On Wednesday my daughter received a $100 bill from my folks as a gift for her second birthday. The note read, in part: "Have your mom or dad put this your bank account so it can grow just like you." Two observations are striking:
I'm devastated. Mila does not even have a bank account. Seriously, what kind of father am I? And no one has given her money until now! Saving was taught to me as a child. Grandparents and uncles who remembered the Great Depression understood this importance and gave me birthday dollars as a lad, and they added up over time. Our experiences shape our attitudes.
We giggled over the 'so it can grow' statement. Interest rates are zero! A ten year zero coupon Treasury will her less Happy Meals when she turns twelve than today. The financial repression is cute until the realization occurs savers are being robbed.
I remember going to the bank to set up my first CD. The interest rate of 9.5% for one year meant my $1000 grew to $1095 in short order. "I can get used to this!" My disappointment was substantial over the 8.8% offered the next year.
So we have a date. This morning father and daughter are going to the coin store for three one ounce silver coins. Grandma said to grow.