Financially Savvy Grandparenting - PART 3

Welcome to another edition of Mr. Stillman's opus podcast talks about the financial world try to help you understand little bit better. Water swirled back with you this week alongside John Stillman a junket to see again what's happening. We are entering into part two of our series will your part two, or its parts four through six well or you got. Part three is very confusing. Like in the Bible where you have drawn the gospel John but then you have first John later on right you first on FB Artie had John and you have two Corinthians only if you're running for office. Yes, we had part one with Molly right several weeks ago.

If you miss that.

The first edition of financially savvy grandparenting that was a few weeks ago. Last week we had the six tips for financially savvy grandparents was really part two of the series we call the part one I think right yes but we only got through the first three points of the six so now we have the back half. So, part two, sections 4 through 6/part of the guests left. I will is my voice and what time what is number four, seven, or three in our topics are depending on how your breaking down first thing is, don't confuse her grandchildren with really stupid bulleted list and the subpoints know well it to quick review from last week .1 through three so that talk about the Roth IRA. Don't overlook the power of a Roth IRA for young people, especially teenagers. Some tips on helping save for college or helping fund college for your grandkids and then at creative ways to teach your grandchildren about saving and investing that was last week.

I will refer you to the previous podcast. If you missed that part 241. That's right 123 this week. First point number four of six understand that it's a different world today. The one you grew up in, and what I mean by that is in I have a lot of clients who sort of are looking to the lands, all while you know when I was in school I worked 80 was a week and I pay my own way through school and well. I understand that there is value in that, but understand that it's not very realistic in today's world for somebody to truly work their way through school. Yes, you could have a job at some in-state schools. Theoretically, you could work enough in the summer and during school.

The school yourself, but you can work your way through school, but the demands on a college student today are certainly more than they were 40 years ago.

50 years ago and also more than that. The cost of college today are just way out of whack compared what they were when previous generations went through school so if you were in school and college in the 60s or 70s as a ratio of the money that you could actually earn college was much cheaper to things in our society have increased at a rate much faster than inflation. One of them is nursing home cost. Congratulations, you get to be with those later yourself, but also called tuition video that's I can really identify with that. Even back in the mid to thousands. When I was at UNC as an example worked I worked at one time like 4 to 5 jobs at a time in all freelance type jobs. But when I was a workhorse all the way through from freshman year through senior year of college. That and it took that scholarships and a couple of smaller grants to get me all the way through school.

I ended up being able to pay for school almost entirely on my own, especially sophomore through senior years but it took work scholarships and a little bit of grant money to so the point.

There is don't browbeat the grandkids with how you did it in the 60s or whatever year 70s at the same time though understand that there are values from your generation that kids today if you will could really benefit from, and so some of the aspects of work ethic and things like that that you learn and that you had to deal with. It's okay to allow your grandkids to have to work hard, and while it may not be realistic, especially depending on where they choose to go to school. It may not be realistic for them to quote on quote work their way through school.

There's nothing wrong with not bailing them out. Every time they need help with something or they want to take a trip they want to take a semester off and go to Scotland and find themselves well it's okay if you know they want to pay for it.

But let's not handicap them later in life by funding, stuff like that for another good point and you will work with their parents your kids to be sure that they're not handicap. I think it also comes down like what you're studying is using me again, studying journalism and broadcasting not saying that that's not a rigorous course of study. But in a work experience was good for me. I could go out and get journalism or media type jobs to further my study. In addition to getting paid whereas somebody who's maybe trying to become a doctor. Do you want them trying to pay for school. In those early years, or do you want them doing what they're there.

It's will the focus on the study right exactly very good point.

Keep them so that's point number 46 number five would be understand how kids especially children and teenagers might perceive your complaints about the economy and the stock market as a whole so for instance if you're 62 and I watch Fox news all day long and listen to Glenn Beck on the radio and that's always in your mind is is newsy stuff with that they're trying to scare you about everything that's their job keeps you hooked on the media. If you develop that mindset and you're constantly walking around talking about how you know politicians are ruining our system in the markets rigged against you and you know we can have a big market crash. Everything's overvalued. All of those points may be very important to you as somebody who is retired or close to retiring but understand if you're constantly sharing that message are harping on that message with younger generations how that is going to affect you know their view of investing the market.

