Financial grounding: A question

in thoughts •  5 years ago 

Humans: Some of our behaviours come naturally and some are learned or acquired.

Breathing is one that comes naturally right? Some things we learn early, like breathing, and some later like investing and understanding how money works in relation to the world and ourselves. Some never learn that little gem though do they? [That's rhetorical, no need to answer.]

I visited my dad at the nursing home yesterday and whilst we conversed he isn't really ever with it these days as he has dementia. He often doesn't know who I am and certainly doesn't remember things correctly. Today he was telling me how my mum died from cancer holding his hand in a hospital bed. Now, she certainly did, but he wasn't there at the time, he was with me racing up to the hospital to be with her in her final moments. We didn't make it - A post for another occasion, if ever. He just remembers it through the fog of dementia.

Anyway, his quasi-non compos mentis state means he can't impart his knowledge or wisdom to me, as most fathers will [should]. It's ok though, I'm 49 years-old and know some stuff already so it's all good. Still, today I thought about my upbringing and the examples my parents set, the information and wisdom they imparted and what they may have meant to me moving forward in my own life.

I was raised in a family where there wasn't a lot to go around; We had shoes on our feet and food on the table but life was somewhat, well, basic I guess is the word. Don't get me wrong, it was mostly enjoyable and there's not much I'd change so it's not a sad sob-story by any means. [No pity required or desired.]

Not having much meant things needed to go further and so having some financial-grounding, an understanding of how money worked, was critical and I have to say in that regard I think my parents set good examples, even if they didn't actively set out to do so. I learned by osmosis I guess. My dad was one of the hardest workers I've seen and that rubbed off on me I guess.

As a guy who didn't finish high school, or attend university, my learning has been done in the field. I was out of the parental home at the age of seventeen and a half [living with my girlfriend Faith - Now wife], working a job in a GM auto plant and we learned life on the fly, by accident and by failing. Again, not all bad, but tough at times.

Now I'm in a professional career, in an executive role far up the food chain, my wife runs our business and yep, we are still out there learning and failing when it comes to many aspects of life including financial intelligence. We have some things, go without others and live the best we can.

I don't think I'd do it very differently if I had the chance; Other than a few things...Everything we have, we have earned, and we continue in that fashion still. Reward for effort means more to us than plain old reward - We don't extend our hands for handouts, from anyone. Never have.

So, considering all of that I would have to say we feel reasonably well grounded when it comes to financial matters, and what I don't know my trusted advisors fill in for our consideration and decision. I still learn though fortunately...I've been called many things in life but one of my favourites is sponge as I am exactly that when it comes to knowledge. When I stop learning I'll want to check out. [That means die.]

I asked one of my clients a long time ago, a very rich one, for a financial tip [It was relevant to the conversation at the time.] He said, "spend less than you earn"... That's it. Pretty simple really. Obviously it goes deeper than that in practicality but I've never forgotten what he said and so that's what we do. We took that small amount of information, applied some of our own flair and some trusted-advisor-magic, and are on track; Failing at times still of course, but gaining too.

I wonder...Where has your financial grounding come from, or was there someone who offered a little gem like my client above that you've latched onto and expanded upon?

There's no wrong answers here, I'm just curious as to what has brought you guys to the decisions or ethos you've deployed from a financial or investment perspective. I know none of you were born with an innate ability for financial-intelligence so come on...Where did yours come from and how have you applied the information to your lives?


Tomorrow isn't promised - Design and create your ideal life, don't live it by default
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There are no free lunches. Somebody, somewhere always has to pay.
_ My Dad.

Your dad was smart...As are you.

My Dad said don't get a loan for anything other than a home and then have a decent amount saved. Seems to have worked for me so far. And I had my home paid off in my early 30s👍 No dept ever since then.

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That's a good strategy and one that has worked for you obviously...The sad fact these days is that many will either never buy their own house, or never pay it off.

Yes it can be very expensive to get into home ownership now.☹️

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I think a lot of young people in Australia will never own a home

Yes, I agree.

Plz help me im a new user plz follow me

Hi there @shafiullahz,

Asking me for a follow is not a good way of actually securing a follow. I need to see your work, to determine how you engage with me or others and what sort of things you blog about.

The fact that you used my post about financial grounding to simply ask for a vote doesn't bode well although, I'll take a look at your blog and if I like what I see I'll comment a bit, maybe throw you some votes and see how our relationship develops.

Now...It would go a long way towards a bright future relationship if you would read this post and, if you feel inclined, make some valid comments in reply and lets see where it leads from there huh?

Very likely unless we have a big property bust.

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At the rate things are going I feel like a lot of young people in Australia will never move out :S

Nice write.
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Thank you. I appreciate you taking the time to stop by, read my blog and make a comment. It makes a real difference to my experience here on steem when people do so.

  ·  5 years ago (edited)

Howdy sir galenkp! Did Australia go through hard times when The Great Depression hit us here? Because my grandparents were super penny-pinchers because of going through that and I heard that most of the world was affected when we collapsed.

