Still Don’t Think the Economy is Improving? Just ask the Tooth Fairy.

Liza Miller, age 5. First tooth in hand.

My children are ages 5, 7 and 9. The oldest and youngest are girls, with a boy in the middle. So, we’ve had a loose tooth in the house seemingly every month for the last few years. The excitement the kids exude that first day they realize they have a loose tooth never decreases, tooth after tooth. Then, after days (and sometimes weeks!) of wiggling, tugging and pulling, the tooth finally falls out! That can mean only one thing, right? The tooth fairy will pay a visit that night!

In case your children are too old (or too young) to have a loose tooth, you may be curious about the “going rate” for lost baby teeth in the United States. Well, the average gift from the Tooth Fairy climbed to $2.42 last year, up from $2.10 in 2011, according to the Delta Dental Original Tooth Fairy Poll. By the way, that 15.2% gain is comparable to the gain of the stock market last year. In fact, the Original Tooth Fairy Poll has generally been a good barometer for the stock market’s overall direction, tracking the movement of the S&P 500 in nine of the past ten years.

Interestingly, the survey found that the Tooth Fairy is even more generous for first-time tooth losers, on average leaving $3.49 for the first tooth. I guess that “higher valuation” for the first tooth is supported by the added anticipation and excitement of the first to go.

In our house, the Tooth Fairy tends to leave a few bucks and some type of sugarless chewing gum or memento under the child’s pillow. That seems in line with the results of the poll and probably the appropriate inflationary increase since the days when I was losing my baby teeth. The stock market is having another good year so far in 2013, so we’ll have to wait and see if the trend of the Tooth Fairy Index keeps up with the S&P.

So, how does this relate to what we do as professional financial advisors at Woodward Financial Advisors? It probably doesn’t, other than the fact that we believe in good oral health care, the future of our economy…..and the Tooth Fairy.