Our daughter Tracie is married and off to finish her final year of school. We visited on the phone this week about her new life, and the many financial surprises that seem to come in those first couple of months. When you are a newlywed, that first trip to the grocery store can be an eye opening experience. Who knew you actually had to buy things like mustard, salt, hand soap and baking soda?
We talked about the importance of creating and living by a budget, establishing good financial habits on which to base their life. Tracie had always saved faithfully while single so she was in a relatively good position for a newlywed, and was hoping to stay that way. We spoke specifically about one of her investments that is currently paying her a monthly dividend check of about $70. She asked about maybe selling some of that $10,000 investment to buy some things for their new apartment. This gave me a chance to visit with her about chickens.
As a young teen living in Mississauga, Canada, on a small 10-acre family farm, I decided one day I wanted to raise chickens. So I got one of those cool mail order farm catalogues and picked out 100 chicks of different varieties and sent off my money. In just a couple of weeks a box arrived in the mail, filled with the little baby chicks and I was in business. Six months later the eggs starting arriving and my new business was actually bringing in some cash.
I don’t remember exactly how it came about but at some point my Dad, likely tired of driving me to the feed store, suggested turning my business from eggs to meat. Before long he was showing me how to properly prepare a chicken for the table. The crazy thing about eating the chickens however, was that the eggs stopped coming.
I told Tracie that her $10,000 investment represented the chickens, and those $70 a month dividend checks were the eggs. For a young couple $70 a month may not seem like much when compared with $10,000, but I assured her that over time those checks would add up. They would buy food, clothing, dinners on the town, movies and a host of other wonderful things. The $10,000 she could spend only once, but the income from that investment could potentially come in her whole life.
“Tracie,” I said, “The monthly checks represent the eggs, the investment represents the chickens. Just make sure you don’t eat the chickens.” I have learned there really are just two types of people in life when it comes to money. Those who recognize the value of eggs, and those who prefer to fire up the oven and eat the chickens. The latter have a great feast today, while the former eat well their entire lives.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 375 E Riverside Dr, St. George, UT 84790
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