"spend less than you earn"..yes, a common habit among the wealthy! Y'all have some cool looking currency!

Yes, we had the depression in the 30's also, throughout which my family (mum's side) suffered greatly along with many other families. A global decline of 26% and peak unemployment globally of 25%...Must have been terrible. I believe we are headed for financial stress again, possibly not of that magnitude but similar. We have discussed that before anyway.

Very interesting sir galenkp..I was wondering if our collapse spread to Australia.

The Great Depression was a worldwide thing affecting all of the major centres including Europe, the UK and little old Australia too. We are intrinsically linked to the economies of the major countries of the world and so it affected us. I think we would be much more affected these days also...2009 was a killer for us, as it was everywhere.

Yeah I know it would be that way now but back then I didn't know if we were connected enough but I guess so. Unfortunately! We were probably the major cause, sorry. lol.

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Wealth = Investment/Time

So simple any yet so difficult for many to comprehend seemingly.

Yes, it applies to most things, the wealth of knowledge, relations, skill/experience, wisdom, property, money, etc

As an executive in the property investment industry, and in commercial and residential property generally, I've had a lot of exposure to many who have done it right and wrong over the years...The people or companies who have seen the best results are those who have applied simple techniques, over and over...And have learned from their mistakes.

He said, "spend less than you earn"... That's it.

I have lived by this mantra ever since my mid 20's. I get called "stingy" for it every now and then but i'll tell you what. It works.

I read a book when i was in business school that taught me more than any class I had taken during my 6 years in college. It was called "Investing for Dummies" but those people that made all those "dummies" books.

Two pieces of advice they gave that took no thought, no planning, and no expert financial advice that I followed were this:

  1. Invest in companies that make products you use and believe in. I bought Intel, Texas Instruments (because i was building computers at the time and was astounded by how almost all computers contain TI parts,) Starbucks, and CarMax stocks. This was in the late 90's. These stocks have grown immensely
  2. Invest in no-load index funds for the S&P 500. This is a no brainer because the 500 largest companies in the world, even if a few of them fail, is going to gain in value over time.

I haven't even looked at the values of either of these things in years, but the last time I did check, the magic of compound interest was really encouraging to me. Unless capitalism fails on a global scale, I'm going to be sitting on a pretty good chunk o' cash when I turn 60 something.

Sitting on a "good chunk-o-cash" is something to look forward to for sure.

I like the simplistic nature of your strategy...No bullshit, no smoke and mirrors...Just gold old fashioned logic. Nice work.

The spend less than you earn comment was so off the cuff and at first I was taken aback but within seconds it sort of started sinking in...That was almost 20 years ago...I've been deploying it since then and suggest everyone else does too...But that's a choice we each have to make for ourselves.

Thanks for your awesome comment. I won't say, "bring on 60!" because as good as sitting on chunky cash will be you want to live your life as it rolls out I reckon. :)

well i don't remember exactly how old i have to be to avoid capital gains taxes... by the time I am 60 they will have likely moved it to 80 or something crazy like that :P

Haha, yeah I hear ya! They keep moving the goal posts...And sub-40-year olds think they will have someone to look out for them, a government pension when they get to retirement age. Yeah people, keep dreaming...And spending every cent you have on afterpay/paylater... Idiots.

Dear @galenkp

Everything you comment including what happened to your mom, (Excuse me, receive my condolences). Regarding your father I leave you the best he had, and it was always being with you and having that family home and that's good. I never had a father, but now that I am a father, I will never abandon my daughters.

Your life I see that it has been something that I call it constancy and that is good not to faint and move on that when you say Tomorrow isn't promised, it is a phrase very similar to one that I always use, The future is uncertain.

My financial base just for me has always been a constancy in everything I do, I decided to be a teacher because I always liked to help those who knew less since I was a child, I shared your origin I also had a very basic childhood thanks to the Queen who is my mother she food was not lacking, but my brothers and I always felt that studies were paramount even though I also worked from a very young age, [I don't want to feel sorry for that] but I'm sure I wouldn't change that life for anything world.

I live in Venezuela an economically unstable country especially for university professors since with a communist and delinquent government, they are doing their best to destroy and disappear universities. I continue to teach even though I believe in education, and now my biggest investment is to be within this platform that gives me medium and economic impulses.

Your Friend, Lanzjoseg

It sounds to me that you're on the right path and possess the right attitude to move yourself, and family, forward confidently and with the best life ethos in mind.

Hard work doesn't always provide everything we need, but it provides more than simply waiting for handouts. Sure, many get handouts they may not deserve and it can seem unfair, but working for ones' reward brings a good attitude and outlook which I feel is critical in life...For the future. Attitude is everything.

Thank you for your excellent response and i wish you all the best; It seems like you are making the best from a bad situation over there and are refusing to simply sit and wait for life to collapse around you.Well done.

