My amazing grandmother will turn 94 years young this year. As she is the person who first got me interested in saving money for a rainy day and investing in the stock market, I have been meaning to do this interview for awhile now. Since she does not hear well, but is an avid emailer, a written interview proved to be the perfect format. While I am not sure she fully understood what I meant when I told her this would be published on my blog, she buys things on ebay and manages her portfolio and plays bridge online, so it is quite possible she knew exactly what I meant.
1. Tell us a little about yourself including any relevant financial info.
I was a child of the Depression. Ten years old when the market crashed. We lived with my grandparents which was very common at that time, to have three generations living under one roof. My grandfather was a retired banker and quite well off but lost a great deal of money. The little set backs now are not like the big and long depression of the 30s and 40s. I wore cast-off clothes my mother remodeled. One Christmas my only present was my sled repainted—-I was not too happy about that. Everyone was poor so all my classmates also worn cast off clothes-no big deal. More than anything I wanted a bicycle and had plans to get some money. In 3rd grade I talked a couple of my class mates into the plan. We would have a garden. I would furnish the land (my grandfathers) and they would buy the seed and we would sell the produce on the mkt. square. Nothing grew. I built a miniature golf course===ten cents to play. Some one broke one of my fathers clubs—-end of golf course. So having said all this it has had a lasting influence on how I feel about money.
2. What are your biggest financial challenges right now?
Don’t have one.
3. Discuss your financial goals.
My goal is not to run out of money, not much chance of that.
4. What is the best piece of financial advice you have ever received?
Until I was in my 50s I never had any money to invest or was I interested in the market. A pity. I think one should start to invest as soon as they have money. In 1970 we were suddenly jobless. The only money coming in was a $172.00 monthly pension. Everything was for sale, including our house. It did not sell. I found a job but not much pay. After two years of struggling we moved to Turkey to live in a very primitive village. Your grandfather worked for the government to help build and start a paper mill. The money was good for the time. When we came home we had $20,000. to invest and live on. Not much now but then quite a bit. I decided to go into the market much against my husbands wishes. I went to a broker and he sold us a fund with an 8 1/5 percent load. Bad advice. Next broker was even worse. I studied and worked out my own system of investing based on price earning ratios, insiders buying, and many other things. I started making money and still am. So I can not say that I took anyone’s advice. Not my husbands not the broker or anyone and was scared to death at what I was doing.
5. What is the best piece of financial advice you could give?
What you spend money on is so personal that I can not give advice. What makes you happy. I go across town to save ten cents on a pound on bananas—–I darn my socks—-I paint my house. I have even been know to buy day old bread. I save the pennies and spend the dollars. I have done expensive remodeling of my house and think nothing of plunking down money for this. I take some wonderful, quite expensive trips almost every year and as I write this am leaving next month for a cruise. Money is to be enjoyed.
6. When you were my age (mid 30s) were there any rules of thumb about how much to spend on things? Such as how much you should spend on an engagement ring or how much to spend on a house? And how much of a down payment did you have to put on a house?
It use to be 2 times salary (for a house). It is hard to judge over a period of 50 or more years. Engagement ring—–what is that? Never had one. Lucky to have a wedding ring. Your grandfather had education debts to pay off and the army pay was not too great. As a example as a private I was earning $21.00 a month and your grandfather was earning $110. Education for your children is expensive(now). I don’t remember that we paid hardly anything. Both kids worked all summer and I think almost paid for their education. When buying things don’t overlook second hand. Some beautiful furniture for sale very cheap.
7. Were there any rules of thumb as to how much of your salary you should put into savings?
We put almost nothing in savings which was perhaps a mistake. How much you save depends on how much you earn. Different for each family.
8. What words of wisdom do you have for me or people my age? Financial or otherwise.
Enjoy every minute of every day. You can not compare money earned now and money earned years ago—but you also can not buy a new car for $2000. today. I am so thankful I went into the market against everyone’s advice. Had I not I would have spent the last 30 years on welfare. Investing has changed a great deal in the last 40 years. I made my money on stocks. Now I think the funds have taken over the market and no matter how good a stock is if the funds don’t pick up on it won’t go any place. I am not making much money now because I have about half stock funds and bond funds. They balance out.
My main concern about the market now is the great debt the government has and they continue to waste huge amount of money and no one seems to care. Could the market crash again? I am not sure. The biggest mistake I have made in the last few years was in 2006 when I felt the mkt was greatly over sold, which it was and there was a melt down. At that time I transferred quite a large amount to foreign stocks thinking they would hold up. They did not. All went down and have not been able to recover. I have just sold off the last of them at quite a loss. I am fascinated with the market and pay close attention. It’s a giant bridge game.
I hope this is want you wanted. Lots of fun doing it.
Thanks so much to my grandmother for sharing. I love hearing words of wisdom from older generations. So much has changed over the years in terms of what people view as necessities. I was most surprised by her answer to number 5 with ‘money is to be enjoyed’ as my grandmother is the most frugal person I know. I suspect she would not have said the same thing 20 or 30 years ago. While she did not start investing early, she did invest in the 70′s, which is now almost 40 years ago, so her money has had plenty of time to grow!
Have you ever talked to older people in your family about money? Do they have any words of wisdom to share?
Photo credit: Studio 306