January 23, 2013
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Money Matters – Part One
May I just admit up-front that I come from a long line of financially ignorant people? I do. I don’t ANYTHING about saving, investing, compounding… and scarily, I’m quite possibly the most knowledgeable in my clan, having worked in a bank. Still, to be completely honest, I don’t know anything. My mom is a big spender. My brother is better, but different… my sister lives off my mother. There will be no inheritances… if anything, what will be inherited will be debt. The same happened with my grandpa (who my mother insisted claimed he was in the poorhouse but wasn’t… and then turned out that even WITH a pension and SS income, really *was* in the poorhouse). My family will work until they die, and then loose stuff, then live on dog food. Seriously. Because there’s NOTHING there.
Brian’s side is different. They have money, but nobody knows how or why or what happens with it. It’s all very hush-hush. Words like ‘investments’ and ‘stocks’ are murmured behind closed doors, and there’s a lot of prime property… tons of acreage… involved, that’s being sat on and eyed hungrily by the offspring (which, btw, doesn’t include us, so I’m kind of glad not to be in that mess). But people don’t talk about it or know much about it… just that it’s there, and someday will be split seven ways to Sunday and squandered by kids (relatively speaking) that are unemployed, wasteful, or ignorant of sound financial practices. Because nobody teaches anyone in that family how to invest/compound/handle money. In short, it’s hanging off a cliff, and we’re going to get to watch it smash on the rocks sometime in the future. I’m guessing that Brian’s grandpa’s grandpa was the one who had been successful, and invested, and he taught his son, and he taught his son… so grandpa knows how to invest and save and work with the stock market. But he obviously didn’t teach Brian’s dad, and I can promise you Brian’s dad didn’t teach Brian a THING about investing, saving, or preparing for retirement.
I know this, because it’s not something Brian takes care of. It’s not something he knows anything about. And if he had been taught a few things, it would’ve helped us IMMENSELY years ago… but I’m getting a little nervous about it, now. Basically because I don’t have a job, we don’t have a retirement to speak of, Social Security is not viable, and we’re not getting any younger.
One of my goals this year was to read 36 books. That’s three books a month… I’m on book six and it’s the first month, so I’m pretty sure I’m going to blow that goal out of the water. But presently I’m reading a book about with a title something like “How to Retire without Stressing out, Living like a Pauper, or Going Freakin’ Crazy“. I wanted to know what this person had to say about saving money. I wanted to know HOW people do it.
I know our neighbor George did it. Of course he worked at GM for a billion years, got his pension, and is alone next door with twelve acres and an ankle-biter. I don’t get it. I also know that my grandmother and her second husband retired. Of course he also worked at GM for a billion years, got his pension, and his dad left him money, too. Pretty much I’ve come to the conclusion that you only get to retire if you worked for GM.
OTOH, Glenn (grandma’s second husband) did try to talk to me about Roth IRAs and bonds and market shares and other stuff when we were first having babies. I think he did it in Taiwanese, because I remember blinking and not processing a damn word he said. I knew what an IRA, money market, and 401K were, but what they DID, how they worked, what was best? RIGHT the heck over my head. I didn’t get it. The only thing he said that I comprehended was that savings bonds were a good idea in decades past, but these days they don’t make much more than a savings account, and tie up the money inconveniently.
I don’t understand investments. But I do know that I want to do more for my kids. So I’m reading this book… and coming away with some interesting information. I want to write more about it in the next few days, so I hope you will bear with me as I work through being a little overwhelmed and confused…
Comments (7)
My dad drained his pension long ago, and though he collects social security, it’s pretty much a given he will never retire. My sister has her modest 401k that suffered heavy losses during the stock crash. She’d come home and complain about how much she lost, and it’s true she lost a lot… *but* in looking it over, she came out a lot better than some other people.
They’re (the gov) is taking $60 extra a month out of everyone’s paychecks now, to go toward social security because there’s now not enough people working to put in. For taxes now I hear people who use paypal have to be careful how much they’re putting in and out, because it can be seen as tax income. Same now with bank interest.