My dad set me up with a bank account before I turned 10 and us kids were forced to save half of anything we earned once we started our first part-time jobs.
We also tithed 10% of anything we got, which instilled in us an attitude of generosity and the knowledge that our wealth (however small) is a blessing.
My dad also taught us to "never owe anybody anything", except of course, a mortgage. He always demonstrated paying off loans and credit cards within a month (like when our fridge died suddenly and we didn't have the money to replace it same-day). Interestingly, my younger siblings didn't learn this lesson...

My dad was very tight with his money, and as a result, all us kids grew up with a "poverty mentality", when in actual fact, we had everything we needed to survive and we had a great childhood.
It was only when I got married that I realized my "poverty mentality" was actually a hinderance, and there are definite cases where money is there to be spent because we worked hard for it and sometimes we deserve a bit of fun.

So that's my little bit :)
Hopefully someone finds it interesting.

It seems your dad was a very smart fellow and that you followed in his footsteps speaks highly of you too. So many people fail to do anything and that only leads to failure, or lack of opportunity later. Making consistent effort, showing ownership and responsibility, and sometimes going without, is the way to move forward in my opinion. It's not always easy, but it's easier to squirrel something away in small amounts over long periods than to not have reserves of funds later, when the ability to earn them is gone...I take the same ethos in and around knowledge too...Never stop learning.

Thanks for your reply...I think there's a few lessons to come from it and it's a great example of how a little effort can bring greater reward.

I think I learned money matters, investing and such from more than one source. My dad was an accountant so that has some bearing on my financial dealings I am sure.

My parents encouraged me, and even helped, to open an investment account when I was young, and while I don't have that account any longer, it definitely taught me that investing (and saving) are worthwhile.

My grandparents gave me savings bonds for gifts for many years, some still have not matured completely.

It sounds like you've had a solid grounding and have made some good moves based on either instruction or observation. I'm a big fan of gifting something that appreciates in value and with my nephew and niece will gift precious metals which helps in the future and also provides some motivation to buy their own maybe. I see this as a better option than toys, although maybe not as fun. For now it's a mixture of both but as they get older it will lean towards the silver.

Yeah, when I was young, not getting something to play with was kind of a bummer, but I got things from other people so it was fine. And as I got older I got excited to get them knowing they would be worth actual money someday.

Just makes sense to have a little forethought in life I think...Living from hand to mouth isn't my idea of fun.

But I desperately want the shiny thing I just saw right noooowwwwwww and why bother waiting like a chump when with Afterpay et al it can be yours right this instant XD

I pretty much just try to spend less than we earn (not that I'm earning much atm, single income family and my income streams aren't doing anything for us because I hate advertising and promotion that much that I won't even do it for myself XD) and even that's an epic battle because I dyscalculiate a lot x_x so financial shenanigans are J's job and I have a budget app to manage me XD (which was way too long in coming because as per last comment, I'm also unreasonably stubborn x_x lol)

Your dad's memory may be inaccurate but I'd be inclined to let him hang on to that one :S

Sounds to me like you guys have a plan and that's what it's all about I guess. Spending less than you earn is a big step as many just can't seem to do it. Being a little stubborn can mean you're also less inclined to overspend (stubbornness to not over spend is a good thing)

So, if what you're doing works Ry, then it's all good. We could all do better, but those that are doing something are better off than those not.

  ·  5 years ago (edited)

spend less than you earn

Totally agree, simple to read, awfully difficult to execute. However, I always felt there are two parts to that statement: spend and earn

For some reason most of the focus has been on the spend part... meaning save more, be less excessive, be frugal. However, I feel, since it is a balanced equation, we can also focus of the earn part. Just earn more. Some reason most self-help books these days don't focus on that much. Earn more, helps you and your family, you pay more in taxes, therefore helps your society.

Now to "dad's saying"; mine didn't speak much towards the end, had minor case a dementia towards the end, and perhaps for a while. I wasn't with him when he passed away, but this is something he said a lot before:

Money is like sand, more you try to grab it, it tends to go out through the gaps in your fingers. So don't try to grab it.

:)

PS: on a lighter note: Never seen picture of Aussie Dollar before, (which is unreal when I think about it) so colorful! The reason its unreal to me, as I used to trade Aussie Dollar a lot! AUD/JPY , NZD/JPY at one time was one of the most lucrative carry-trade on the planet!

I agree, increasing ones income is a good way of having more however many who do manage that feat also spend it at the same rate negating the benefit. There's many elements that need to come together for a strong and effective financial position.

Yeah, our money is colour-coded because Aussies can't count past 10...Not really. Cool looking money huh?

!BEER
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Well I try to stick to the classic of holding land, precious metals and fiat (including crypto now). But it’s all easier said than maintained today.

On a more upbeat bout your post had me humming this song immediately though mate......

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You're right in saying that it's easier said than done these days however I feel that doing something is always going to trump doing nothing and so my wife and I push on, make the best decisions we can and plan for the future. What else can we do?

Good song. I like me some country music (favourite genre actually.)