Friday, October 30, 1998

The Apple of My Eye
by Jeff (AKJayhawk) Campbell ([email protected])

One of the benefits of living here in Alaska is the Permanent Fund Dividend. It was set up about 20 years ago with money from the beginning of the oil boom. Basically, the state invested the lump sum back then, and now the dividends are divided equally among every person in Alaska. With the great stock market of the past few years, the annual check has risen to record levels. This year, every citizen who meets the requirements gets a check for $1540. Sure beats a state income tax!

This weekend, my 11-year-old daughter asked me when we'll be eligible receive the dividend (we just moved to Alaska this summer). I told her we will start getting our dividend in 2000, based on eligibility requirements. She then asked me, "What will you do with my dividend?"

My wife and I hadn't really considered that question beforehand, since it's a fair bit down the road. I told my daughter we hadn't discussed it, but we would probably give her a small portion of it to spend, and would invest the rest. I said we'd probably try to buy some stocks with it to help pay for college. Her next question, "What's a stock?"

I then spent a few minutes explaining the basics of a stock, and the principles involved, all in 11-year-old terms of course. She thought about it for a few minutes, and said (I'm not making this up): "So I could use my dividend to buy stock in companies like The Gap and Disney?"

I'm sure my daughter wondered why I smiled the rest of the afternoon.

That does bring up a good point: how much time have you spent teaching your kids about money and investing? I recently read "The Millionaire Next Door," and one of the characteristics of the millionaires the authors studied was they taught their children the value of money, education, and investing. You've worked so hard to apply the principles of Fooldom and become the exception rather than the rule. But, have you prepared your successors well enough to do the same?

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