Just before Harry’s first birthday, he was Christened at his parents’ local church.
After the Christening, Harry’s parents went home. They opened the presents they received from all their friends and family. The presents were mostly toys, books and a few treasures to remind them of the day. However, it was when they were doing thank you notes that they noticed there was no gift from one of the godfathers.
Whilst it is not essential for the godfather to give a gift, he had been generous with other gifts in the past. Plus, whilst he wasn’t rich, money was not a worry for him. The parents thought nothing of it. They did later see a card from the godfather in which it said ‘The gift will come later’. The parents thought it would be in the mail. Weeks went by and nothing arrived. They thought no more of it.
When Harry’s 1st birthday came, the same thing happened again. They got presents from friends and family but only a card which said ‘The gift will come later’ from the godfather. Again, nothing arrived.
When it came to Christmas the same happened again. This time the parents thought that he must have the wrong delivery address so they decided to make contact and let him know.
They said “In the cards you said the present would come later but it never seems to arrive. Are you sure you ordered it correctly?”. The godfather said, “There is no mistake. The gift will come later.”
On Harry’s 7th birthday. A gift did arrive. It was a copy of the book ‘Grandpa's Fortune Fables’. Inside the book it said “Read this book. This is not your main gift. The gift will come later”.
Every birthday and Christmas was the same. Just a card with the same message. “The gift will come later”.
On Harry’s 18th birthday he got extra special presents from all his friends and family to celebrate the milestone birthday. As expected by now, there was only a card, no present, from the godfather
However, this card was different. Inside it had a note:
Happy 18th Birthday.
After all these years you have probably gotten over the disappointment of me not giving you presents on special occasions.
I believe you have been given plenty of toys to play with, books to read or vouchers to spend over the last 18 years from all your friends and family members that care about you so much.
As I said in my cards, “The gift will come later”. I meant it. For 18 years, I have been regularly putting the money I would have spent on gifts for you into an investment account. Now I want to hand it over to you.
Before I tell you how much and let you take control of it, I want you to promise me this:
You will look after this money in the same manner I have done for the last 18 years.
You will use a proportion of this money to help someone else.
If you promise me these two things, tomorrow I will transfer £4,500.
This is the amount I have accumulated by saving £10 every month since before your 1st birthday. I did this instead of buying you a present every birthday and Christmas, for the last 18 years. The money has been invested in the stock market. By investing over this period, I paid in a total of £2,160 but your gift is worth so much more as it started generating more money itself over this time.
Sorry that you didn’t get presents from me all those years, but I hope you can see that by delaying when I gave you the gift I was able to provide you something that will make a real difference to your financial future. I hope you keep some of it invested and watch it continue to grow!
I hope it was worth the wait.
The Alternative Christmas present
Buying kids toys, books, games and clothes is nice in the here and now but doing something that teaches a child the power of delayed gratification and compound interest can change their financial future for the better.
Whilst this story was about a godfather, this can be applied to parents, grandparents, aunts/uncles or close friends. I appreciate we all want to spoil kids with lots of gifts on special occasions but just before you buy those last few gifts, just think of how much benefit they will get from those gifts relative to saving (investing) that money instead.
Other advantages of gifting them a savings account:
You don’t have to go shopping for as many toys and books
You don’t have to worry about being compared to other people as you know you are doing something life changing which others can’t see.
By investing the money in a socially responsible manner, you would be supporting companies which make a positive impact on the world your kids live in. Learn more here.
Best not to keep the gift a secret
Unlike in the story above, where the Godfather didn’t tell them what he was doing until the end, I strongly recommend that you tell the child exactly what you are doing so they can witness the power of delayed gratification and compound interest throughout their childhood.
Also, if you are thinking of doing this for someone else’s child (grandchildren, friend, niece/nephew), it’s best if you encourage the parents to set up an account for their kids and transfer the money into that account, rather than having the money in your own account. Just in cases something happens to you before they turn 18 (hopefully not but best to be safe).
If you would like some help learning about how to set up an investment account, then please check out our 3 step guide to setting up an investment account.
Remember to make sure you take the time to teach the child, who you are saving for, about money. This will materially increase the chances that they won’t just waste the money when they turn 18. Clearly the best way to do this is to…. book plug coming up …. get them to read 'Grandpa's Fortune Fables ', available now!
Thanks for reading.
Resources mentioned in this blog: