If you walked into the bedroom of a typical American middle school kid in the 1980s, you would probably not find a stack of company annual reports on the bookshelf. The same applies to the home office of a typical middle aged man in 2025, decades after the invention of the PDF file.
My upbringing was perhaps a little different from most.
Instead of Sports Illustrated, I collected glossy annual reports that my father would drop off in my room after we got them in the mail. And I’ve actually got a stack of them on my desk right now.
To be fair to my high school self, the annual report pile would later primarily function as a way of discreetly storing swimsuit issues in between. I wasn’t totally abnormal!
My investing “origin story”
Investing may not be the most common family pastime, but there are certain benefits if it is.
Children learn from their parents many things that they cannot learn in school—habits, attitudes, moral boundaries, life skills. So much of who we become as adults is connected to the patterns and behaviors we witnessed as children.
This very much extends to personal finance, especially since our K-12 education system barely touches the subject at all, which is unfortunate.
What most of us know and believe about spending, saving and investing, at least initially, is shaped by our parental role models.
I was lucky enough to have a father who was a highly engaged investor. He not only invested personally, but, as an economics professor, he even taught classes on investments.
My dad liked dividends. He still does. The Income Builder Model Portfolio is his personal favorite. He was also an investor in the dividend-focused mutual funds I previously managed.
He actually taught me the dividend discount model when I was in middle school.
It’s one of the original valuation methods for stocks—basically an algebraic formula that involves dividing the expected dividend by the assumed cost of equity minus the long-term growth rate.
Cracking the code
Companies still send annual reports to shareholders. (You can’t let them trick you into opting out of paper delivery.) Back then, well before the Internet, investors really relied on them for information.
One annual report that sticks out in my memory was the one from Beatrice Corporation.
The company no longer exists, but it was a giant food conglomerate that owned brands like Tropicana and Dannon. I probably was impressed by the fact that they made the orange juice and yogurt I always saw in the fridge.
I remember investigating Beatrice with my dad. I don’t recall the exact figures, but the stock definitely offered a nice chunky dividend.
Our investment research activities included trips to the local public library. We would go to the reference area upstairs in the “grown up” section and flip through the Value Line Investment Survey.
Back in the 1980s, this was a thick book with very useful one or two page company write-ups with key pieces of information… not too dissimilar from the Company Snapshots we now include in all of our Model Portfolio reports.
My father and I would look up stocks that we owned, like Beatrice, take some notes, and maybe even photocopy a few pages.
I enjoyed the trips. It was like doing detective work, or better yet, cracking some kind of secret code.
Beatrice provided what may have been my first lesson as a value investor.
It was eventually acquired in 1986 by Kohlberg Kravis Roberts & Co. (KKR) for over $6 billion. It was one of the largest leveraged buyouts at the time.
Shares rallied about 50% from where they were before the deal was rumored. We were quite pleased.
KKR ultimately sold off all the divisions within the company and made even more money. The businesses within Beatrice were worth way more than the stock market was giving the company credit for.
Beatrice was a cash cow, which the high dividend reflected. If you appreciated how valuable the underlying businesses were, you could have been a Beatrice shareholder as well and made a lot of money.
The appeal of investing
Investing has always been a major part of my life. I eventually became a professional investor, managing money for others, but have always invested my own money.
Probably the thing I like most about investing is the way it integrates basically everything in life… math, science, technology, psychology, politics, history. You’re constantly solving puzzles that challenge every part of your mind and understanding of the world.
The other nifty thing, of course, is being able to make a lot of money without really doing anything other than reading, thinking and perhaps performing some calculations.
The ability to turn a dollar into two with just a few keystrokes and a little time is pretty magical.
As a kid who liked to do his own thing, I understood that it’s definitely a better way of obtaining money than completing tasks that some other person tells you to do.
I was fortunate enough to have an influence in my life who familiarized me with investing and its potential pay-offs.
For many people, however, investing seems very complicated and intimidating. They keep their distance and as a result often miss out.
Extending the legacy
I have three sons myself now, two of whom are legal adults. They are attending or on their way to college and have set up their own independent brokerage accounts.
The youngest is not much older than I was when I would go on the fact-finding missions to the library.
I’m not pushing my sons to become professional investors themselves, nor am I discouraging it. I want them to find their own path and pursue their assorted talents as they see fit.
But whatever direction they go career-wise, I do want them to know as much as they possibly can about investing.
At this stage of my life, I appreciate how investment decisions I made (or didn’t make) decades ago have had major consequences for my family today.
So for the benefit of my sons, I decided to distill what I think are the key things they need to understand and prioritize as they begin their adult lives and investing journeys.
I also wanted to share these thoughts with our 76research subscribers.
Many of you, of course, have kids of your own. One subscriber in particular has mentioned to me that he uses our content to help his own son develop as an investor. Trish and I are thrilled to be helpful in that way.
NINE THINGS I WANT MY SONS TO KNOW
What follows below is not necessarily conventional financial advice. It reflects my own personal psychology around investing, convictions about how our economic system works, and attitude towards risk.
But after several decades as both a professional and private investor, this is where I land… and what I want my boys to know….
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