Rich kid, poor kid

National Post | by Garry Marr | May 16, 2009 | read source

How young is too young to attend your first annual general meeting? My eight-year-old son would tell you there is no minimum age.

He made it to his first AGM, courtesy of the shares he owns in Bell Canada Enterprises Inc. He has my dearly departed grandfather to thank for the stock, who always gave his grandchildren and great-grandchildren the gift of "The Bell" upon their birth.

"Do I get to vote?" my son wanted to know, excited about this emancipation of his oppressed class --children. "I don't get to vote in politics."

In the past, he has taken his voting proxy very seriously. Not that it's always logical. He's a kid. Last year, he initially crossed out Jimmy Pattison for the BCE board but quickly changed his mind when mom pointed out the billionaire built Great Wolf Lodge in Niagara Falls, his favourite water park. "What?" he said, then scrambled to erase his earlier vote.

His votes at this year's AGM were a little more logical. He was in favour of a proposal that would have paid out missed dividends on July 15, 2008, and Oct. 15, 2008, when BCE was in the midst of a takeover.

"I want the money," he said. He's a little too young to understand the merits of the company keeping the cash to buy back its own shares and cancel them. A few older people don't agree with the BCE course of action either, based on a proposal for the company to cease and desist its share buy-back program.

Tom Hamza, president of the Investor Education Fund, which is funded by the Ontario Securities Commission, laughed when I told him I took my son to his first AGM, but he didn't think it was completely outrageous.

"I'm not sure what the rules are on age [and voting]. But I suppose as an owner he should be able to vote," says Mr. Hamza, whose organization's mandate includes educating school children about the capital markets.

All jokes aside, he says there is a lack of education for kids so parents need to take it upon themselves to educate their children about the stock markets.

"In the school system, in nine of 10 provinces, [basic financial courses] are not mandatory," says Mr. Hamza. British Columbia is the only province that demands students take a Grade 10 course on the subject.

His group has been active in Ontario, and now takes its program into high schools in 19 school boards. "It's an uphill battle until this becomes part of the curriculum and not just a one-shot battle in Grade 9. [Investor education] needs to be integrated into the curriculum," says Mr. Hamza.

Darren Weeks, founder of the Fast Track group of companies, which he describes as focused on "increasing Canadians' financial IQs," says the educational system is failing children.

"I don't think it's ever too early to teach kids about money," says Mr. Weeks, who is the Canadian distributor of a board game called Cash Flow, created by Robert Kiyosaki, the best-selling author of Rich Dad Poor Dad.

Mr. Weeks sent me a copy of the game and let's just say my eight-year-old hasn't gotten much sleep over the past few days because he wants to play it all the time.

Players get a starting salary of $1,000 and can invest that money in different assets. (You immediately have to return $700 to pay for living expenses.) You draw cards which allow you to invest in different types of securities with the remaining cash. You also draw cards which lead to some questionable investments.

My eight-year-old was incensed when he had to purchase a gold necklace for $50 with a credit card. "This is a liability!" he said, indignantly. "This is going to increase my monthly expenses!" He expressed mild irritation when he drew a card telling him he had purchased bikes for the family, which would increase his monthly credit card bill by $30.

"Kids seem to be able to learn more when there is a game involved," says Mr. Weeks, who doesn't hold out much hope that the education system will help our children learn about financial markets. "Maybe there should be a course on how money works. Maybe it should be mandatory," he says.

I would say not maybe, but definitely. Until then, it's up to parents to educate.

Dusty wallet DW is a big fan of dividend reinvestment programs (DRIPs). Obviously, DRIPs are not for people who need the income from their stocks to live, but for many of us those dividend cheques end up burning a hole in our pockets. Taking your dividend and enrolling it in a DRIP is a nice forced savings.