GM would certainly be a good reason why they managed to retire successfully. It’s not so with alot of other companies.
I worry about that stuff too. But I am taking into consideration how it is mathematically impossible for our economy to not completely implode – it is just a matter of time. (This chick does an excellent job explaining about it – http://www.youtube.com/watch?v=7dFVFJ0iRRA) Anyway, I fully expect there to be super hyper inflation, so whatever money people have saved will become totally worthless anyway.
I’m thinking whoever has things to barter with during that time will probably be the ones who end up rich when we begin to rebuild. (Unless this is the end, in which case I will likely lose my head anyway.) So, maybe the best investments right now are food, ammo, seeds, things people will need to survive when they can’t run out to Walmart and buy it.
Just my thoughts.
By the way, I think you’d be interested in this, if you didn’t already know about it: http://www.govtrack.us/congress/bills/113/hjres15/text
Okay, but in the case that it *doesn’t* implode…is it wise NOT to have put some in to let it acrue? That’s where I’m sitting, right now. Hell, I could be raptured in two hours! Then who cares about inflation! But if I’m not… if there’s no implosion… if things are turned around via some unforseen act on the horizon… I’m just sayin’.
well I have been thinking of the same thing. because I read Ure we moved Brian’s 401K before the stocks totally caved & we lost some but not as much as we could have. if he’d have listened sooner it would have been better. on the subscription side of his site he’s discussing this issue with some links to books he’s checking into. I want to teach my kids better than what we knew when we began married life. Didn’t do too bad with the first 4 but older & wiser means I can see where there’s room for improvement.
That’s too bad about your family and Brian’s not teaching money matters. I would love to know how people do it also. None of my family are savers either. None of us know anything about anything, but I have cobbled together my own way of saving, and it has worked quite well. I’m gonna be 46 years old this year, and outright own two houses, and by the time I am 47 we will totally be out of any kind of debt outside of our house taxes. We save our own way, and I’d let people in on it, but everyone shakes their heads at us because they think we’re out of our minds… but our savings is working for us better than anyone else that we know! We’ve even gotten one of dh’s bosses to start saving like we do a bit…. and he counts his worth in Ferrari’s, as in, ‘I lost two Ferrari’s in the stock market today.’
Can’t wait to read your next few blogs and what you’ve learned.
I think the only way lately to live without too much money stress is to not have kids. The people we know around us who have kids are floating checks and waiting until Tax season to get caught up on very late bills. Credit cards maxed out and collectors calling all the time. Kids are $ it seems.
Our other friends are like us who don’t have kids and complain about the price of fancy bourbon. Ugh! If they ever do have kids it is going to be a HUGE wake up call.
YOU seem to do quite well with the size of your family! It’s impressive.
Growing up my mother told me-DON’T HAVE KIDS if you don’t want them because you will be miserable-and they are expensive. At the same time telling me to go to college, get an education and find a career. (Ha! Art is hardly a money-making career)So I worked and paid my own way to this. It’s okay. I don’t know about the stock market or investing. I do have a small savings at least. We don’t have any real debt. The husband has a good job that gives us really great healthcare and benefits thankfully. When I worked as a secretary for 5yrs I even made a pension. Small but kinda fun I suppose. Teaching doesn’t pay anything or give me anything at all so what I do make in art sales means a lot.
There is one thing growing up that I did know I did not want-and that was to struggle the way my parents did. With 4 kids, a Mother who was a stay at home Mom & my Dad working for the Government (he still does at 77yrs old!) it was hard for them. I have to say I am doing okay. I could be better I guess. I will never be rich but rich means a lot more responsibilities & right now? I am just fine.
Maybe I should read some of those books about investing and saving. Ha!
And yes-about PayPal if you make over $5000 I think? It triggers them to have to report your earnings. I made some spare $ since August and got “That” email. This seasons Taxes are going to be interesting. ;o)
xox
*I would have been a pretty good mom I think.