Why I’m Not a Financial Moron

Why I’m Not a Financial Moron

It’s a miracle that I’m not a financial moron.  No one taught me about finances.  I never took a course in college.  In fact, a few years ago before I found the FIRE community, I was pretty clueless.  Well, not exactly.  I made reasonable financial decisions.  Heck, even good decisions.  I didn’t, however, have the vocabulary or knowledge behind what I was doing.  So was I lucky? Did I merely happen to stumble on the right path?

I Have One Great Advantage

I am my parent’s son, and they did not bring up a financial moron.

And my parents are fairly financially savvy.  Sure, they didn’t sit me down and explain the economic ins and outs (which I totally blame them for).  But they did something more important.  They lived them.  My mother and stepfather were a living, breathing encyclopedia of financial knowledge.

More than words, I absorbed their actions.  I watched as they negotiated running a household filled with five bustling children, two grown adults, and all sorts of responsibilities.  Their rules have become ingrained in my psyche.  They paved the way with good habits, frugality, and an appetite for risk taking.

They Made Lots of Money

My parents were both innovators.  They obtained graduate degrees and then turned their academic knowledge into real-life, well paid employment.  My mother left business school and was hired into a Big Ten accounting firm.  She eventually became a partner in her own practice.  Not a financial moron.

Often she tried to slow down only to be  hampered by her clients throwing higher and higher fees to convince her to stick around.

My stepfather was founder and CEO of a highly successful healthcare care company that eventually incorporated many hospitals across the United States.  Although it started with only him, it now employs thousands,  and still has a major impact today.

When he stepped down from his CEO role to make room for others, he  built a rich and varied consulting career that continues to sustain him today.

Although money was never their goal, they knew how to optimize their careers.  They knew how to take well-timed risks, and how to fail without losing confidence or resources.

Watching them was a masterclass.  It was better than any business school.  Better than any course work.

They Saved Much More Than They Spent

We lived very comfortable lives.  We lacked for nothing.  But the goal was never material possessions.  There were no frivolous purchases.

Sure my step dad bought a brand new BMW.  But then he drove that baby into the ground over the next 20 years until it had over two hundred thousand miles on it.  We had a nice house, but it was paid in full.  We owned multiple properties, but they were investments.

I’m pretty sure that my parents saved at least fifty percent of their income for most of their careers.  They didn’t tell me that their goal was financial independence.  They didn’t explain to me the principle of stealth wealth.  Week after week, year after year, the money piled up, out of sight and out of my mind.  They were building an empire.  An empire that I didn’t even know existed.

Looking back, when my parents did spend money, they spent on experiences.  We took great trips.  They brought the grandparents along, and cousins, and aunts.

I can’t remember a single thing I purchased throughout childhood.  But I sure do remember those trips.

They Invested, They Ran Side Hustles

My parents had money in the market.  At the time, I didn’t know the details.  Did they buy stocks? Bonds? Mutual funds?  I once remember finding a dozen bars of silver in the garage.  The specifics were not as important as the idea.  One invests in the market with extra cash.  It’s what one does.

My parents owned and rented real estate.  Their were ten to fifteen properties.  Every month the rent checks would come in the mail.  Or they wouldn’t, and someone would be on the phone with the lawyer.  Weekends often included a trip to one property or another to repair a sink or pave a drive way.

I remember my mom huddled over the spreadsheets at tax time calculating the profits for each property.

My step dad not only started and ran his own healthcare company, he also owned a coin dealership that he ran out of the house.  He bought and sold coins through magazine adds.  He even had employees.  While not the bank busting business, it taught me a love for the small venture.  The thrill of the sale.

They Taught Me That Nothing Was For Free

My parents supported me.  They provided for my needs.  But it was expected that I would take care of myself.  All of us children held jobs throughout our younger years.  None of us received allowances by the time we were old enough to work.

I worked in a local ice cream shop.  Then a Subway.  Then a molecular biology lab.

I had a few thousand dollars saved by the time I left for college.  My money.  Money that I earned.

Pay It forward

I am not a financial moron because of my parents.  It is one of the many legacies they have left me.  As I raise my own children,  I attempt to be as thoughtful as they were.  I attempt to give my children the gifts of optimization, frugality,  hustle, and side hustle.

The only difference is that unlike my parents, I plan to also supply the vocabulary and theory to accompany their observations.