A Tuppence can feed the birds, but can he pay off a mortgage?


If you’re looking for # 17 Cherry Tree Lane, where Mary Poppins worked her magic on the Banks children, you’ll find it very soon. For starters, it’s the smallest house in the alley. And on top of that, it’s the only one in foreclosure.

The family, it seems, have gone through difficult times.

You may remember Michael Banks as one of the kids tamed by the enchanting nanny who was immortalized in the 1964 Julie Andrews film.

In the last film version of the tale, “Mary Poppins Returns”, 25 years have passed. Michael is a widower with three children, and the family home, where he still resides, will be lost unless he can repay a loan he took out for the house.

Fortunately, in 1910 when the original film was made, young Michael’s father invested two cents on his son’s behalf. At the time, the British tuppence was equivalent to about four hundred Americans, or as Mary Poppins sang, the cost of a bag of crumbs to feed the birds.

If adult Michael can find the share certificate, he can save his house. But would the return on such a small investment be enough?

As Mary Poppins might say, chic and chic.

“It’s a little hard to extrapolate all the numbers,” said Carrie Schwab-Pomerantz, a financial literacy advocate, but according to the Schwab Center for Financial Research, the cost of an average house in London in 1935 was of around £ 695.

If Michael had had to repay the full amount 25 years after investing his money, he should have achieved average annualized returns of 49.5%.

Contributing to the account more regularly would have improved his prospects, but the Schwab Center calculated that if he had invested two pence every month from ages 5 to 16 and had been invested for 25 years, he would still have needed ‘an annualized return of 29.2% to pay off the full value of the family home.

Melanie Mortimer, president of the Securities Industry and Financial Markets Association Foundation, pondered what kind of investment might have attracted Michael, or some other kid of that time, and speculated that a familiar brand might have captured her interest.

“If on behalf of Michael Banks, his father George had invested his money in a company of growing international appeal, he might have chosen Procter & Gamble.,

”Ms. Mortimer said.

At the time, the Ohio-based company had been recognized for Ivory, its unique floating bath soap.

“It’s no exaggeration to think that a bar of floating soap was in Banks’ house,” Ms. Mortimer said, along with other Procter & Gamble products. “Maybe there was Crisco oil in the kitchen. In the 1920s, her sister Jane may have used Camay soap. We think it would have been a good investment.

It would also have taken more than Michael’s tuppence. Procter & Gamble was first listed on the New York Stock Exchange in 1891, when it was sold in blocks of 100 shares and had a single price of $ 100.

If, perhaps with the help of a magical nanny, the Banks were able to invest Michael’s tuppence, its value after 25 years would be difficult to assess: “We haven’t quite reached that final number. “Said Ms. Mortimer,” but we do know that an investment made from 1914, when World War I struck, in 1925, the jazz era, would have doubled. He would have zoomed to 4 pence.

This may not sound encouraging. But if the film has piqued the interest of small investors in your life, Ms Schwab-Pomerantz has suggested a modern, perhaps more inspiring script:

If a child (funded by a parent) had invested $ 1,000 in Standard & Poor’s 500 US large-cap stocks 25 years ago, today the account would be worth $ 9,475. And if the child had contributed an additional $ 100 each month, the investment would be worth $ 109,717.

Not to diminish the enchantments of Mary Poppins, but the real magic, according to Mark T. Brookshire, the founder of StockTrak, a virtual trading game, is compound interest.

Nowadays, no one buys bird food at a tuppence le sac. But what about that dose of fine coffee that many of us savor?

“If you stop buying that latte every day and pocket that $ 5 and invest it, that’s your retirement account,” Mr Brookshire said.

Or, as Mary Poppins might say, start investing locally.

Write to Jo Craven McGinty at [email protected]

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