Dear Violet, Mia, Noelle, Charlie, Henry and George,
Everyone needs reminders, including me. So here are some reminders for you:
- We want you to increase in knowledge and wisdom from God. You can show your wisdom by your attitudes about school, work and wealth.
- Be careful and faithful as you go to school. Your work as a student is to learn. Don’t forget grow weary in learning how to use tools like numbers (arithmetic) and words (reading and writing.)
Many companies and banks pay us money. This money is can be in the form of interest or dividends. Some of our money also comes from others who give us gifts. But we always try to remember that everything we have comes from God and God owns everything, even if it looks like we own it. This includes the gifts we receive!
Psalm 24:1-2 (ESV) – “The earth is the Lord’s and the fullness thereof, the world and those who dwell therein, for he has founded it upon the seas and established it upon the rivers.”
One of God’s gifts to us is our parents. My mom and dad were gifts to me. Grandma Cindie’s parents were God’s gift to her. Great Grandma Shirley Winquist left an inheritance (Proverbs 13:22) of some money to each of her children including me. As one of her children, we are giving some of the inheritance to you. It belongs to you now but you cannot spend it now. When you are twenty-one years old you will be able to use (or save and invest) the money in your account. We started each of you with a gift of $2,000 and we may add to that before you reach age 21. In fact, we already did add some more. You can ask about how much you have in your account at any time.
The money is invested for you in something called a “UTMA brokerage” account at Fidelity Investments. Hopefully it will grow to more than $2,000 by the time you are 21 years old. As it grows, we hope you will see the benefit of saving and investing so you will do the same for your children and your grandchildren someday. We also hope you will use the money to love, help and serve others when you are an adult. If you use the money to help buy a home, use the home to love others and serve them. If you use it to buy a car, use the car for more than just fun or going places. Use the car to help others who do not have a way to go to a grocery store without help.
Some definitions of the big words might help…
Brokerage A brokerage account is an account where a company like Fidelity Investments (where your account is) lets you buy and sell investments. They charge a fee or “commission” for many investments you buy or sell. So, for example, if I bought some Target (TGT) stock for you, Fidelity could charge your account for that purchase.
Uniform Transfers To Minors Act (UTMA) – Your account is also called a UTMA because the government made a law to makes it legal to have this type of account. This is what that means:
- It allows parents or grandparents to give a gift like money to children or grandchildren. The $2,000 in your UTMA brokerage account is a gift and I cannot take it back. You own it.
- The gift giver (me) manages your account until you are age 21. This means I can buy and sell investments for you.
- A UTMA also shields you from taxes on the gifts (up to a limit). Most people must pay taxes on their investments, but for now you do not.
Don’t forget to learn how to work with numbers. The things you learn will help you understand your investments and your interest income and dividend income from those investments.
Love, Grandpa Winquist