This a question that I have been asking myself since I was a teenager many, many, many, many decades ago. I am still searching out those answers on many things. But some of them I think we have figured out over the years. At least we have figured out what was best for us and our children. What was best for us is not the way everyone should do things. You have to figure out what is best for you and your family. But without a lot of watching, reading, and learning, we would not have gotten to where we are today.
The biggest example I can give you is how we handled our money. How did we get from just married with a car loan and no savings to financially independent? In order to answer that question, I have to take you back to my childhood.
I was raised in a working class household by my grandparents and my mother. We had plenty to eat and my grandparents owned their home( built by one of their parents and they paid cash). They rented out the first floor of our home to relatives and collected rent and they also took most of my mother's wages to care for the three of us. I was a very inquisitive child who was always watching, reading, and learning. I watched what my mother and grandparents did and I learned a lot from them. I loved going to the library and taking home books to read. I loved mysteries like Nancy Drew. But as I read an article in a newspaper or magazine about money, I realized that I could search out books on those topics at the library. So I started to get more and more non fiction books on how and why people saved money. This was back in the 1960's when there wasn't a lot of them out there. I remember one of the first ones I read was about Hetty Green. Yes, she was stingy and they called her the Witch of Wall Street but the money she accumulated in her lifetime fascinated me. She was the first person I read about who taught me that frugality could work. I wouldn't do some of the things that she did. I did not want to be stingy or a miserable person but I did want to accumulate money when I grew up. That I knew.
My grandparents having gone through the depression did not trust banks. My grandmother tucked money away everywhere: in her every day purse, in her other purses, in her hat boxes,and yes even under her mattress. The stark difference between Hetty and them was that they earned no money on their money while Hetty was always earning money on hers in the banks, through the stock market, through lending, via real estate, etc. She put her money to work for her. Lesson #1 was learned: Put your money to work for you.
Since my grandparents took most of my mother's wages, my mother got the things she wanted via credit cards. My mom kept her credit card statements in a drawer in a dresser in the room that my sister and I slept in. I remember looking at them and seeing all of the interest she paid just to borrow money and how many years she was in debt because of them. Lesson #2 was learned: Don't use credit cards and pay interest for their use.
Hence, I needed to model people who had money. To do that I needed to learn everything I could about saving and investing. I read every book I could get by hands on from those about Hetty Green to Warren Buffett. To accumulate money, you have to model what rich people do and learn their habits. The one habit that still sticks out to me to this day is their frugality. Both Green and Buffett lived simply and frugally even though they amassed huge fortunes.
Being aware of all of these things in my teen years and then deciding to take finance and accounting in college were all a big part of how I looked at money.
So when I met Hubby, who I fell in love with at first site at the ripe old age of 17, and he had some of the same ideas about how to handle money as I did, we got married at 19 and started on our journey to live a good but frugal life. We haven't accumulated the kind of money that Hetty Green did but we have done well for our family and most importantly we were able to become financially independent before the age of 55 when most people don't retire until 65. We are in our 16th year of retirement and loving every minute of it. We feel like when we were children and we could do whatever we wanted when we went out to play. It's fun! We set our goals went we got married and we have reached them. We still set goals every single year and we usually reach them even though we are retired. To us it is a fun game (a competition) that we continue to play!
I was planning on this being just one post but I have so much more to say. So I will continue this tomorrow and show you how we accumulated our money. Till then...........