I used to trade stocks with my grandma. Here’s what she taught me about managing money

It was circa 2004/2005. I was in university and living with my grandparents.

“Check the dividend yield, honey,” said my Nana at the kitchen table.

I scanned and responded, “This one is at three per cent.”

“Now, let’s take a look at their competitors’ yields and see who’s been consistently increasing their dividend. And, run the price-to-earnings ratio too, sweetheart. It’s so that we can properly compare.”

“On it!”

“Oh and by the way, did you see any red flags (other than no dividend) with the WestJet stock when you read the MD&A?” my Nana asked.

“Not at the moment. They seem like a welcomed competitor in the market with a strong growth strategy. Eventually they’ll have to pay investors a dividend,” I said.

“That’s good. I’ll add more shares today and take some profit off the table,” said my Nana while she sipped her tea.

I followed along with her strategy and made enough money to pay my next year’s tuition.

In the evenings I read her my finance and marketing textbooks (she’d lost her eyesight a few years earlier), and she was my sounding board for my stock-trading project — a dividend investment strategy — in my final semester of university. Nana and I aced the class.

Fast forward to 2022.

My Nana, Velma Scorgie, passed away last week at 100 years old.

She was one of the original financial feminists and shaped a lot of what I know about money today. In her 20s she held a job in finance on Bay Street until she got pregnant and her role was abruptly eliminated. But that didn’t stop her from continuing her financial learning, investing and focusing on ensuring her kids and grandkids would become financially savvy themselves.

Here’s what she taught me about money.

Women are excellent investors

It wasn’t the norm for women to call the shots on household investments 50 or 75 years ago, but my grandfather and Nana had a clear understanding that she was more equipped to make those decisions. An avid reader and an extremely strong number-cruncher, my Nana was the queen of pulling together technical and fundamental analyses of the market, and finding specific stocks that suited their balanced-growth investment strategy.

With each payday, she’d allocate 20 per cent of their money toward their investments (always being mindful of tax-mitigation opportunities), met with the bank quarterly to review market conditions and performance, spearheaded purchase and sale decisions and ensured she and my grandfather would be thoroughly prepared for retirement at age 65.

Yes, she definitely faced discrimination along the way, especially when bringing her three tiny sons to the investment appointments while my grandfather was working, but she worked through it and kept on going.

As it turns out, research shows that women, when given the opportunity to learn key investment skills, actually outperform their male counterparts in returns, which is precisely what my grandmother did.

Budget like a (mom) boss

My Nana used two tools to help her budget back in the day: a chequebook register to account for every transaction, and graph paper where she would lay out the household cost projections for the month ahead — mortgage, groceries, clothes for the children and so on. She’d often place these two budgeting tools side-by-side to compare what she set out to do, and how it ended up actually happening.

Today, we use budget templates and spending trackers in spreadsheets. But, the core skill of spending within one’s means remains the same. According to my Nana, they just didn’t really have the option to overspend because there were drastically fewer borrowing tools at that time. Imagine what having no backup credit-card room or lines of credit would be like today — #Gulp.

I copied my Nana’s budgeting strategy during my university days living with her and working part time (as a teller at RBC) while going to classes, and it worked brilliantly. I even ensured that before I paid for anything, I set aside money for my future. That stash of cash came in handy upon graduation when I used it to buy my first house at 21. And I always ensured my budget had room for some fun because “that’s what having money is all about,” my Nana would say.

Give while you live

Before I started university my Nana revealed to all eight grandchildren that she’d been investing a sizable pot of money specifically to help all of us with our education costs. Having grown up with zero money in my home, finding out I’d be getting some financial support for my tuition and books was a financial game-changer for me!

In my Nana’s view, passing along this money was a living investment in her family. “I want to smile at your success and sit at your graduations while I’m still alive,” she’d say. Little did she know that today, early intergenerational giving has become one of the hottest financial-planning trends. It’s a great way to see money work for the next generation, and in some cases it can be helpful when managing taxes.

(Here’s a fun tidbit: she kept my grandfather off of this particular investment account because no matter what happened to her and him, she’d be in 100 per cent control of this money.)

This too shall pass

Born during the Great Depression and then raised watching the Second World War happen, my Nana saw resources and life in general as being very precious … almost scarce. I think we’ve all gotten a taste of this from the pandemic and watching war break out between Russia and Ukraine.

My Nana didn’t waste food or money on frivolous things. She used coupons and capitalized on sales to stretch her resources. She consistently gave money and time to her community. She spent money on books, learning and travel a bit later in life because that’s what filled her cup. Sometimes she was a little too frugal; my Nana did not buy a right-side mirror on her early ’90s Honda Accord. But from her perspective, if the purchase wasn’t going to help her financial wellness, support her family or bring her joy, she could do without it: who relies on that right-side mirror anyways. (I’m just kidding — vehicle safety is important!)

My point is this, the world, the markets, our health, the economy … it’s evolving rapidly right now, and it’s not all for the better. Staying the course with your financial strategy, and protecting what’s yours — your family, your money, your community, your work — is how we’ll move forward.

Here’s the biggest thing I learned from my Nana. She didn’t leave her future to chance in the hopes that a better life would “just happen.” She always had a plan for her money and the way she wanted her life to take shape. As it happens, that’s EXACTLY what it takes to get ahead with money, relationships and your career.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.