Did you ever have a financial role model growing up? I did not. I had “learn-from-my-mistakes” role models, in that I decided I never wanted to live in the way that I grew up and made a voracious effort to work my ass off and live frugally in order for that to never happen. Some days Chris asks me if I am still on that road and if I will ever slow down and realize I can chill a bit.
It is an interesting conversation (well maybe to me). Who impacted how you view money? Did you ever have a financial role model? Did you grow up watching Suze Orman on TV telling you when you might be DENIED? Were you given everything, and never taught that money does not grow on trees, and that there are consequences to racking up a crazy amount of credit card debt in the tune of never freeing yourself from the monthly payments? Or, did you learn how to know about your net worth, an emergency fund, and the importance of your credit score? Additionally, that your credit score can also be a causing factor in getting a job or not?
Money and finances are a reoccurring blog topic for me. Somehow over time money and sex seem to be taboo topics. No one really wants to talk about either. And, yet “Fifty Shades of Grey” became a mainstream movie (not without some backlash) what will be the movie about money that potentially starts the conversation amongst us? Somehow I think that movie will not be of much interest to the masses. Yet, how do we actually shift the world to start taking care of itself?
This recent Daily Worth article shares one woman’s experience and what she learned from her dad, or…like me what she learned not to do. Her dad is now retired and has to live on a fixed income. The potential for many who do not plan accordingly for the future, save, and approach retirement in a way that allows you to really “retire.” Chris and I look at today and what we save as a way to prepare for our future. For a time when we hope to have been savvy enough to find a point in time when we can make the choice for ourselves rather than be forced to work past relevancy. That way we can pamper our family and truly enjoy life.
We all have to start somewhere, but somehow I think many just never start. Or maybe it starts with who our financial role models are and what they teach us about today, tomorrow, and the future.
It has been a while since I have read a book that I could not put down — until this past weekend. I read a book titled: “After Perfect: A Daughter’s Memoir” by Christina McDowell. It is about the Prousalis family and their demise. Think Bernie Madoff. Think scandal. Think fraud. At first when I started to read it I thought this is going to be an annoying book. It will be all about the 1% that had it all and so much more and lost it due to lies and deceit. And it is, but also about so much more.
The book is told by Christina, Tom Prousalis’s daughter. It is her story. It is how she learns about her father and his crimes. He goes to prison for three years after taking a plea deal. They lose everything and she and her sisters and mother must learn how to live. Her mother has never had to pay a bill and Christina realizes that her mother has been taken care of for so long that she does not even know where to begin to pick up the pieces of her life that is now in shambles.
It gets worse. Christina finds out that before heading to prison, her father had taken out multiple credit cards in her name and racked up debt to the tune of $100,000. She believes that he will fix her credit and pay off her debt. He makes her believe on the infrequent calls and letters from prison that he will take care of her. It takes her years to learn who her dad really is, and to truly understand the lies, and deceit, until eventually he literally vanishes from her life.
You might look at her story and think she is a child that had it all. She lived in such extreme wealth, she had things most others did not. Yet, in a lot of ways she was just the victim all along. She did not know about her father, the kind of man he truly was, she knew only what she knew. Her 20’s turned into a period of abuse. She lost the footing of who she was and turned to drugs, alcohol, and sex. Until she had enough. She came clean and searched for the truth. As painful as it was to find. She changed her name, and set up a new identity, free from the past, free from her father.
“After Perfect” was a page turner. It makes you see into the world of the 1%, and those that fall from that world. How they deal with it, how they do not, and in the end they are people just like the rest of us. If you are looking for a book to read (especially a memoir) I highly recommend it.
Frustrated. I work in a job that is one of service to others. I highly respect those companies and individuals that believe in service, and I get highly disappointed by those that do not honor service. I was raised in a way that living by principle matters. I take a strong stand for that principle. That means I might have a harder time letting a situation go if I feel that someone is taken advantage of or being mistreated.
My situation: I purchased a pair of eyeglasses at the outlet location of a local eyeglass store: Reynolds Optical. It is a great deal, a pair of frames and lenses for $150. Due to my crazy blind prescription, I always have to pay $100 to make the lens thinner. $250 is still a great deal. I think they can give these prices because the frames themselves are floor models from other locations. Fine with me – they can be cleaned, and I always check them for nicks or scratches. I was to receive them in two weeks. Two weeks go by and no phone call that they have arrived. We call, and find out they are there waiting. We pick them up and bring them home. The lenses are massive. I have never purchased a pair with such thick lenses.
I immediately think that they did not make them extra thin, and I paid an extra $100 for that. We take them back an hour later, and the guy says oh, I will send them back and they can put new lenses in. We later find out he is the owner’s kid. The guy agreed with us that they should be thinner. We wait 2 weeks, again no phone calls, we finally learn after multiple phone calls that the glasses are waiting. Bring them home and compare and again they look the same as the first round.
