If you want to teach your grandchildren how get beyond some of the most difficult challenges an investor can face, then do the following: Open up an account for them at either Fidelity or Vanguard. They’ll learn over the years that it’s good to be aligned with leaders in the industry. Next, buy the Vanguard Wellington fund (you can do it through Fidelity too) and have the statements delivered by mail, not online. Every month your grandchilden will get a statement as a reminder that they’re an investor. Help them add to it on an annual basis so they can see the mechanics of dividend payments and compound interest. Then show them the following chart and explain that if they remain disciplined, the same could happen to their money. It’s not a promise. But one of the most important lessons you’ll teach them is how to get off the sidelines, get their head in the game, and avoid that killer that can get the best of all of us—Inertia.
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E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at email@example.com.