Grandfather's Gift: Financial Literacy at 21

For her 21st birthday, Alice Draper received 21,000 South African rand (approximately $1,500 USD) from her grandfather. However, the gift came with a specific condition: she had to visit a financial advisor and invest the funds in the stock market. Although Draper initially spent her earnings from university jobs on lifestyle expenses, she agreed to the arrangement.

In early 2019, six months after her birthday, she met with a financial advisor to set up the portfolio. Over the next two years, the investment grew by 34%, reaching 28,138 ZAR. This success prompted Draper to take a more active role in her finances, eventually adding 80,000 ZAR to the portfolio and setting up a tax-free retirement fund. Draper credits her grandfather not just for the capital, but for the financial literacy she gained by watching her money grow.

One month before her 21st birthday, Alice Draper learned she would be receiving a significant gift. Her grandfather promised to gift her 21,000 South African rand, which was approximately $1,500 USD at the time. However, the offer came with a strict catch: she had to visit a financial advisor with him and invest the money in stocks.

At the time, Draper was a university student working a part-time bar job and taking on promoting gigs and freelance writing work. She valued the freedom money provided and had given little consideration to investing. Most of her earned money went toward subsidizing her university lifestyle, including nights out and takeaways, or was saved for specific occasions like road trips. Despite this, she welcomed the gift, knowing it was something she would grow to appreciate. She understood that investing was responsible, though she viewed it as a future priority rather than an immediate necessity.

The investment process began in early 2019, six months after Draper's 21st birthday. Her grandfather set up an appointment for her to meet her new financial advisor. They sat in a boardroom as the advisor explained stocks and the market. Draper struggled to understand the technical terminology being used.

The advisor threw around terms that went completely over her head, including:

• Repo rate
• Capital Gains Tax
• Volatility

Draper nodded along, hoping it looked like she understood more than she did. Her grandfather played an active role in the meeting, occasionally asking the advisor to explain important concepts. He specifically highlighted the risks of withdrawing the money too soon, particularly when the market was in a bad place. After the investment was set up, Draper received quarterly updates via email, which she rarely opened, almost forgetting about the portfolio entirely.

Two years after setting up the portfolio, the topic of investments came up during a family Easter holiday. Draper's brother asked how much her portfolio had grown, noting that their grandfather had set up a similar arrangement for him. Draper opened her email to check the balance for the first time in a long while.

The portfolio balance was 28,138 ZAR. This represented a 34% increase in just two years. By this time, Draper had graduated from university and was starting to earn a decent amount of money in her PR business. She was still unsure about how taxes worked, often overestimating the amount of money to put aside each month. However, in 2022, after hiring a tax consultant and filing her annual tax returns, she discovered she had a good chunk of money left in savings.

Three years after starting the initial investment, Draper decided to take a more proactive approach. She emailed her financial advisor to ask if she could add an additional 80,000 South African rand to the portfolio. The request was approved, and the investment was expanded. Draper also inquired about retirement planning, arranging a monthly debit order to go toward her tax-free retirement fund.

Reflecting on the experience, Draper noted that her grandfather did not merely gift her capital; he gave her the gift of financial literacy. He knew that the best way for her to understand the value of investing was to see her own money grow. She considers herself lucky to still have him around as a mentor and often asks him for financial and business advice. His approach is never prescriptive; even at 21, he never told her she had to keep her money with a financial advisor. Instead, he has always believed that equipping people with options through knowledge, tools, or resources creates a different kind of security. Learning to invest at 21 gave Draper exactly that: the ability to make thoughtful choices with her money as her life and income changed.