How I Really Learned about Personal Finance

How I Really Learned About Personal Finance
Photo by Karolina Grabowska from Pexels

𝗛𝗼𝘄 𝗜 𝗥𝗲𝗮𝗹𝗹𝘆 𝗟𝗲𝗮𝗿𝗻𝗲𝗱 𝗔𝗯𝗼𝘂𝘁 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗲.
I grew up in a modest family, and no one had any money, so no one could mentor us on how to handle it. Specifically how to hang on to it. Though I now have several degrees focused on money: Accounting, Finance, and Tax. I suspect, as is usually the case, my strongest lessons learned were through experience, my own, and those I could observe.

My older, now late, brother landed a well-paying, union job with the Long Island Rail Road. He was what you would call a gear-head, in love with speed and hotrods. He spent thousands on his 429 Ford Torino, and it was a well that could and would not be filled. This was when a thousand dollars was a great deal of money. For example, a semester at the local community college could be had for $230, books well under a hundred.

𝗙𝗼𝗿𝗺 𝗼𝘃𝗲𝗿 𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻.
One particularly bitter cold winter’s night, he called me in the early AM, his hotrod had broken down again. 30 minutes later, pitch-black out, I nearly did not see him desperately waving a pathetic excuse for a flashlight. He was nearly frozen when he climbed into the car. Did I suggest a different car and pastime might be in order? I can not remember, but it clearly registered with me—my first car, a used VW bug dependable, utilitarian, simple, and slow. Dependability has been my #1 priority ever since—a simple, reliable car for a simple, reliable man.

𝗖𝗼𝗻𝗰𝗲𝗻𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗥𝗶𝘀𝗸 𝗮𝗻𝗱 𝗔𝗿𝗿𝗼𝗴𝗮𝗻𝗰𝗲
Many years later, in 2008, I was working for JP Morgan Investment Bank, and a former colleague and good friend was across the street at Bear Stearns. We started getting wind of trouble at Bear Sterns, it took 85 years to build that firm, and its value was reduced to a relative pittance in a few painful, short days. My buddy, Neil, would call me and give me a blow by blow description of the carnage. [Neil hadn’t been there very long, so he didn’t have much to lose. Neil is also a skilled, well-regarded worker who slid back to us without missing a step.] It was a true human tragedy, and you see, many people had been with Bear for a very long time. Their retirements were all tied to BS stock. Now they were wiped-out, obliterated. Neil would tell me about all the individuals he knew, their stories and their dreams now gone. It wasn’t just the executives that suffered; it was the secretaries, clerks, and all levels.

𝗦𝗮𝘃𝗶𝗻𝗴𝘀, 𝗧𝗵𝗿𝗶𝗳𝘁, 𝗮𝗻𝗱 𝗯𝗲𝗶𝗻𝗴 𝗮 “𝗵𝗮𝗽𝗽𝘆 𝘁𝗼 𝗛𝗲𝗹𝗽” 𝗽𝗲𝗿𝘀𝗼𝗻 𝗮𝘁 𝘄𝗼𝗿𝗸
The mortgage meltdown and the “Great Recession” that followed saw many friends lose their jobs, and those highly leveraged lost their homes. It was a Perfect Storm. The stock market and home prices dropped like stones, Jobs evaporated, and things got quite desperate. When they extend unemployment, it is generally a sign things are desperate. I remember calculating how long I could last without a job. Zero debt and Living below our means meant a very long time. I survived, never missing a paycheck. I attribute this to being a “happy to help” and multi-skilled worker.

Playing catch-up is a game you want to avoid.
My older fishing buddy, Anthony was in his early 60’s when his sales job became increasingly shaky; It forced the realization that he had not done a good job of preparing for retirement. By the time I met Anthony, I had been an enthusiastic stock market investor and building our retirement nest egg for a long time. There was always money to invest because we did not spend all we earned. Working for an investment bank and getting exposure to all the businesses you are bound to learn. I will admit I enjoyed it and soaked it in. Anthony liked to pick my brain and suggest ideas. Anthony believed that you could find a hot investment, put some money in, and catch up. The truism came to mind: Those that can least afford to gamble are the ones most likely to do it. I explained to Anthony if you do not have much, you dare not risk it, but stress is the enemy of sound reason. Anthony never had a brokerage account, which should not have been surprising to me.

Approximately 6 in 10 households in the United States own securities investments—typically through taxable accounts, IRAs, or employer-sponsored retirement plans. However, this figure drops to a little over 3 in 10 if only taxable investments are considered.

How I Really Learned About Personal Finance
Photo by Pablo Gutierrez from Pexels

I doubt Anthony’s salary ever broke $80,000 a year, but the house was paid for. Both kids went to college for free. She had a low-paying job with great benefits. Anthony was an avid fisherman as was I. My idea of fishing was an inexpensive spinning rod/reel $50 worth of lures in my bag and chasing stripers at Hempstead Harbor (a ten-minute drive). Total Spring/Summer/Fall investment roughly $250.

Anthony on the other hand loved fresh-water fly fishing, which was odd because on Long Island opportunities to do so were virtually nil. Did you know you could easily spend $500 on a Fly reel alone? The graphite roods easily as much, $50 for one Fly-line and you’ll likely need several. Oh, the paraphernalia list was a long walking stick, waders, wader boots, every kind of fly, and leaders. It can be fly fishing incredibly expensive, and Anthony had it all.

Anthony also had a small but very nice boat. That saying about boats being “A hole in the ocean that you throw money into” could not be truer. I could not help but think what if you had just diverted a bit of that loot into investments.

Before you go off on me being judgemental I should tell you Anthony was a great guy, the hours we spent fishing together I will always treasure. It was Anthony who dropped me off at the hospital when I had my spine surgery. Like all of us he had his flaws and I felt for him in his predicament. His struggle reinforced my thinking about preparing for retirement is the ultimate long game.

Most of us can be the masters of our own destiny, it just takes a plan and priorities. You can not be passive, you have to learn to sacrifice, find balance, and make that retirement pile happen. 𝗛𝗼𝘄 𝗜 𝗥𝗲𝗮𝗹𝗹𝘆 𝗟𝗲𝗮𝗿𝗻𝗲𝗱 𝗔𝗯𝗼𝘂𝘁 𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 was from the people around me making mistakes and disasters that emphasized their bad choices.
Memories Of The Deep Water Drifter

Raymond Mills, M.B.A., M.S. has spent over 30 years of his career as a Controller and Investment Bank Technical Auditor.  He now spends his time writing his blog, short stories and running his boutique Microsoft Office software customization business.

You can contact Ray @ by emailing him Here or by using the contact form in the right border.

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