Dear Eric: We have two nephews, 17 and 21, and felt it was time to teach them money management skills and saving for retirement.
At Thanksgiving, we funded two accounts for each – a $7,000 Roth IRA and a $3,000 brokerage account. We also gave them two books on long-term investing.
Given the 40-plus years until they retire, the funds, if added to, could easily grow to more than a million dollars and be tax-free.
For Christmas we gave each a new laptop. After much effort, I was able to finally walk them through how to use some of the tools in their brokerage account for research and how to purchase a stock. In addition, I was able to show the younger one a separate stock-charting program.
Until recently, I sent one to three weekly articles on financial news that would be of interest. I gave them a list of 50 well-rated ETFs (exchange-traded funds) and told them to select 10 to 14 for their Roth. I put together in my account a $7,000 portfolio of 13 ETFs and shared the weekly gains I was getting and encouraged them to beat me.
Their response has been almost zero. And they have indicated they don’t do email and only read very short texts.
This was a test, and we hoped to contribute to their Roth this year and perhaps put them in our wills, but I’m thinking we’ve made a bad investment and the timing is wrong. Any ideas, or write them off?
– Invested Time
Dear Time: This is quite a generous gift — your nephews are lucky to have you — but it’s important to right-size your expectations.
It’s only been a couple of months. While you have the benefit of years of experience, conceptualizing compound growth over 40 years when one is 17 or 21 is sometimes hard. So, I’d caution against cutting them out of the will just yet.
What you’re offering is foresight. (Well, foresight and quite a bit of money.)
It’s not your job to teach your nephews the value of wise financial planning, but this is the task you’ve set out for yourself. If you want to continue, good pedagogy suggests you start with assessing where the students are.
Also, clarify your objectives. Are you testing them to determine a skill level or to make sure they have the same interests as you?
Ask them what they are hoping to accomplish. If, for instance, they’re saving for a purchase or for school, a CD or bond might be an accessible entry point that teaches a graspable lesson. This will have a more modest rate of return, obviously, but it may grow their interest (excuse the pun) and help to reinforce what you’re trying to teach. Like any worthwhile fund, teaching financial literacy can be a longer-term investment but it pays off.
Dear Eric: We met a nice couple who was seated at the table with us on a cruise last summer. We had a few things in common and pleasant conversations.
They shared a travel schedule, with plans to be on the go all the time.
My husband and I have traveled very extensively and now travel sparingly due to my husband’s often poor health.
This couple gives us a text travelogue and photos of resorts, Hawaiian beaches, exotic places, etc., whenever they go. We are simply not interested and last week’s text gave me pause, wondering how to respond.
They sent pictures of a resort and lovely weather and travel schedule. All this came while my husband was very ill in the hospital, and I was emotionally and physically worn out.
I just gave him a thumbs up emoji. I did not feel I should have to say, “My husband is critically ill, and you are sending me pictures of your vacation and I couldn’t care less.”
Should I tell them our traveling days are over, we have been to many lovely places they go to, and we’d like to not receive vacation travelogue texts?
Please tell us what to do. We will never see these people again and consider them a chance acquaintance, not friends.
– No Need for Vacation Pictures
Dear Pictures: I’m sorry for what you and your husband are going through. That’s so challenging without the added ache of seeing someone else – acquaintances, no less – gallivanting across the globe.
You’re right that you don’t need to tell them about what’s going on, health-wise, if you don’t want to.
But because they may have misread your initial interaction and continue to assume that you enjoy their travelogues, it will be helpful to redirect them. Something simple like “we’re in a different place in life now and we’re not a good audience for vacation pictures anymore. We wish you the best and thank you for understanding” should suffice.
Send questions to R. Eric Thomas at eric@askingeric.com or P.O. Box 22474, Philadelphia, PA 19110. Follow him on Instagram @oureric and sign up for his weekly newsletter at rericthomas.com.