren and charities as a part of their spending budget. Helping the next generation is an important goal to them. I am often told about their grandchildren and how much they enjoy being with them and helping them.

Recently, two of my clients, Joe & Barbara (names have been changed), told me of their idea to add money to an investment account for their granddaughter Madison each birthday and holiday in place of a toy or other material gift. Their plan is to show her the number of shares and value of the account as she grows up. Of course, I suggested that they invest the funds in a low-cost, well-diversified stock mutual fund but Joe had other plans. Every week he gets to spend a morning with Madison and then take her out to lunch at McDonald’s. As a grandfather, Joe loves spending this quality time with Madison and thought that it would mean more to her when she is older to own shares of McDonald’s than a mutual fund.

I don’t know which investment will perform better over time, but the values that Joe & Barbara hold and would like to pass on to their posterity are to be prudent with their resources and to appreciate experiences and growing opportunities more than material goods. Their hope is that this series of gifts over the years will grow to provide funds to help Madison with college expenses, teach her the principles of investing and compound interest, and remind her of the good times she spent with her grandfather as a child. I really can’t think of a better gift!

I urge you to consider giving to people and charities in a way that will pass on the things you value most. Giving lessons and values will be appreciated and remembered and really are gifts that keep on giving.

See also: Rick answers the question, What is the best way to save for a child or grandchild?