A Life and Financial Lesson from My 101 Year Old Grandpa
Two years ago my Grandpa Jim celebrated his 100th birthday. To honor this momentous day, my family and I took a trip to see him down to Southern California where he still lives today. The lawn bowling club, where he has been a member of for 40 years, held a big party and the city of Los Angeles presented him with a special certificate honoring his day.
During our trip, I sat down with my Grandpa and asked what advice he could give to others to live a long, happy life— just as he has. I recorded his answer on my iPhone so that I wouldn’t forget his response. As I prepared to ask him questions, I was hoping to hear answers that included such phrases and do what makes you happy, travel the world and other feel good quips that scroll through my Facebook newsfeed daily.
To my disappointment, he did not offer up profound secrets including advice on wandering the world to find happiness. He doesn’t waste words in his old age and his answer was brief and to the point—”Money.” Money, he claimed, was the reason he has lived a long, happy life. I was taken aback by his answer as it was completely unexpected and seemed out of character. I attributed it to what I assumed was him being overwhelmed with all of the attention of the last few days so I stopped recording.
After our trip I spent time mulling over how my Grandpa chose to answer my question and realized that he took it in the literal sense and answered it so. By the time my Grandpa turned 25 years old, the country had been in the Great Depression for ten years. He came of age in an era when our country was at its lowest point. Growing up in a poor, Irish Catholic family in Chicago, he saw firsthand how hard life can be when you have to live without. The impression that this era left on my Grandpa and the millions of other Americans who were alive during that time is firmly imbedded into their memories and their actions still reflect it today. Eighty years ago the average American had very little money and suffered greatly as a result, so Grandpa’s response really should not have been a surprise to me.
After some contemplation, I softened to his response and accepted while it may not have been the most poetic of answers, I believe it came from his heart. Certainly you can point to a myriad of other things have also contributed to my Grandpa’s successful aging such as good genetics, and you would be right; but money buys food, clothing, shelter, healthcare—core expenses—as well as a lawn bowling membership—joy expenses—all of which have contributed to my Grandpa’s overall wellbeing in retirement. My intention is certainly not to advocate that money buys happiness.
Happiness comes from within. Rather my intention is to bring to light the importance of saving and planning for retirement to ensure core and joy expenses are covered so that your golden years are actually golden. For millennials this is even more important as we are the first generation that may enter retirement without Social Security or company pension plans to fall back on.
In 2008, a large number of us were just about to graduate college or were relatively new into the professional workforce when the country slid into a recession. We experienced how quickly the economy can change. This left us to pick up what little pieces we had to our budding careers to start over, or go back to school for advanced degrees. This major economic downturn brought to light two very important financial lessons that I learned from my Grandpa that I believe are prudent to share with other millennials:
1. Live below your means. This can be achieved through a number of different avenues, but being a financial planner, one that I emphasize to my peers is don’t live on 100 percent of your paycheck. By this I mean take at least five to ten percent of your paycheck each month and contribute it to your 401(k) or IRA. What matters more is when you choose to begin investing versus how much you invest each month. The longer your funds are in the stock market earning compound interest the higher your account values will be at retirement. If your employer does not offer a retirement plan, find a financial advisor you are comfortable with or visit your bank to open an IRA (Individual Retirement Account) or Roth IRA and start saving for retirement today.
2. Be smart about the debt you incur. While the ultimate goal is to get out of debt, millennials are at an age when accumulating it is a fact of life, but if done so wisely can be a value in the long run. Incurring debt to fund an education, buy a home, start a business, etc. are long term investments with increasing value over time and will likely be a benefit in the long run. Incurring debt for purchases such as a brand new car or credit card purchases can be a slippery slope and rarely have long term economic value. Spend wisely when the shopping involves utilizing debt.
Fortunately, because of the recession, the behavior of my generation has shifted and even more so than our parents’ generation, we understand the importance of saving and planning. Last year, a study released by UBS found that millennials are actually the most fiscally conservative generation since the Great Depression. Knowing this, I believe we are capable of true financial independence in retirement as long as it starts now while we are young.
If someone would have told my Grandpa when he was my age that he would still be alive and kicking at 101 years old he may have laughed out loud. Nevertheless, because he experienced the Great Depression he knew the importance of saving and living below his means to stretch his money far into retirement. The Great Recession taught so many of us valuable lessons including the importance of planning and saving and I believe if we take the lesson to heart, we too are capable of a long, happy retirement.
Brenna Hasty is a Retirement Investment Counselor and Director of Operations at Rosell Wealth Management in Bend. www.RosellWealthManagement.com
Investment advisory services offered through Rosell Wealth Management, a State Registered Investment Advisor. Securities offered through ValMark Securities, Inc. Member FINRA, SIPC 130 Springside Drive, Ste 300 Akron, Ohio 44333-2431. 800 765-5201. Rosell Wealth Management is a separate entity from ValMark Securities.