What we're reading — A father's letter to his children at Christmas

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What we're reading — A father's letter to his children at Christmas.

"To my three children,

Starting this year, mom and I will no longer be gifting you money as we have done since 2006. You appear to be doing so well financially, buying what you need when you need it, that the gift does not seem necessary.

We'll be putting the amount we'd have given you into a fund that you will inherit for the benefit of your own children. Our intent is to leave the money to our grandchildren, but to give you some control over it.

We know there will be times our grandchildren may find themselves needing help with education, transportation or housing expenses. Maybe even for a comfortable retirement if they can keep the money invested and let the earnings grow. What they do with the money they inherit (through you) depends on you, their parents, as you teach them about personal finance before they leave the nest.

We taught you mostly by example. Only you can know how effective that was, if at all. There should have been some kitchen-table instruction that we regret never happened. We also regret that the kitchen table, chairs and instruction are always available today, but never taken.

Frugality, like anything else, can be taken to extremes. Mom and I don't think we ever went to those extremes, but we know we sometimes came close. A few years in the 1980s (remember?) we were really broke. We learned from that time. If money is to be wasted — the opposite of frugality — it should be wasted in youth. But it's obvious that if money is wasted, at any time, it's money that won't be there later in life. We think of this whenever we see those unfortunate souls sleeping under a bridge, all their possessions in a shopping cart. It also applies, if not as painfully, to those living at home, but miserable and anxious, struggling with a too-tight budget.

So with our expected life span of another 20 years or so (during which we will continue gifting), and the stock market willing, each of your children should inherit thousands of dollars. We leave it to you to educate your children so that their windfall is a blessing, not a curse.

It would be best if the grandchildren did not know about this account. We'd like to see them develop habits of frugality, never knowing they're going to come into some money. It's not a lot, we know that, but probably enough, if used wisely, to make some difference.

We love our grandchildren and want to give them a boost later in their lives. So unless you have any convincing objections to our plan, this is how it will work from now on.

Much love, Dad."

Fisher Funds view: It can be easy to take money for granted. We thought this letter was a lovely reminder that we all have a responsibility to make good money decisions for ourselves and our family.


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