If you're 18 or 12 or eight these fluctuations in the market have absolutely nothing to do with whether or not you should be investing.

If you can get money in the market at those very early ages are going to do very very well in the long run. And so you also need to have some perspective on the fact that you know of that $630,000 that you have in your 401(k) you know you may have only actually contributed 125 at that over the years and the rest that is growth. That's a pretty powerful tool for growing your money over time and kids learn a lot just by watching and listening to those that are around them so even if you're in a try to be careful in exactly what you say. If you're letting them even read body language or just offhand side comments that can be impactful and so just on saying is if you're having discussions with your friends and your peers about the market that's one thing, because you know that your stage of life, and that discussion is more relevant if were talking to younger generations. We don't want to say anything is going to turn them off from the idea of investing in the market for a couple reasons one that's a very powerful way. As we just established for them to grow their wealth over time, but to we need those younger generations investing in the market. As the baby boomer generation is taking money out because of all these baby boomers retiring taking the money out of the market. You better hope that there are other people putting new money into it to sort all set this up. I tainting the next generation were shooting ourselves in the foot. Basically, the whole Ponzi scheme is going to fall down all around, but it's a very wise point right so to good points here were on to our final tip for savvy grandparents. So this would be gift money with purpose. Don't just give money for the sake of giving money but as often as you can. Anytime you're getting money to your grandkids, your market for something.

So whether it's your college fund or your car fund or whatever it is, try to put a name on it because that's going to encourage them to save it for a longer period of time, instead of just alright well I got 50 bucks from grandma and then it's gone. The next week you know if there's something in mind that you will filing all a lot of grandparents going to go out and shop necessarily for their grandkids for Christmas or birthday or whatever. So here's 50 bucks go by something you like, well that's how you earmarked a fine, but if you're doing something or maybe you're giving a significant sum of money and you know significant relative to that age.

If you're giving hundred dollars to an eight-year-old church that significant market for something so as an example, my grandfather gave us all the grandkids he gave us the hundred dollars every Christmas and hundred dollars every birthday. From the time that we were kids and so I was just why I was naturally a tightwad, but I never spent that money on anything.

It just piled up in the credit union account and my dad set up for me and it was you know I would even think of that hundred dollars every birthday, Christmas is $100 that I had spent just automatically was understood it was going into the credit account that was part of my down payment on the first house while all of my cousins spent that money on you know trips and you know it was spent two weeks after they got it right. And so if there had been some kind of mission statement given that money like this is your car fund or this is your future house fund.

I think some of my cousins would still have some of that money or what if used it for greater purpose than just frittering away on things that 12-year-olds spend money on now so write something in the memo line of the check given an end. Don't be afraid to have the discussions about you know what, let's say this for the long haul for certain down the road and in fact some of the stocks that my grandfather gifted me over the years. I actually used that the capital to start this business and so he allows years and years of things that he gifted me again. He didn't have to give me the mission statement for because I'm sort naturally wired that way that's not the case for most people, so gift with purpose.

Very cool. That's a very nice summation of some really cool things you can do is a grandparent to be a savvy financial grandparent particle gives a quick recap of the six John and will look closer up from last week. Roth IRAs don't underestimate the potential of a Roth for younger people some tips on helping with college savings how to help without actually hurting their chances of getting financially down the road some creative ways to teach your kids about saving and investing. We talked about your grandmother will, Nonie Nonie. We talked about Nonie in the way that she taught you in a creative way how to appreciate stocks and investing this week.

Again, understand it's a different world from the one you grew up in understand how complaining about the market might taint the views of investing for younger folks and then when you're gifting money gift with purpose. Will there you have it. The tips for financially savvy grandparenting. I think the saga is finally over and I think we covered it next week I'm going to talk revive it at some point, but not in the near future will have a 2017 savvy grandparenting item that we can talk about fair face are joining us on Mr. Stillman's opus will talk again on the next podcast