Rule Breaker Portfolio Put Your Teen to Work

Lifelong success can begin with a teenage job, says a mother and Motley Fool Community member. She lists all the meaningful things her teenagers learned while working at "less-than-meaningful" jobs. Tom Jacobs adds a few of his own lessons learned.

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By Tom Jacobs (TMF Tom9)
January 28, 2003

Are you a parent, or do you know someone like this Foolish mother, who wrote this story about her working teens?

"I've had other parents say to me, 'My kid's not going to sling hash. They should get a meaningful job.' It's a nice sentiment but even if you are going to be an entrepreneur, it's good to get the buzz of the worker bee because you'll eventually be hiring worker bees. Meaningful jobs can be hard to come by if you're a teenager but there's still lots of learning to be had from a less-than-meaningful job."

There sure is lots of learning, and it makes me wonder what on earth people mean by "meaningful." The high school or college job is one of the few ways left that we mix with people who aren't like us, learn what it's like in some ways to be in the military without being in it, and make some mistakes without blemishing our r�sum�. Not to mention the experience.

That's meaningful.

They've upped the ante, for sure
I know that today's teenage world, despite certain qualities that never change, is very different than mine. My friends and I could work 24-32 hours a week throughout high school and still get into a good college, while today applications to top schools have exploded, making admission tougher. Applicants these days can't just be good students; they must walk on water while at the same time confront a pace of technological and social change unimaginable to me.

They have to work to screen out distractions, where we had but three channels of TV, a half dozen of radio, and a record player. Computers, video games, and cell phones attack them at every moment. Where the uniform of 30 years ago consisted of the very inexpensive ripped (by wear, not design) jeans and a T-shirt, worn repeatedly, even the easiest one today requires more variety. The individual items may cost less counting inflation, but teens have more of them -- music, too. Sex? There was "only" the risk of getting pregnant.

Yes, there's just so much more noise, making it harder to do what poet e.e. cummings described: "It takes courage to grow up and turn out to be who you really are." But on the practical side, this mother simply determined that if her kids wanted so much Stuff, they would have to pay for it.

But work matters
That's not easy for the parent, because whatever the rules, family logistics are well beyond puzzling. It's harder to be a parent. With the increase in single-parent households and two earners the norm elsewhere, there are libraries and cable channels devoted to the inability to get everything done (though commentator and Weekly Standard writer David Brooks' pithy response is that most people in the country's middle shake their heads at what they see as a coastal phenomenon, pitying all these people who are too busy to have friends and know their neighbors. Ouch!). For these families, teen work just adds more complications. Our Foolish mother recognizes this:

"They were each able to get a job because the shop needed reliable workers and I was a regular customer.... There were sacrifices on my part -- would you enjoy getting up to take your child to work at 6 a.m. on weekend mornings until they could drive? -- but I felt it was part of my job as a parent."

So her teens served food and worked as custodians. Their mother says they learned the following:

  • It's not a lot of fun to go to work at 6 a.m.
  • It's a good idea to get a job with a flexible manager.
  • It's fun to get paid and nice to get a cut of the tips, especially in December.
  • Rich people don't necessarily have manners.
  • It's good to work somewhere that closes at 2 p.m.
  • It's good to have money of your own.
  • You don't want to work in a coffee shop forever and going to college looks better every day.
  • Everyone doesn't have a warm and fuzzy home so you're grateful for what you have, even if your mother can sometimes be a pain!
  • When you work, you are treated as an equal by co-workers.

Indeed. I particularly loved the "Rich people don't necessarily have manners" line. While I don't believe that money or the lack of it creates a monopoly on rudeness, it is funny how some people feel they can treat service personnel badly. I'll never forgot when a woman in my old Minneapolis neighborhood, dressed to the nines, exited her Mercedes and stomped back into a local ice cream and cafe, throwing her muffin at the teen male who served her (and who was a regular counter jockey who never failed to greet me appropriately or correct any error), screeching, "That's not an apricot walnut muffin!" And tore out. Baby, that's assault. You can do a lot of damage to a person with the mutant muffins turned out at cafes these days.

