Responsibility First

To continue my series about people near (or in) retirement and their experiences with money; I interviewed ReggieMama- a self-employed mother of two grown boys.

Before she was ever a mother or an entrepreneur, she was a young nun teaching in New England. She made a bold move in her twenties to leave most of her family (and the convent) and moved to California with only $50 in her pocket. While she has been bold with her major life choices, none of them were influenced by greed. She emphasizes that personal responsibility coupled with a desire to care for her family has been the driving forces that have set her up for a comfortable retirement in the upcoming years.

SCS: When you were 26-years-old how did you view money?
ReggieMama: I didn’t give money much thought. I had enough for rent and other basics. At the time I was teaching and making next to no money, but I loved what I was doing so I was happy. I wouldn’t have turned down a lot of money, but I would never have based my profession on it.

SCS: When you were 26-years-old how did you view wealth?
ReggieMama: I never thought about wealth.

SCS: How do you think of money now?
ReggieMama: I think of money now as a colossal pain in the ass.

Oddly enough I’ve always earned a lot of money over the course of my career (I didn’t stay in teaching), but I think the reason is because I’ve enjoyed so many aspects of my work.

Raising a family forces a person to plan, save, invest, and worry about money. However, it has never meant more to me than providing for my family and it still doesn’t. As I near retirement age, it annoys me that I have to think about it even more, but it’s part of life, and we’ve never wanted to stick our kids with taking care of us or have them worried about us in our old age.

SCS: How do you think of wealth now?
ReggieMama: Real wealth has nothing to do with money. The pursuit of monetary wealth in this country has caused too many people to sacrifice their principles at the expense of others and it’s contributed to the financial mess we’re in now.

SCS: What events in your life shaped your current beliefs about personal finances?
ReggieMama: The families we grow up in play a part in shaping our beliefs about money, and I saw a lot of goofy things growing up that helped me recognize what’s important and what isn’t.

Taking care of others has always been important to me and that is only possible if we are taking responsibility for ourselves first.

Never Going to Retire

For a man who never thought about money, it was confidence that built him monetary and emotional wealth. This is just how it is for Murphy*, who works out of his home in a small-business that he owns with his wife. When he’s not in his office, you’ll likely find him on a golf course with friends or entertaining his family. For him personal finances are not something to worry about, rather money is just the means of gaining true wealth- doing the things he loves most and being with those who he loves most. To continue my series interveiwing people in (or very near) retirement and their views on money I asked the following:

SCS: When you were 26-years-old how did you view money?
Murphy: You expect me to remember what I thought of money when I was 26? I can't remember anything from when I was 26- that's 40 years ago! I am old and have learned that the older I get the less I know and the less I remember.

I think that when I was 26 I didn't know my a@@ from a hole in the ground. Money didn't mean anything to me, other than the next pizza or chocolate-chip cookies.

SCS: When you were 26-years-old how did you view wealth?
Murphy: Wealth meant nothing to me.

I figured that some day I would figure out what I would do about money, and the wealth part never entered my thinking. I wasn't much of a thinker; I certainly was not a planner. Wealth was the last thing I would be thinking about.

SCS: How do you think of money now?
Murphy: When I apply myself I can make a lot of money, but the money does not mean anything to me.

Except I do like going to the Post Office to see if a check has arrived on time, and if I see an envelope with a window on it- I know it's a check. Then off I go to the bank with my business stamp and deposit slip, and enjoy handing a big check to the teller to deposit.

I think I now know why I enjoy Wells Fargo so much (Wells Fargo has been our business bank for 30 yrs). Whenever I bring a $20-30,000 check to deposit and hand it over to a teller they have to get it approved by the manager. I watch them look me up and down in my torn 49er t-shirt, unshaved, and my dirty Maui hat. Then I nod, they nod (they know me) and they know I am a success. It gives me pleasure to do that again and again.....kind of childish behavior, but, I go with it every time.

SCS: How do you think of wealth now?
Murphy: I guess with our pension plan (for 25 years), how we have saved, our home, and other stuff, I guess it means something to me.

When we met with our new stock broker, Tim Moore, he helped me see the retirement plan as the future. Honestly it doesn't mean that much to me, ‘cause I plan to keep on working ‘till I drop. I want to be the first 100-year-old recruiter!

Work, golf, and family..........that's the wealth thing for me.

SCS: What events in your life shaped your current beliefs about personal finances?
Murphy:
1) I have never spent a lot of money. If I had enough for a good hunk of chocolate, that was enough.
2) My father. I guess knowing how hard my dad worked and the sacrifices he made during the depression have had some influence on my thoughts about finances.
3) My wife. My wife has hammered me into the ground with how one does business, saves, takes care of the future with savings, mutual funds, etc. We are worth a lot of money, but it doesn't mean shit to me.

As a result I work hard, golf twice a week (keep my score in the low 70's), buy some golf balls once in a while ($15), green fees ($18-40), gas for the car (Prius), I pack my own lunch, a movie once in while, restaurants when I’m too lazy to cook (my wife is not a very good chef) - and that's all.

What I am trying to say is that neither money nor wealth has been a motivating factor in any way in my life. And still, I am proud of what I have accomplished, that I enjoy my work, my family, and friends.

I say, keep your eye on the real prize.........happiness, enjoy what you do, don't worry about $$$$, be fairly honest, have good friends, stay close to relatives and friends (always call 'em), and be generous to those who do not have much or have faced tragedy.

