Streetwise

Lauren Rudd

Sunday, December 12, 2010

A Guaranteed Return

It is that time of the year again, the time for holiday parties, gift giving and a good time to be had by all...well maybe not all. There are many for whom the economic downturn has wrenched away much, if not all, of the holiday spirit.

Many of you know what is coming next, so sit back with another glass of eggnog and think of it as a refresher course. For new readers, this is the one time of the year when I stray a bit from my normal investment fare in order to show you how to achieve some guaranteed exceptional returns.

It all begins with the concept of compounding; a force that Albert Einstein said was the most powerful force in the universe. Let me give you an example.

We begin back in 1947, in Los Angeles, California. Diane Hendricks has created a handmade Raggedy Ann doll that she wants to donate to charity. She asks her husband Bill to give the doll to any organization in the area that would forward it on to a needy child. Unfortunately, Bill was unable to find such an organization.

In relating this predicament to his wife, Diane’s suggestion was that maybe Bill should start one. As luck would have it, Bill was also Major Bill Hendricks, a Marine Reservist. He and his fellow reservists proceeded to collect and distribute 5,000 toys to needy children.

Their campaign was so successful that the Marine Corps officially adopted “Toys for Tots” and expanded it into a nationwide effort. Their mission is the same today as it was back then, to bring holiday joy to America’s needy children.

“Toys for Tots” received an added boost because in civilian life Hendricks was also the publicity director for Warner Brothers. Therefore, in addition to drafting various celebrities to help publicize the program, Hendricks was able to persuade Walt Disney to design the “Toys for Tots” logo. That logo is still in use today. Disney also designed the first poster used to promote what had become a nationwide program.

The investment of one Raggedy Ann doll, in the life of one child 62 years ago, is today the “Toys for Tots” Foundation, a non-profit organization that has collected and distributed more than 370 million toys to 173 million needy children. This charitable endeavor has made the Marines an unchallenged leader in looking after needy children during the holiday season. Now do you see what compounding can do?

At this point, as you sit there contemplating your eggnog, I have a favor to ask. As many of you know, this is the one and only time that I actually recommend a specific investment, an investment that will pay dividends far in excess of what you will receive on Wall Street.

Yes, the call for help is never ending, and this year is certainly no exception. Still, try to imagine what it must be like for a child not to receive a gift this holiday season. Right now there are more than 13 million children living in extreme poverty and the number has increased by 2.5 million over the past ten years.

According to the National Center for Children in Poverty, another 16 million children live in very low-income families that are nonetheless ineligible for public aid. Yes, I know many of you are on a restricted budget because of the economy. Nonetheless, please take the time to purchase at least a small toy or two for a local charity or the “Toys for Tots” program.

Oh, one other small favor. When you are out shopping, you will no doubt notice the volunteers outside your favorite store ringing a bell to try to get your attention. Think about what it must be like to stand outside for hours on end in winter weather, trying to raise money for the needy. At least here in Florida the temperature is almost always warm.

Therefore, this is what I would like you to do. Instead of just walking by, take a moment to pause and reach into your purse or pocket. No, do not reach for the coins. Please, dig a little deeper. Work your way down to where you keep the folding stuff. Find that picture of old Abe Lincoln and drop it in the pot. I am sure old Abe would approve.