All you need to know you learned slinging hash
Even after teaching high school, I worked with young people on and off for years in various jobs and have been stunned to find some who have never had a paying job before, even in college. Some, but certainly not all, arrive with a sense of entitlement that I find astonishing. I partially admire their chutzpah -- and, of course, they will all be great successes long before my age -- but it's pretty clear to me that they never learned half of those things above and could benefit from them.

I wasn't all that happy when my Dad marched me up to the town drugstore at 15 to start my high school years by working 24-32 hours a week as a clerk and stock boy -- a job they were willing to try me in because my brother had been a star there for many years before. Heck, I wasn't happy with anything my father did, frankly, and this meant no school newspaper, where my ambitions lay, and certainly no plays or yearbook. And it being the early 1970s, I still got into a lot of trouble. Yet there was no discussion. This job and my saving a certain amount for college -- and going to one -- were not negotiable. 

In addition to the list above, I learned four things about work:

  • Show up. On time.
  • Do what you're asked promptly and gladly.
  • Do what you say you'll do completely and on time, or negotiate another time.
  • No matter what happens, you can make your way in the world, even if it's in a less-meaningful position than you might like. Lots of people do. Perhaps most.  

They are still true.

From now on, whenever we hear or read someone ranting that the poor are responsible for their own problems and that any assistance is opium, we might ask them about their parents and home life. Were these people born with work ethic fully formed? I doubt it. Young people must learn somehow, and in the best of all possible worlds, parents can require that they work and help them do it. (Our nifty Motley Fool Investment Guide for Teens and Living Below Your Means and Parents discussion boards can help.) But I resolve to remember that not all people live or can afford to live where jobs for teens are available or have parents who are able to teach them.

I don't think that there was ever some imaginary time when life was easy and better, but it does seem at least anecdotally that we increasingly live only with others like ourselves, and that we have less and less to unify us beyond what we consume. We have no compulsory national service. We have maybe one child who doesn't learn how to share with a sibling, or we have two who have more and more space from each other. Work is one way for them to join the face-to-face world.

Our Fool mother closed by saying, "I think it's been a good learning experience for the kids. [Son] wants to know when we'll let him work and is gunning for "Official Taster" at the coffee shop. Do our kids understand stocks and investing? Yes. Do they understand where money comes from? Definitely."

And four years later she adds, "They have moved on... he's an experienced bike mechanic majoring in mechanical engineering. Each of them has a Roth [IRA] and she will graduate from college this spring with no debt."

Back to work! Have a most Foolish week. Updated portfolio returns below.

Tom Jacobs (TMF Tom9) has three nieces who worked and had time for other activities, and they appear to have survived teenhood (we'll wait a little longer to be sure). Catch Tom's in-depth stock analysis in The Motley Fool Select (if you subscribe today, you get our Stocks 2003 free!). You can also hear Tom with Bill Mann this evening on Online Tonight with David Lawrence (to listen to this or earlier shows, choose first hour, segment three). His stock holdings appear in his profile, served up hot by The Motley Fool's disclosure policy.

Rule Breaker Portfolio Returns as of 01/27/03 Market Close:

            RB        S&P     S&P 500
            Port      500      DA*    Nasdaq
Week       -1.82%    -6.02%    --     -3.70%
Month       6.64%    -3.68%    --     -0.77%
Year 6.64% -3.68% -- -0.77%
CAGR
using IRR** since 8/4/94*** 21.13% 7.51% 9.26% 7.45%
10/20/98*** 0.90% -5.27% -4.84% -6.14%

*Dividends added. Or, danger ahead. Whatever.

**Compound Annual Growth Rate using Internal Rate of Return. This performance measure is more meaningful than total return because we began adding cash occasionally in July 2001. In a total return calculation, or ((Current Value - All Cash Deposited)/All Cash Deposited), cash added would show up as returns. And that wouldn't be cricket!

