My Grandfather was a story teller. He probably would have loved being able to get on line and tell the world his investment wisdom. Moreover, his saving strategy. Pauline, pay your self first. I got my first bank account when I was about 6 years old. I think I had over $100 in pennies, nickels, quarters and dollars squirreled away on my 25 cent a week allowance.
Grandpa taught or rather hammered into his two sons, 4 grandchildren and anyone else that was bright enough or even if they weren't his advice of saving first or pay yourself first. I will tell you he retired early in today's terms after spending 40 years with a major insurance company. He was well off for a man with 2 days of nineth grade education. You might say he and Peter Jennings had a lot in common that way.
Okay what does this have to do with a burnt out cellar hole?
Grandpa's favorite advice for anyone that was in the market to buy a house or God Forbid take out a mortgage was this... Find a burn-out cellar hole... buy the land and build. Rational? The chances of a house burning down in the same spot unlikely... the foundation hole was already there... chances are their was a working well or public water system already there... etc. Do you catch my drift? Build it yourself as much as possible.. Well Grandpere.. I didn't do it.. I have moved three times since you passed on. However, the saving advice allowed me to purchase my first home at 23 years old. Two of your grandchildren have built (or are building) there own homes and did much of the work themselves.
Why does this come to the front of my brain? Jim has sent me two articles that he said I had predicted the unfortunate outcome of in terms of trends in America.
Savings - only 4 of 10 people have an emergency savings account in case of the loss of a job, illness or other castrophy. WOW! That is three months rent, food, and bills... Shocking and very scary given the state of the Social Security situation.
Mortgages - or should I say Foreclosures - are on the rise because people can't afford the ARM raises in their payment. Ouch.... ARM Mortgages are only for people that are investing or only going to live in the property for two years because their company will move them again. This is the same for those weird mortgages that you can pick the payment or interest only. Stick with fixed. Look at least you know what the payment is ... your taxes will go up ... why should you be playing the slots with your interest rate?
The real kicker is this... If you have, know or employ a teenager... listen up! Statistics show if you have 16 year old that is able to SAVE $4000 a year between the ages of 16-21 and invests it in growth for the long term.... It will be well over a million by the time they hit their sixties. I know good luck getting that through any teenagers head. However, if you have grandchildren ... what a way to leave them a legacy.... I guess you could revise this to $1100 a year from the time they were born? As Grandpa would say .. Are you with me now?
I thank God for my Grandpa each time I make a sale, make my mortgage payment, and send that little extra off to the investment portfolio.
How do you make the Buffalo Scream?
