How my Parents went from Poverty to Wealth and Taught me Life Lessons for Financial Independence
My dad was born into terrible poverty. His father was an unemployed factory worker for 6-7 years during the depression and his mom sold odds and ends on the street. When his dad worked, he never earned very much. My mom was not wealthy, but born into a family that knew they had to be very careful with money, or they would end up poor. When my parents met and married, they both had a commitment to hard work and saving money.
My dad managed to earn money in college by selling sandwiches with 2 partners to the other students in the dorms at night. One of his partners had the car, and the other had a wife who made the sandwiches. He was poor, but very ambitious.
When Dad learned that his university was selling some old pianos at a discount, he decided to buy them all. Next, he sold each one individually at a profit. The university administration confronted him, angry that he resold the pianos at a profit. Dad replied, “You could have done the same thing. Everything I did was legal!” After that, they left him alone.
The take away from this story and one that replays over and over is this: Look for opportunities to increase your income.
In sum, both mom and dad, believed in working hard and saving money!
Flash forward many years, their habits and strategies led to an accumulation of wealth. As one would expect, their were ups and downs along the way. But their calculated risk-taking and unrelenting persistence led to success.
My own financial acumen is based on their early lessons.
But, I didn’t stop with the lessons I learned from my parents, I went out and worked in a variety of areas, had some successes and failures of my own, and further grew my financial knowledge through a bachelors degree in Economics and a Master of Business degree in finance.
When Income Goes Up and Down
My dad made a lot of money reselling those pianos. When he got that money, he immediately put a good chunk of it in the bank. Part of it went into savings to be used in the future and the rest went into his living expenses.
He adjusted his spending to his available cash; and did not spend money he didn’t have.
From the time he was a small boy, saving was an automatic habit! Poverty gave him an indelible life lesson. Dad knew he needed money to help with his present and future expenses, and that if he spent it all on something frivolous, he would regret it.
Wealth Building Habits
When I was a kid, I got an allowance. I was expected to put part of that money in the bank. (And of course give some to charity as well). When I got some money for a gift, part of that money went in the bank.
I grew up believing that saving was a normal byproduct of getting cash.
I didn’t realize there was any other way!
The thought of spending all my money was not an option. Sure, I spent some of the money I got, but not all of it. Actually, I enjoyed and do to this day enjoy the power and control of seeing my savings grow. It’s actually more fun than blowing all my money on something I won’t remember or appreciate in a day, or a week, or a month.
Saving-The Wealth Building Secret
Saving is the cornerstone of all wealth building.
It’s preferable to start saving earlier, rather than later. But even if you start later in life, there are great benefits.
There’s a psychological decision that you may want to consider.
We each have a certain lifespan. And during part of that time, we’re working. If we choose to spend all of our earnings as we go along, the last quarter of our lives, when we’re probably not working full time, we won’t have much money.
If we choose to save a bit while we’re working for the final part of our life, we can smooth our our income so that we can spend a comparable amount of money throughout our lives.
If you make that decision, to save for later, you automatically give yourself an opportunity for greater financial freedom.
Wealth begins with saving. After saving comes investing.
No matter what financial stage you are in, you can decide the direction of your future.
Whenever you get any money; paycheck, gift, gambling winning, lottery winning, even cash you picked up from the ground, put part of it in a savings account. Don’t think, just do it!
Make saving a habit.