When you are young, it is easy to miss powerful examples of how to live a life of financial freedom. Especially when the example is your grandparents. They are old. What do they know?
Turns out, my maternal grandparents knew a lot. They could have been the primary example in the book The Millionaire Next Door. They were 80 years ahead of Mr. Money Mustache. They were the epitome of Warren Buffett’s long, slow growth strategy. Like the Oracle of Omaha, they too loved reading, playing bridge and scrabble while their investments grew.
Did I pick up what they were putting down? Of course not. I was busy being a moron and clueless to their powerful example of how to be wealthy. To be financially free. I was self-centered to the extreme (still can be to be honest) living for instant gratification. I had a sense they lived in a non-conventional way but left it at that. It was not until they passed that I realized they choose financial freedom above all else. No keeping up with the Jones’ for them!
Nana & Papa were my mom’s and her identical sister’s mother and step-father. A mouthful, I know. But I can also bend your mind that my mom and her identical sister married by dad and his brother at a double wedding. My grandfather, a Commander in the Navy, died when the twins were four years old. As far as I am concerned, Papa was my grandfather. There was no “step”. He was also the only example of a grandfather I knew as my dad’s father died when I was around five so I never knew him. Papa was incredibly kind, generous and loving. Always ready to give you a buck or two or a donut so how could you not love him?
Nana was insanely smart but was not, shall we say, as warm as Papa. She was blunt. Blunt like a sledgehammer across your forehead. One thing is for sure, you always knew how she felt about you. I hated it when I was younger but now, I wish more people were like her. Refreshing. Perhaps it was the financial freedom she had so she could care less. Kinda like Prof G.
Visiting them was a mixed bag of emotions. You immediately started choking on Lark cigarette smoke generated from their chain smoking. They classed them up by inhaling them through fancy long stem filters. But through that toxic cloud were bowls of candy or some kid friendly snack. Plus, you had a 99.9% chance Papa was waiting with a dollar for your greedy hand. Better yet, if his beloved Orioles were winning, a fiver or even a ten spot. Big money to a little kid back then! This was all done in a clandestine way to avoid Nana’s disapproving glare.
That is the thing. They always seemed to have money. Now I understand that that they were rich, financially secure and free. Rich not just in terms of cold hard cash but in all the meaningful ways. Family. Friends. Spiritually.
But how?! Nana was a social worker. Incredibly rewarding but not a prosperous line of work. Papa was a medical doctor for the Mobil Oil Company. He was also a professor at Georgetown and UCAL medical schools. As a side note, he was also a talented musician, author and artist. That alone points out that I was not a blood relative as I am none of those things.
Their house was a modest home in the Summit Ridge area of Bethesda, Maryland. I think they still used the furniture they inherited from their parents. It was old!
But here’s the thing. They lived WAY below their means. They invested in stocks and never sold them. Nana inherited a few properties around Washington, D.C. that skyrocketed in value. She eventually sold them but kicked herself for the rest of her life for not holding onto them.
Car of choice? The Chevy Nova. And yes, just one car. No need for two cars when one will get you where you need. It sat in the garage for 95% of the week anyway. When it was time to buy a new one which was not often, Nana would head to the same dealership. With check book in hand, she would offer what she thought was a fair deal. A cash offer. No car loan. Take it or leave it she would say. She wasted no time searching for a bargain. Time was too valuable for that nonsense. Fair deal for freedom. Easy choice. Oh, the dealer was smart (or scared!) and always agreed to what she wanted.
How’d they fund this lifestyle? Mailbox money on the daily!! Seriously, every day the mail brought a new dividend check, rent check or source of passive income. All generated while they slept. The mailbox was a real live money tree.
After counting the daily cash-flow, cocktail hour came along which led to a nice home cooked meal. Papa was Italian so, you know. The only meal out was Nana’s long standing lunch date with her dear friends at Martin’s Tavern in Georgetown. No need for frivolous expenses.
They rented a house in Bethany Beach, Delaware every summer for 2-4 weeks (why buy when you can rent with zero hassel of ownership of a summer home?). We were all invited to spend a week or two with them. Open door for family. Always. Rich.
They took an exotic cruise on a first class ship every year. All paid for in cash. Cash from passive income.
They were the true definition of financial freedom.
They lived the life that I strive for now, a life of pure freedom.
Oh, if only I was not such a moron back then. Yes, a kid but a kid who grew up continuing to witness their lifestyle that eluded me.
Moron Lesson: Keep your eyes open and learn from those who have what you want.
Don’t be a moron!
1. Pay close attention to those who have what you want and do what they do
2. Live below your means (spend less than you make)
3. Invest and hold for long term (remember, power of compounding)
a. Simple low cost index funds work just fine by the way
4. Create passive income to pay for your expenses and provide the life you want. This number is usually smaller than you think.
Remember, compounding is not just for money. Minor positive actions can lead to massive improvements over time.
Enjoy the journey!
The Millionaire Moron
Recommendations:
The Algebra of Wealth by Scott Galloway
The Millionaire Moron 