Granny’s investing experiment

A few years ago, I attended a volunteer event where I spoke about the importance of having a financial plan. After my talk, a woman approached me and said she wanted to try out an experiment with her grandkids.

We set up a meeting about two weeks after that talk, and she was clear about how this experiment would go. She said, “Over the next 5 to 10 years, I want to give each of my grandchildren $2,000 every Christmas.” She had four grandchildren in total.

With this gift, she wanted each grandbaby to invest the money in the stock market. She said she wasn’t comfortable educating them about investing and would prefer they work with a professional close to their age. So, that’s where I came in.

Here’s a little background info on Granny. She was in her late seventies and doing well financially. Right before she shared this idea for the grandbabies, she came out and told me that she had more than enough money in retirement and would be good unless she lived past 110 years old. Despite her success financially, her biggest concern was leaving a lasting legacy for the grandbabies.

What this grandmother was doing was disrupting generational poverty. Many people don’t start investing early in life and, therefore, don’t have a great relationship with investments as they age. She didn’t want that for her grandbabies. She figured if she provided them with investing education and funded it along the way, there would be no way her grandbabies wouldn’t have sizeable portfolios in 10-15 years.

So here’s how things went. Granny initially hired me to do four educational sessions, with the first starting in early December before they were to receive the first $2,000. We would then do quarterly check-ins. We would reassess after year one to see if we would continue for another year.

After that first meeting, each grandbaby had to explain to me what investment they would select and why. The next three sessions involved us analyzing and discussing how that investment performed over the previous quarter.

After that first year, this grandmother’s four grandbabies had grown leaps and bounds regarding their understanding of the wild world of investments. While most hesitated to decide on what investment they would select with that first gift, it was easy for them to quickly determine what they would do for the next Christmas gift.

We made such great progress in year one that we would only have two meetings, 6-months apart, for year two. This was going to be the real test. How would the grandbabies fare without meeting with me so often? They did just fine.

All the usual fears people have around investing were removed from this group. All the analysis paralysis people get when deciding on an investment was gone. All the uncertainty and discomfort people feel when investing was no longer present because we had extensive conversations about risk. I did for this group what I do for all my clients. I make investing simple and easy.

In the end, Granny got what she wanted. She solidified her legacy by helping her grandbabies learn how to invest and showed why having ongoing conversations about investing is important. Wealthy people always talk about investing, so she figured, why not them?

The #BuildWealth Movement™ works tirelessly to Disrupt Generational Poverty™ for everyone so their kids, kids, kids can live a life of privilege.

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