Chris takes them back and meets the owner. He tells Chris that the frames that were selected are not good for my prescription and they should never have been sent back. Chris lets him know that the guy never told us that, and that he is the one suggested that we send them back to be fixed. The owner says we do not do refunds, but I want your wife to be happy, and to have me come back in a pick new frames. We do. Same guy is working and he says yes I think that those frames will work. This time it should only take a week to fix. I receive a phone call a few days later that they are almost done and I owe them money. I lose it on the phone with her, telling her what a horrible experience it has been and I am not paying more money. If more money was needed it should have been agreed upon before work was ever done. I immediately call Chris and he calls the owner.
Owner and Chris get into yelling match on the phone. This is odd. Chris is patient, composed, and never yells. Does that tell you what a horrible man the owner is? Owner does not give in and unless I pay more money I will not have any pair of glasses at all. I am beyond angry. Remember, I am all about principle. How are these people even allowed to still be in business? We decide to pay the extra money and pick up the glasses knowing that we can be done with the situation, never go back there again, and share our experience online to protect others from being duped. Maybe the experience has tainted my brain, but I actually think the prescription in this new pair is not right. I’m wearing old glasses again until I can have my normal eye doctor look at them.
I then decide to read reviews on Reynolds online. There are quite a few of them. Merchant Circle, and City Search for a start. Here’s a recap and reasons why this was horrible service in more ways than one — plus I still do not know if I can wear the glasses:
Poor or lack of returned phone calls through the entire ordeal.
No service or help in the glasses selection process.
Clueless about how lenses should show up in frames. Son should never work in optical shop.
Owner gets involved, lies.
Owner yells at customer, demands more money after work was done.
Money is on the brain this week. It is official — the early bird does get the worm. I recently came across a Dave Ramsey money article that especially peaked my interest. It basically is the simple truth about money that almost all of us probably know. Yet, the visual he shared just hits you smack in the face.
I do not want to steal the visual from his website, so I will explain and link back to his site for the full picture. Meet Ben and Arthur. Ben starts investing at age 19 and puts $2000 in an account each year for 8 years straight and then does absolutely nothing with the account until he retires at the age of 65. A total investment from the ages of 19-26 of $16,000. A lot of money to put away in those early years of his life. Arthur begins investing $2000 when he is 27 years old and continues to put $2000 away from 27 to when he retires at age 65. Arthur invests a total of $78,000 over 39 years. A difference in $62,000 in the amount that was actually put away between Ben and Arthur.
The result: at age 65 Ben has $2,288,996 and Arthur has $1,532,166. Ben came out $700,000 ahead by starting 8 years earlier and only put away $16,000. Compounding interest is an amazing thing. How do we spread the word? I do not know many 19 year olds that a) care about investing, b) truly understand compounding interest, c) have $2000 a year they can or want to spare.
Why not have a prerequisite that you have to complete a personal finance class to make it out of freshman year of college (no matter what your major). Or maybe it is a class that every high school graduate must take (since many might never go to college). The class could teach many types of life skills, and maybe those that truly understand it might actually decide not to purchase that video game they are dying to have and rather put a bit more into their retirement.
To think that all it took was $16,000 for 8 years, rather than $78,000 for 39 years. If I only knew when I was 19 what I know now, I might have made very different choices, especially thinking of that $700,000 difference at age 65. How do we make compounding interest sexy?
How did you learn about money? Did you learn in college when a credit card company sold you on all the benefits, and then you maxed it out not really knowing the repercussions? Did your parents teach you? Did you learn in school?
We can only truly take ownership of our money when it truly belongs to us. I remember when I was nine years old I had a paper route. I would usually keep some of my earnings and would give some to my parents to put into my savings account. My tips usually were my “candy fund” where I would ride my bike on a path that had been worn by the neighborhood kids to the Village Pantry. There I would select something or many things depending on how much money was in my pocket. There was rarely candy in our house, and occasionally we had some at my grandma’s house. So for me, candy was a treat. It was something special.
I truly believed the money I made on my paper route was my money. I worked hard for it. It was my choice to buy the candy. It was not my choice to never receive my money that I was told was put into savings. I have no idea now how much money I never saw. I trusted my parents to put it in my account, never knowing that was not happening. Which is why I loved reading the book: “The First National Bank of Dad: The Best Way to Teach Kids About Money” by David Owen. He talks about how he teaches his children about money. He sets up his own bank and a version of the stock market from his house. One idea he shared was about how kids have to know that the money belongs to them. If they know that, they will make different choices about money.
“My children’s accounts belonged to them alone. When they saved, they reaped the benefit; when they wanted to spend, they didn’t need permission. If my son decided to withdraw twenty dollars, I didn’t ask him why he needed the money—just as my bank doesn’t ask me. What he did with the cash was his business, as long as his balance was sufficient to cover his withdrawal. Why do kids need to control money of their own? Because if the money they spend money of their own? Because if the money they spend isn’t truly theirs, they have no compelling reason to pay attention to how they spend it.” Page 41
An interesting idea. I do remember having a savings account ledger and looking at it from time to time. I was more of a saver. I liked watching it grow and knowing I was working hard as the money accumulated. With the exception of my Village Pantry runs, I really did not spend that much of my money. Although I will never know how much never made it to The First National Bank of Tami. Alas. Live and learn. I will be teaching my kid(s) to take ownership of their money, and to know how to track what they take out and what they are earning. And, no, I will not steal a penny from them. If you have kids, I definitely recommend reading Owen’s book.