When You Realize Your baby Boomer Parents are Not as Investing Savvy as Previously Thought
My baby boomer parents are not as investing savvy as I previously thought. I put them on a pedestal when I grew up (as all children seem to do). It wasn’t until a few years after I started investing myself in my early 20’s that I realized maybe the didn’t know as much as I thought they did.
My parents have different investing styles, and my mom has more assets invested into the stock market compared to my dad. My parents are divorced for many years (over 15 years) and had separate finances before they got divorced.
mom’s investing style
Growing up, my mom seemed so knowledgable with investing. She is independent and had her own investments separate from my father’s even when she became a stay at home mom after the age of 37. She keeps track of her investments in a little book (just like I do now! I learned this from her I suppose). She saved up a bit of money for us that we received as gifts as children and put them in laddered GIC’s and would continually buy more GIC’s when they expired.
I realized that my mom’s investing style is mainly speculation and there is no such thing as asset allocation in her investment portfolio. She doesn’t know her rate of return for the year. I didn’t realize that she knew less than I did about investing until I was in my late 20’s. When I started investing in my early 20’s, I would talk to my mom about the potential equities that I was interested in. She has a BMO Investorline brokerage account. I remember when she used to call in to the BMO Investorline number to place a trade for $29.99 (YES can you believe this is pre-Internet discount brokerage era? How times have changed). My mom and I bought a stock together because I didn’t have a brokerage account yet (e.g. I gave her $1250 and she placed the trade in her account). It was Intrepid Potash (IPI). We also bought Visa (NYSE: V) close to the IPO period. My mom still holds Visa to this day and it is one of my investing mistakes since I sold too early.
the rose coloured lenses came off
Years later, I realize that my mom isn’t as investment savvy that I previously thought. My mom hasn’t maximized her Tax Free Savings Account (TFSA). I think most of her TFSA is invested with a financial adviser charging high annual fees (she pays thousands annually, likes the Christmas cards she gets from them every year, and likes to go to the bank and chat them up). She still keeps a lot of her money in laddered GIC’s. My mom says she wants to get out of investing with this financial adviser but she doesn’t really know how. She isn’t interested in DIY investing like I am.
That being said, she’s doing absolutely fine! She has enough money for retirement- which is a relief since it’s one less thing to worry about come sandwich generation time.
dad’s investing style
I always thought my dad was an investing guru. He never talks much about the stock market, he seemed very savvy with his money. He is very savvy with tax minimization strategies. His earnings stretched to raise four children.
On a family gathering about a year ago, I chatted with my dad about his investments. I found out that my dad only has one stock. It is Manulife Financial (MFC.TO). He didn’t have very much in Manulife either (I think it was under $10,000). His main investments are real estate and is heavily invested in that. I suppose he’s not very diversified if he only has one stock and the rest in real estate.
Despite this, my dad is also doing fine and has his retirement ready even though he’s still working, managing his properties. I’m not sure when he will stop working though.
the invincibility cloak is removed
Realizing that I know more than my parents do in terms of investing was a little jarring. The invincibility cloak that my parents had is now removed. Even though they do not have Warren Buffett super-powers in terms of investing, they have done well for themselves.
The important things I learned from my parents is to spend less than you earn and to practice frugality. I did take a few things away from my mom’s investing style, like keeping track of things in a little book (so old school I know!). Hopefully I will be able to impart these money lessons to my child(ren) when he (they) get older. Maybe they will grow up to be more investing savvy than me, and I will be so proud!
Readers, when did you realize that you might know more than your parents in terms of investing? What is their investing style like?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.