The Greatest Investment I Ever Made
By Dennis Miller
Now that we’re past Thanksgiving and sprinting toward the new year, I want to share one of my family traditions. It also happens to be the greatest investment I ever made.
Like many grandparents, you may fret over what to get your grandchildren for Christmas. In our family, the grandkids have come to expect something a bit different from Grandma Jo and Grandpa Dennis.
When I was a young parent, I quickly realized that kids don’t come with an instruction manual; it’s all on-the-job training. When my children were small, my now former wife and I – along with their grandparents – always gave them a lot of toys. By the first of every year, they had destroyed most of them. They were simply being kids; it certainly doesn’t mean they were bad children.
It didn’t take long to learn we were better off buying a few expensive, high-quality toys rather than a whole lot of cheap plastic stuff.
My first high-end purchase was a $30 metal Tonka Truck. At the time, I was making $200 per week, so a $30 toy was quite an expense. Nevertheless, it was virtually indestructible, and it lasted for several years, up until I mentioned to my then ten-year-old son that it was “indestructible.”
It took him about three months to proudly show me that it could, in fact, be destroyed. He was of an age where trucks were being replaced by bats, balls, and other things, so he took on the “indestructible” truck as a personal challenge.
The decades flew by, and soon I was a young grandparent. Once again, no instruction manual, only on-the-job training. When our first grandchild was old enough to understand Christmas, the entire family, including both sets of grandparents, came together to celebrate. As she unwrapped her gifts, all of the grandparents – myself included – instinctively wanted her to play with the gifts they’d given. We each wanted her to like our gifts the best.
We showered her with gifts every Christmas and birthday. And much like my children, within two weeks she’d move on from each new toy. They’d get relegated to the toy box when her mom cleaned up the living room, quickly becoming “old” toys.
At that point, I brought up the subject with some of my friends who were also new to the grandparenting game. “Yes, now that you mention it, we are uncomfortable. It feels like we’re competing with the other set of grandparents,” they all said. It seemed like a no-win game for both sets of grandparents and, more important, our grandchildren.
Shortly thereafter, I called my daughter and told her I was adopting a new philosophy. We would start giving “needed” gifts, not necessarily “wanted” gifts. Let the other grandparents buy the toys and games. We would help out with school clothes and other necessary items, and give only one small toy.
For years that one small toy was a plastic flashlight from Radio Shack in the shape of a lion or a hippopotamus, and the kids loved them. As time went on, the small toy turned into a DVD, which would go on rotation until the grandkids had memorized the entire movie.
Santa Helps Send the Grandkids to College
Soon we decided that we also wanted to give them gifts they would remember for the rest of their lives.
For each grandchild’s birthday and Christmas, I would buy one zero-coupon bond that would mature when they were 18 or 19 years old. Although I don’t recommend them today – better to give silver coins because of inflation concerns – the sentiment has stood the test of time.
The grandchildren would open their gifts, see their clothes, set them down, and move on to the toys. After all of their packages were open, their parents would instruct our grandchildren to also thank Grandma and Grandpa for the contribution to their college fund.
Based on my personal experience, when it comes to college all parties should be stakeholders. Once I started paying for college on my own, my grades jumped considerably. Grandparents (if they choose to), mom and dad, and the child should all be economically invested in the process.
When my stepdaughter Holly was in college, she mentioned that several of her friends would drop a class to avoid a bad grade or take fewer classes to avoid the stress of having to do a whole lot of studying. This approach, of course, can keep students in school for five or six years to earn a degree that could be completed in four. Sometimes that’s unavoidable, but spending a couple of extra years on campus certainly gets expensive. I asked Holly if she noticed whether a large percentage of her friends who hung around partying on campus were political science majors, in training for government work and learning how to waste other people’s money.
Our two oldest grandchildren are now in their late 20s, both with college degrees and good values. When they graduated from high school with $25,000 or so in bonds to help pay for college, they finally understood.
What really amazed me was the process. My grandchildren still received an ample supply of gifts and toys that they enjoyed for a short time, along with their flashlights. But my wife and I refused to feel any competition from the other grandparents.
