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Two Grandpas

Joel M. Schofer  |  August 16, 2018

UNLIKE ROBERT Kiyosaki, I only have one dad. I did have two grandfathers, though, and one died recently. The other died a few years ago. One was rich and one was poor. Well, he might not have been poor, but he was poorer than the one who just died. What did they teach me?

My poor(er) grandpa worked odd jobs his whole life. He never owned a business that I was aware of. I don’t think investing was his thing, because he never had all that much money. He had a low-six-figure retirement nest egg and he had Social Security. Frankly, all he wanted to do was bowl. He had a 300 game once, which I think was his life’s crowning achievement.

Despite his lack of financial acumen or success, he never really wanted for anything. After his wife—my grandmother—developed dementia and moved into a nursing home, he lived independently up until the end of his life in a small apartment that was near his children and the bowling alley. He drove a perfectly fine car. He went out for meals when he wanted, his favorite meal being well-done steak at any local diner. He had Medicare for his health insurance. What’s the lesson here?

Poor Grandpa Lesson No. 1: A modest lifestyle and low spending will make up for a less-than-impressive nest egg.

He lived into his 90s despite severe heart and vascular disease, prostate cancer, and smoking nearly his whole life. He stayed mentally intact the entire time, and was bowling right up until the end. What was his secret? As he told me many times…

Poor Grandpa Lesson No. 2: “Never drink anything but beer or coffee. Water will rust your insides.”

My rich grandpa died recently, and there are many things you can learn from his financial life. He lived in a small town in Pennsylvania that had a population of 2,069 in the 2010 census. In that town, he ran a small business that sold furniture and operated a funeral parlor. As he once told me, the furniture makers made the coffins, so the businesses were linked in the old days. He and his brother worked for his father, who ran the business before them. Running this small business allowed him to build a net worth that was significant by anyone’s definition.

Rich Grandpa Lesson No. 1: The easiest way to become wealthy is to own a business.

He never owned more than one car while I knew him, although his business owned delivery trucks he could use. He lived in the same house the entire time, which was a modest brick house on the town’s main street. It was 2,300 square feet, four bedrooms, two baths, and sold for $185,000 in 2015, when he moved into a nursing home. According to Zillow, it is now worth $197,639. He had the same spouse, my grandmother, and never divorced.

Rich Grandpa Lesson No: 2: One Spouse+One House=Path to Wealth.

During his life, he periodically purchased stock in a local bank. Over the years and after 20 or so bank mergers, that local bank was now a subsidiary of a large international bank. Along came the 2008-09 financial crisis… and that investment was worth only a small fraction of what it once was. A very small fraction.

Rich Grandpa Lesson No. 3: Diversify to reduce risk. Don’t put all your financial eggs in one basket.

There is one final lesson that I learned from my rich grandfather that I’ll never forget.

Rich Grandpa Lesson No. 4: If you are a young boy and want to see nudity for the first time, go on a furniture delivery with your grandpa who owns a furniture store. There just might be a Playboy calendar hanging above the kitchen table.

Joel M. Schofer, MD, MBA, is a Commander with the U.S. Navy’s Medical Corps. His previous blogs for HumbleDollar include My Favorite Word, Winning the Game and Getting Used. He blogs about personal finance at MilitaryMillions.com and can be reached at Still-In@MilitaryMillions.com. The views expressed here are those of the author and do not necessarily reflect the official policy or position of the Department of the Navy, Department of Defense or the U.S. Government.

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