How to Spend a $1,000 Windfall

We're very fortunate at this moment (knock on wood) to be in a relatively stable financial situation. So if you gave us $1,000 right now as a windfall, we might use it to try to teach our kids about money and charity. They're probably a bit young, but I think they'd absorb a fair amount. My idea is two-fold.

First, I'd start a first lesson about investing. I'd talk to them about how stocks are owning a piece of a company and let them pick a company that they can relate to (Disney, for example) -- and I'd quite frankly steer them toward companies large and stable enough to be likely to be around in 10 or 20 years. I'd buy them each one share in his selected company. (We have some no-fee trades in our account, so the transaction cost would not be a problem.) And we'd watch the stocks here and again, not too often, as the share price went up and down and dividends were issued (which would be reinvested). Hopefully, 10 years from now, they'd see that, after ups and downs, they'd made good gains -- and that that would stick with them.

Second, we'd talk with them about the less fortunate and in this case the hungry -- and how much they need a "windfall." They just had a food drive at their schools, and I have one going on at my office. Let's say $800 is left after the stock purchases. Our local food bank could buy the equivalent of $7,200 of food (retail) with that money -- and feed eight kids lunch for a year. So with that conversation and hopefully their endorsement, we'd send the balance to the Food Bank.

G Blogger of 2:39PM May 08, 2008