***What's this? The Rule Breaker Portfolio's precursor, the Fool Portfolio, was born Aug. 4, 1994. In a 10/20/98 column, David Gardner announced the name change of the Fool Portfolio to the Rule Breaker Portfolio. Here we provide returns as if the RB Port started on either date. Remember, don't mimic any online portfolio. Most individual investors should restrict any positions as risky as these to under 20% of their portfolio -- and could have a long and happy investing life with 0%.

Rule Breaker Portfolio

  Ticker Company Price
 Change
 Daily Price
 % Change
 Price 
  AMZN AMAZON.COM, INC. (0.16) (0.73%) 21.62 
  AOL AOL TIME WARNER INC. 0.09 0.66% 13.66 
  TREE LENDINGTREE INC 0.45 3.21% 14.48 
  EBAY EBAY INC (0.26) (0.35%) 73.43 
  MLNM MILLENNIUM PHARMACEUTICALS INC 0.35 4.37% 8.36 
 SHORT  SIRI SIRIUS SATELLITE RADIO INC (0.04) (3.67%) 1.05 
  SBUX STARBUCKS CORP 0.07 0.31% 22.69 
  AMGN AMGEN INC 0.81 1.60% 51.59 
 SHORT  GTRC GUITAR CENTER INC 0.00 0.00% 19.00 
  SPY SPDR TRUST;1 0.63 0.74% 85.83 
      
  Trade Date # Shares Ticker Cost/Share Price  Total % Ret  
 09/09/97 1320 AMZN 3.20 21.62  583.27%
 08/05/94 4020 AOL 0.46 13.66  3,007.82%
 06/03/02 916 TREE 13.72 14.48  5.62%
 02/26/99 1145 EBAY 46.54 73.43  57.80%
 09/27/01 2260 MLNM 14.69 8.36  -43.07%
 SHORT 01/24/02 2500 SIRI 6.90 1.05  84.78%
 07/02/98 940 SBUX 13.98 22.69  62.43%
 12/16/98 1160 AMGN 21.44 51.59  140.65%
 SHORT 08/21/02 1000 GTRC 16.49 19.00  -15.29%
 04/24/02 290 SPY 110.16 85.83  -22.04%
      
  Trade Date # Shares Ticker Total Cost Current Value  Total Gain  
 09/09/97 1320 AMZN 4,220.20 28,538.40  24,318.20 
 08/05/94 4020 AOL 1,860.42 54,913.20  53,052.78 
 06/03/02 916 TREE 12,565.44 13,263.68  698.24 
 02/26/99 1145 EBAY 53,294.44 84,077.35  30,782.91 
 09/27/01 2260 MLNM 33,207.00 18,893.60  -14,313.40 
 SHORT 01/24/02 2500 SIRI 17,258.26 2,625.00  14,616.74 
 07/02/98 940 SBUX 13,138.62 21,328.60  8,189.98 
 12/16/98 1160 AMGN 24,875.50 59,844.40  34,968.90 
 SHORT 08/21/02 1000 GTRC 16,488.00 19,000.00  -2,528.00 
 04/24/02 290 SPY 31,945.00 24,890.70  -7,054.30 
Cash:573.54 
Total:318,428.47 


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Note
The Fool Portfolio was launched on August 5, 1994, with $50,000. It was renamed the Rule Breaker Portfolio in October 1998. The investing strategy began with the first investments of the Fool Port and has evolved with time and experience. In July 2001, the portfolio began adding $12,500 each quarter (We missed Jan. 2002, so we added $25,000 in April 2002). We skip a quarter if we have enough uninvested cash or cash available in stocks we would prefer to sell to make new investments. All transactions are shared and explained publicly before being made, and returns are compared in each week's column to the S&P 500 (including dividends where noted) and the Nasdaq composite. For a history of all transactions, please click here.