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Jul 29

Mama’s Little Lesson in Finance

“Every young man should have a hobby. Learning how to handle money is the best one.” –Jack Hurley

My mother was a wise woman. Educated as an elementary school teacher back when multiple classes were held in the same room, she understood how to implant a budding idea into a young person’s mind. This talent was not wasted on me. By the time I was 10 years old, she would engage me in topics of budgeting and other financial issues important to the family at the time. Most likely, she did not expect me to give her any insights, but used the opportunity to nourish in me listening and analytical skills. I can vividly recall her often telling me that while money is not the most important thing in life, it is an essential part of life that requires attention.

National polls show that two of the most important financial issues facing American families today are budgeting and investments. My mother’s introducing me to the family budget was the gateway to the investments field that would ultimately affect my life and livelihood. Not a financial expert by far, she understood the fundamental concept of the family living within its means while squirreling away a few bucks here and there as part of a rainy day investment fund.

I clearly remember one day while riding in the back of the family sedan–I was probably 5 years old–my dad saying something about the stock market. At the time, most people did not know much about stocks, but everyone had heard of successful companies like RCA and General Motors. After the Depression and WWII, most people were highly suspicious of the stock market. I innocently asked him what a stock was, but he could not give me a good answer. Years later after I had been drafted into the Army, one of my buddies casually mentioned that he owned some stocks. His comment aroused a lot of curiosity in me, but I did not ask any questions because I did not know enough to ask even a basic question.

About a month before being discharged from the Army, I was on patrol in Vietnam when my unit came out of the jungle into a clearing. For several months prior to that day, I had given much thought to what I would do with my life upon returning home. I had saved my money and knew that I wanted to go to college, but didn’t know which discipline to pursue. As I stepped into the sunlight after having walked for days under the thick jungle canopy, I noticed a weathered page of the Wall Street Journal blowing across my path that some GI had left from his patrol. The page showed an array of stock quotes. I picked up the page and studied it for a few stolen moments before proceeding on my patrol, but had no idea the meaning of all those numbers. It was at that precise moment that I decided to pursue Finance and Economics in my college studies–a decision that shaped my life forever more. Since then, I have learned how to read stock quotes and continue learning more about this fascinating subject every day in my professional life.

My mother and father are no longer with me, at least physically, but their guidance continues to affect every aspect of my being in profound ways. Every chance I get, I tell young people the WSJ story of how I got into the investments profession. More important than a lesson on choosing a profession, the thrust of my story is to highlight how seemingly small, insignificant events can have enormous implications for life-long directions and career paths. Some people may say that my seeing a copy of the stock-quote page of the WSJ that day over 45 years ago was happenstance as opposed to divine intervention. I have no doubt which one it was.

In my opinion, one of the best gifts we can give our children or grandchildren is the same gift my mother gave to me. Implanting curiosity in the mind of a young person can pay high dividends throughout that child’s life. Introducing a child to the fundamental concept of budgeting that we all basically understand (but may not practice) is an excellent beginning. Although not easy to do since it is natural that each of us wants to give our children more than we had growing up, teaching a child to live within his/her means is an essential life lesson. If the current generation were to better learn this crucial lesson, maybe they could, in turn, teach it to our politicians (imagine that!). Using budgeting as a springboard (a free site is Mint.com), the next logical step would be to introduce the child to the stock market and other financial investments.

I am not suggesting that every child pursue a degree in Finance and Economics. Not at all! But showing a child how to read a stock quote and asking him/her to follow a popular stock like Apple or Google on their smartphone can lead to other questions that can mitigate some of the mystery of the stock market. When riding in the car, I make it a habit of turning off the radio and asking my teenage daughter to stop texting her friends for a few minutes and read me some stock quotes off my iPhone, which she enjoys doing (a great app is Yahoo/finance). I am not doing this for my benefit, but to engage her in a brief conversation about what the quotes represent. You don’t have to be a financial expert to discuss basic points of how the stock market works. My logic is simple: investing requires saving, that requires planning, that requires thinking beyond today. To me, this is a formula that will serve my daughter well throughout her life. You may want to try it yourself, and may even learn something in the process. I feel sure that your mother would be proud.

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