Wednesday, May 6, 1998

Foolish Graduation Gift
by [email protected] ([email protected])

My goddaughter, Anne, is graduating college this year. I’d like to give a gift that will help Anne on her way in life but will also be cherished. I’d like to give her something practical and long-lived: a nice piece of furniture, a set of dishes, a stereo. Unfortunately, I’m lousy at picking out gifts. Well, there’s always money -- just what every grad needs to establish a household, buy a car, build a wardrobe, but not exactly something to be remembered.

Wait a minute. I’m a Fool-in-training. Why not give Anne something really important that will last her whole life? Financial security! Unfortunately, the old investment account doesn’t seem to have a spare mil or two sitting around. (Actually, that’s OK. The Millionaire Next Door says it is a spectacularly bad idea to give young adults lots of money. Undermines self-confidence and kills initiative.)

Why not the next best thing? A copy of You Have More Than You Think. It’s a great book. The Motley Fool approach to investing is working well for me and it’s only $23.85, including tax. Well within my price range. Not only does Anne get some of the best financial advice in the world but Tom and Dave get to split a two-buck royalty. Seems only fair that they get some benefit out of all the good work they’re doing.

Nah. This isn’t going to work. Grads have families to start, careers to build and this generation doesn’t read. The darn thing is going to end up as a door stop. Can’t find the video or Motley Fools vs. The Stock Brokers 64 at Blockbuster. When are you guys going to join the 90s? Think video, think infomercial, think marketing tie-ins (compound growth charts on the cups at McDonalds -- what a concept).

All kidding aside, I’ve decided to help Anne get started investing through DRiP accounts. By providing a little information, some seed money and a cure for the dreaded "account opening" problem; I can help Anne get started on the path to financial security through saving and investing at a time when compounding will help the most. My total investment is some time and a little money. The return is incalculable because it goes far beyond the money involved.

By the way, I’m going to give Anne a copy of the book, too. She’s smart; she’ll probably read it. So, Tom and Dave will get a royalty after all. Best of all, it will start compounding in 25 years or so when Anne repeats this for the next generation. In 400 or 500 years, the royalties will really roll in.

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