As our grandchildren opened their other gifts we would comment on how cool they were. Their parents knew what we were doing. We simply refused to get caught up in the game of who could outdo the others with the coolest toys.
When the Internet came along, our children started sending us photos of our grandchildren wearing outfits we’d given them for school. Posing for the photo and remembering where the gift came from was a good lesson for them and a nice treat for us.
After the first two grandkids grew into their late teens, I no longer kept our plans a secret. Now we tell all of our grandchildren what we are doing and why.
Keep in mind that gifts are not what matters to them anyway. Standing elbow to elbow with Grandma making chocolate-chip cookies or fixing a bike in the garage with Grandpa are the things they remember. Grandchildren don’t ration their love for grandparents; it is unconditional. And it certainly has nothing to do with birthday presents or toys under the Christmas tree.
When you see your grandchild walking down the aisle in a cap and gown, you’ll know that the return on your investment will keep on giving for generations.
Silver & Gold Are the True Colors of Christmas
One final note: zero-coupon bonds are a terrible investment during high inflation. Now we give their parents silver Eagles that they store in a lockbox. A well-meaning friend cautioned me not to tell our grandchildren that they have gold or silver in the house. Kids are inclined to brag to their friends, which could make your home a robbery target. Instead, I recommend saying that Grandma and Grandpa made a contribution to their college fund and leave it at that.
Whether it’s for college, trade school, or just a little jumpstart on adult life, the small sacrifices pay off. It must have been appreciated because my daughter phoned me at Thanksgiving. Our great-grandson was about to celebrate his first birthday, and she wants to follow the same tradition with her grandchildren. Her daughter (my granddaughter) is most appreciative. She told her mother not to worry – her grandson has more than enough toys to play with.
The best part about one-ounce silver coins is that they are currently under $40 each. You can gift any amount of coins you can comfortably afford. I suspect that over the next 10-18 years they will certainly hold their value and more. Long after the toys are forgotten, the money waiting for them when they graduate from high school will make a difference.
Today is my great-grandson Wyatt’s first birthday. We all know what one of his gifts will be.
On the Lighter Side
One of the biggest treats about working with Casey Research has been the opportunity to interact with Doug Casey. He is straightforward, pulls no punches, and has the uncanny ability to force a guy like me to stop and think. Doug has made me take a step back to reexamine my core beliefs about our country, politics, and investing.
His new book, Totally Incorrect, is a terrific collection of some of his controversial and unique conversations. Pressed with a deadline, I skimmed through an advance copy, and I can already tell I love it. A of couple folks in my family don’t know it yet, but the book will be wrapped up under the tree for them.
Many years ago my wife Jo decided to try to take advantage of a Black Friday sale. She was up at 3 a.m. and off to the store. When she returned home she announced, “Never again!” She was particularly frustrated when she saw the item she bought on sale at the store the following week for the same price.
In our home, Black Friday now means setting up the tree and decorating the house for Christmas. With each passing year, our collection of special ornaments and decorations bringing back old memories seems to grow. It is the one day of the year that I am thankful for good ladders.
I don’t want to say we go overboard, but when Grandma Jo gets finished, it’s not unusual for the neighbors to bring over their grandchildren to have a look.
Congratulations to Northwestern University on winning their ninth game of the year on Saturday. It looks like they may actually play on New Year’s Day in a bowl game in Florida. They have not won a bowl game since 1948, and nine wins will likely earn them a pretty tough opponent.
And finally… a few more cute stories about the little ones:
KETCHUP: A woman was trying hard to get the ketchup out of its container. During her struggle the phone rang, so she asked her four-year-old daughter to answer the phone. “Grandma, Mommy can’t come to the phone to talk to you right now; she’s hitting the bottle.”
DRESS-UP: A little girl was watching her parents dress for a party. When she saw her dad donning his tuxedo, she warned, “Daddy, you shouldn’t wear that suit.”
“And why not, darling?”
“Daddy, you know that it always gives you a headache the next morning.”
Until next week…
Retiree advocate Dennis Miller saved his own retirement by working with investment experts to develop a strategy that significantly outperforms today’s puny interest rates. Every week he shares his experiences in retirement and offers timely investment insights in his free e-letter, Miller’s Money Weekly. To learn more, click here