My grandfather assisted me in setting up an investment account as a gift for my 21st birthday. Rather than simply handing me cash, he provided me with valuable financial knowledge.

A Life-Changing Birthday Gift

• On my 21st birthday, my grandfather presented me with a generous sum of 21,000 South African rand, which was roughly equivalent to $1,500 USD at the time.

• There was one important stipulation: I needed to consult a financial advisor and invest the money.

• I am deeply appreciative—not just for the financial gift, but for the valuable lesson it imparted.

A month before I turned 21, my grandfather informed me of his plan to give me 21,000 rand (about $1,500 USD, based on the exchange rate then). The catch was that I had to accompany him to a financial advisor and use the funds to invest in stocks.

At that stage in my life, I cherished the independence that money provided, but I hadn’t given much thought to investing. Throughout university, I worked a part-time bartending job, picked up promotional gigs when I could, and had just begun landing freelance writing assignments.

Most of my earnings were spent on supporting my student lifestyle—often on nights out or late-night pizza runs—or saved for special occasions, like a cross-country road trip with my roommate. Even so, I was excited about the birthday gift, knowing its true value would become clearer with time.

Understanding the Importance of Investing

Six months after my 21st birthday, in early 2019, my grandfather arranged for me to meet with a financial advisor he had selected. We sat together in a boardroom as the advisor discussed stocks and the market, using terms like "repo rate," "Capital Gains Tax," and "volatility"—concepts that were completely foreign to me. I tried to appear knowledgeable, even though I was mostly lost. My grandfather would occasionally ask the advisor to clarify key points, such as the risks of withdrawing investments prematurely, especially during market downturns.

Once the investment was set up, I started receiving quarterly email updates about my portfolio. I rarely checked them and almost forgot about the account. Then, during a family Easter gathering two years later, the topic of investments came up. My brother, who had a similar arrangement, asked about my portfolio’s performance. I checked my email and discovered my balance had grown to 28,138 ZAR—a 34% increase in just two years.

By then, I had finished university and was earning a steady income through my PR business. I was still figuring out taxes and tended to overestimate how much to set aside each month. In 2022, after hiring a tax consultant and submitting my annual tax returns, I realized I had more savings than expected.

Lessons from My Grandfather

Courtesy of Alice Draper

Taking Charge of My Investments

Three years after my grandfather helped me start my investment journey, I reached out to my financial advisor to ask about adding another 80,000 rand to my portfolio. We arranged this, and I also set up a monthly debit order to contribute to a tax-free retirement fund.

My grandfather’s gift was more than just money—it was an introduction to financial literacy. He understood that the most effective way for me to appreciate investing was to watch my own savings grow. I’m grateful to still have him as a mentor, and I often seek his guidance on financial and business matters. He never dictated what I should do with my money; even at 21, he left the decisions up to me.

His philosophy has always been that empowering people with knowledge, skills, and resources provides a unique sense of security. Learning to invest at a young age gave me the confidence to make informed financial decisions as my circumstances evolved.

Read the original article on Business Insider.