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- My mother was a savvy saver: she knew her financial priorities and stayed focused on them.
- Following his example, I have never deprived myself, but I don’t spend money on expensive things either.
- My father taught me to invest. His example helped build a retirement portfolio of $530,000.
The year I turned 12, my mother drove me in our Chevy pickup to the bank in Bethesda, Maryland, where the teller helped me open my first savings account. My mother insisted that she deposit $6, half of what I earned from babysitting and delivering newspapers.
She was a smart saver. Although our family went to the beach every summer, we never went on fancy vacations, because Mom thought college tuition was more important. She even bought dented canned vegetables for half price.
My husband and I have followed my mother’s example.
His example has served me well all my life. Because my husband Barry and I have managed our money carefully, at 70 we now divide our lives between Eureka, the “Victorian seaport” on California’s northern coast, and Guanajuato, a UNESCO World Heritage center in the Central Highlands of Mexico.
Throughout our marriage, we rarely buy new cars or new furniture. Today, we have a 1990 Mazda Miata, which we drive once a week, and a 2003 EuroVan, which we use to explore the beauties of Northern California and Southern Oregon. In Guanajuato we don’t have a car, a great benefit, because in the center, where we live, houses don’t have garages or driveways, and paid parking is expensive. We walked everywhere in the vibrant and colorful streets of the city.
We also do not have a dishwasher or clothes dryer in any of the houses. In Guanajuato, clothes dry quickly on our patio in the warm, sunny air, but even in Eureka, it doesn’t take that long. You just have to be patient.
I admit it, we are not complete minimalists. We can’t be – we have six kayaks, two paddle boards and eight bikes! The bikes are divided between our two houses. As for the kayaks, each one has its history. Another item!
We visit Europe once a year, but rarely pay for international tickets. By applying for a credit card with 50,000 or 60,000 bonus airline miles every two years, we accumulate our miles. We order a new card only when we know we can squeeze a lot of spending into a short period of time, because you have to spend $3,000 to $4,000 in the first few months, which is much more than we normally spend.
A friend recently described us as “frugal,” but I disagree, because we don’t deprive ourselves. I don’t think self-deprivation works in the long run: it’s like dieting: too much deprivation can lead to overindulgence.
My dad taught me to invest for the long term.
My dad, for his part, was not only a saver, but also an investor. During my childhood, I would listen to him talk about stocks with my mother.
In my early 30s, when Barry and I lived in Bellingham, Washington, a cheap hippie town at the time, Dad encouraged me to open an IRA since I was his only daughter who was self-employed and had no pension. . I wasn’t making much at the time, but I took his advice and opened an IRA with $50. Barry followed suit, and a year later, we each opened a SEP IRA. Our accountant advised us to max out both accounts each year to reduce our annual taxes, so we did, and today, 40 years later, my two IRAs together are worth over $530,000.
I made some stupid decisions, of course, like impulsively following Barry’s idea in the 1980s to buy futures. Never more! I lost $1,500 that way.
But other decisions were smart. When we moved from Bellingham to comfortable Palo Alto in 1987, I was terrified that our rent jumped from $265 to $1,200 a month, and went up to $1,400 a year later. But I was forced to earn a lot of money for the first time in my life, and that was good for my future. After networking for six months, I landed a continuing job with Apple, which led to other contracts, and I led trainings for companies like Hewlett-Packard and AT&T.
Seven years later, during a brief market dip, we managed to raise enough money to buy a house for a friend of a friend, avoiding real estate fees. We work hard to pay for the house.
In 2004, we left Palo Alto and sold the house. After giving some money to our daughters, we invested about a third of our earnings in a bond, which has earned us about $1,000 to $1,200 a month ever since. At most, before the 2008 crash, we were making $2,000 a month. It comes out at an average yield of about 5 to 7%.
And instead of paying someone to manage our stocks, we’ve invested in index funds. We discovered that no one has a “market in the market” so to speak.
Between stocks, bonds, our IRAs, Social Security, and our part-time earnings, we’re financially comfortable. By following my parents’ lead—investing carefully and not spending our money on big-ticket items like trips to Hawaii or new cars—we can afford the rich, diverse, bicultural life we now enjoy.
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