*Murphy is not his real name.

Child's Play Pays

To further look at retired people’s views on personal finance and to paint a balanced picture of how this family views personal finance, my next interview is with Teacher4Life’s husband- MustangMan (MM). MM is in his 50’s and a recent retiree. Like his wife, he shares the viewpoint that forethought and care with money can result in financial peace of mind. He emphasizes that they are not wealthy (for he perceives wealth more as a status rather than a state-of-mind). His prudent lessons from childhood have carried over into stable financial security for his retirement years.

SCS: When you were 26-years-old how did you view money?
MM: At 26, both my wife and I had jobs that allowed us to buy, recreate, and save within reason. I think we did better than a lot of other Dinks like us. We both came from families with 5 children and learned at an early age to be wise with what you had (waste not, want not). Money was necessary, but not craved.

SCS: When you were 26-years-old how did you view wealth?
MM: Financial wealth was something only a few people had and it wasn't us! Some people invented things, bought and sold land, buildings, stocks, etc. I didn't really think I would ever become wealthy in my lifetime. Both my wife and I had teaching jobs and didn't perceive that we would have several houses, personal jets, butlers, or maids.

SCS: How do you think of money now?
MM: Money now is something that comes in monthly retirement checks that for the time being serves us well. Our house is paid off and we have only 3 more car payments. An equity loan for various home renovations and a wedding is the only real outstanding loan that we have. Other investments such as stocks and tax shelters are there for emergencies and padding.

SCS: How do you think of wealth now?
MM: I now find myself (and wife) comfortably wealthy. We have both retired, we have money coming in that will support our conservative lifestyle- but yet allow us to travel, take short trips to the coast or mountains and pay what bills we have. Extremely wealthy we aren't. We don't own several houses, jets, butlers, maids or lots of cars. But what we have is relative financial security that should serve both of us for the rest of our lives.

SCS: What events in your life shaped your current beliefs about personal finances?
MM: When I was very young I was given a bank to save my money in. This was not a piggy bank, but a bank shaped like an old mailbox. You would open the little door and drop your change in just like a real mailbox. On the front of it was a chart showing you how much money you would have in one year depending on how much you put in every day. I was amazed at what one could amass with regular deposits. This lasting memory showed me that money should be governed with a goal in mind, having something for the future and not spending everything that you earn.

Proof is in the Prudence

I’m starting a new series where I’m interviewing people who are older- I mean- more experienced with personal finance. Specifically, people in (or very near) retirement and their views on money. I kick things off with an interview with Teacher4Life (T4L) who has recently semi-retired teaching in her 50’s. Overall, her views show that she is content with her past financial choices and that prudence can pay out as a comfortable middle-class life.

SCS: When you were 26-years-old how did you view money?
T4L: At 26 I was already married and we were living in our first house. We had borrowed money from my mother-in-law to make the down payment on it and to pay her back we used an "official" payment booklet. We budgeted, but we felt like we were living on easy street because we had two incomes. Both of us were already saving for retirement in a TSA*. We also put money into an "unexpected" expenses account for annual expenses like property taxes, car and house insurance, and anything else that might pop up.

* The 403(b) plan, often referred to as a tax-sheltered annuity (TSA), was created in 1958 specifically to give teachers and employees of other nonprofit organizations the opportunity to save money on a tax-deferred basis. It's like the 401(k) plans available to private-sector workers, but with fewer regulatory controls (WEA Trust)

SCS: When you were 26-years-old how did you view wealth?
T4L: Wealth – hmmm… I don't think I thought much about this. I knew that we were middle-class and were perfectly happy with that. We were "wealthy" in our happy home.

SCS: How do you think of money now?
T4L: We are reaping the benefits of our early good planning. We still try not to have two car payments at a time. Our car loans are always for the shortest amount of time which makes our payments higher, but the overall outlay is less. We still try to pay off the credit card each month. Being in semi-retirement is letting me ease into really being home and the money I make is going to our travel fund.

Our mortgage is paid though we are carrying an equity line. There is an automatic interest payment taken out of our checking account, but we make a minimum of $1,000 a month on the principal also. At the end of the month I just transfer any money left in that account over as extra principal payment.

I no longer have a budget!

SCS: How do you think of wealth now?
T4L: I feel we are wealthier now due to having a great house that we can afford to remodel as we like. Home ownership is wealth to me because it is security. We have physical proof of our working days. Also, though I still shop sales, I'm willing to spend more on good quality clothes and shoes. We can buy whatever we really want, but our wants are not outlandish. Part of our wealth is the fact that my husband is Mr. Fixit. We have always saved money because he can fix just about anything so we didn't have to pay a serviceman.
I think monetary wealth is being able to meet your wants and needs without accruing debt. Your assets should be much more than your debt.

SCS: What events in your life shaped your current beliefs about personal finances?
T4L: Education was always paramount in my family! Having a mother and grandmother who were college-educated helped drive me to go to college in an age when most women were stay-at-home mothers.

I always knew that I would be responsible for a good part of the costs of college due to being the third child in my family to be in college at the same time. Accepting responsibility by working part time and getting a state scholarship made me feel good about myself. I like being a responsible person and I think that carried over to personal finance. Reality has a way of developing responsibility. I also made a good choice when I married my husband.