In a current Fortune article, which in flip referenced an older ThinkAdvisor interview, Mary Buffett shared an anecdote about how her former father-in-law Warren Buffett modified the best way he gifted his household $10,000 yearly, from money to shares of inventory:
He would all the time give every of us $10,000 in hundred-dollar payments. As quickly as we bought dwelling, we’d spend it — whooo! Then, one Christmas there was an envelope with a letter from him. As a substitute of money, he’d given us $10,000 price of shares in an organization he’d lately purchased, a belief Coca-Cola had. He mentioned to both money them in or hold them. I believed, “Nicely, [this stock] is price greater than $10,000. So I saved it, and it saved going up. Then, yearly when he’d give us inventory — Wells Fargo being considered one of them — I might simply purchase extra of it as a result of I knew it was going to go up.
Giving shares of inventory as a substitute of money was small nudge that made a distinction. A little bit little bit of added friction. A little bit trace from the giver that you simply may need to hold it, however you aren’t pressured to maintain it.
I haven’t given my youngsters any inventory but, however am beginning to assume they’re prepared. It received’t be lots, however I’ll inform them about it they usually can take a look at the custodial account statements annually. I’ll present them what paper inventory certificates seem like. I’m hoping that they’ll additionally see the expansion from the funding, after which that’ll make them even much less more likely to promote the shares. However they’ll technically be free to promote them as soon as they flip 18 (or as much as 25 in some states).
