Yesterday I found myself once again frustrated with a money conversation. My beliefs are very different against main stream money thinking. I began this journey back...well truthfully it's been my life growing up in my family. My grandparents were this way (frugal and debt averse) and though they passed on with about $250,000 in assets not millions, my other frugal grandma was a millionaire unbeknownst to us. So you know they are rock stars with money in my book.
So recently we found ourselves debt free except the house and wanted to know if I should pay off the house or invest the difference after paying my IRA. Well of course a financial planner with a firm is going to tell you to invest, which they did. There was a lot of talk about making more money than I was paying in interest on the house and tax deductions but I'm not sure those financial planners are as wealthy as my grandparents were. So I thought about my grandparents. They lived frugal, had all they needed and both left a legacy that helped their children. So instead of looking to what main stream society tells me I decided to look to my grandparents.
Our decision:
We are paying the house off and investing the max into IRA's for now. All excess goes to the house. I'll continue to max out the IRA's after the house is paid off and either invest in real estate, index funds, or keep money in the bank in high yield checking or savings, probably some of both. I also keep us fully insured with life, home, auto and good health insurance.
Here is what my grandparents did. One passed on a millionaire the other had a paid for house, money in the bank and over $154,000 in stocks, no debt and they had over a quarter of a million in assets.
They had all they needed, wanted and for the most part were normal people who didn't have to worry about money.
Lessons from my Depression Era Grandparents
1. Eat at home
2. Grow your own food when you can or catch it (we ate a lot of fish). I am not a gardener but my husband is. I can cook anything though.
3. Wear it out. If it ain't broke don't replace it.
4. Do without. You don't need half of what you want.
5. Needs first then wants within reason.
6. Keep a tidy house and car it leads to a tidy mind.
7. Don't buy into trends. You don't have to remodel. You can have a nice clean house with furniture that is older. I buy antiques and furniture that is timeless, much like timeless clothing. I have a coat from the 40's that is a simple cashmere mid calf and it has never been out of style. I have Persian rugs that never go out of style. My bedroom furniture is from the 40's and it is still super cool.
8. Buy quality. Research before you buy.
9. Don't do debt. Pay it off. Then don't get back in.
10. It's more about what you don't do than what you do sometimes. Not doing things that cost a lot of money actually saves you tons over buying stuff you don't need on sale.
11. Keep a simple wardrobe or basics and a few fun pieces. Buy when you need something but not simply for an activity.
12. Have simple hobbies like reading, walking, cooking, gardening. Hobbies that help you learn, keep you fit, and actually save money.
13. Send in the rebate, use the coupon if you actually buy that which you have the coupon for. Don't buy crap you don't need because it's on sale or you have a coupon.
14. Say "NO" to enabling others. If they can do it for themselves don't do it for them unless you truly want to gift them from your heart. If you feel resentment then you are enabling.
My grandmother was a millionaire when she passed, She lived in a modest home, drove an older Toyota Highlander, cut her own grass until she was 84, cleaned her own home, cooked her own food. She had a nice home but it wasn't over the top and it was paid for. She truly was the millionaire next door. She didn't have to worry about her food or if she could pay her bills. That is true financial freedom. I'm not saying we should never have fun or spend on life's pleasures but we should consider first that our future is secure so we are not a burden on others.
