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In late 1981, not long before my 19th birthday, I left Bryanston—my second and final English boarding school—for the last time. I didn’t graduate. Nobody did. At the time, graduation simply wasn’t a thing at English schools, and apparently it still isn’t.
Instead, I’d taken the Cambridge entrance exam, marking the end of my nine years at boarding school. With the exams over, it was time to pack my bags and head back to Washington, DC, where my parents were living.
I spent most of the next 10 months, while I waited to “go up” to Cambridge, working for a tiny newspaper in Washington’s Maryland suburbs. The newspaper’s staff—most of them women trying to keep a foot in the work world while raising children—were uniformly generous with their wisdom, looking to pass it on to the uncouth youth who’d landed in their midst. I’ve mentioned before how the paper’s editor took me under her wing.
The advertising manager, Joan Schwartz, did the same. She wanted to take a public speaking course run by Toastmasters, and persuaded me to join her. As part of the course, we all had to give a five-minute speech.
One attendee discussed his stock-market investing. He talked about how he’d started buying individual stocks during the 1970s, a miserable decade for the market. By the time he cashed out in the early 1980s, his total profit amounted to $5—the same sum he’d managed to make by picking up bills and coins he spotted while jogging.
It was one of the first times I ever heard anybody talk about their experience investing in stocks. It wasn’t exactly a glowing endorsement. Fortunately, I wasn’t discouraged.
When I was growing up, my parents weren’t stock-market investors. That would come later, in part with my encouragement. Instead, when it came to investing, the dinner table conversation was mostly about the virtues of homeownership. Reflecting the 1970s, I learned about the upside of inflation, and how it could drive home prices higher, even as it made the monthly payments on a fixed-rate mortgage ever more affordable.
But what about you? What investing lessons did you learn growing up—and did those lessons prove useful?
Somehow learned from my parents about finance. They did not discuss money, stocks or a budget but it came through mainly by example. We did not have that much but we spent wisely. One thing was, my Dad had me get the Chicago Tribune, and he always said it must be the Latest Markets. He wanted the stocks closing price and he always read the Finance Section, this was in 1954 or so. Mom showed me her budget system which consisted of 7 envelopes, groceries, gas, electric, and the like. I always remember her saying robbing Peter to pay Paul, meaning taking extra from one envelope and putting it the next.
Also if you wanted money in your pocket, you had to earn it, for me a newspaper route where I had to collect 10¢ from each customer weekly for the paper, believe me you learn a lot about people. Then doing extra chores for Grandma, and get a quarter. One day my parents said you can get a Bank account and the bank will give you interest on your money instead of just keeping it in a drawer, hmmmm. So that is the start of my learning about compounding your money and that was brought home very clearly in college in my Engineering Economics course. Also at 16 and then saving more with a part time job at the grocery store. Then Dad taught me how to do my Income Tax to get a refund! Have done my IRS taxes every year since, from one page to now over 50 pages of forms, luckily we have Turbo Tax.
One more thing, in College, I had to earn my way through and became a CoOp student working a semester on and off. I invested my money for school in stocks, very risky, because I was just learning how to select stocks, my broker who liked restaurants said buy McDonald’s but that was to high priced per share. Fortunately I had ups and downs, learned a lot and Graduated.
One last thing, as a parent I learned it is not so much what you say, because your children learn from your EXAMPLE, so it what you do, remember they watch you for 20 years or more! And they learn a lot.
I first became interested in stocks when I was in high school. In 1966, I told my father that I would like to invest $150 of my savings in GM. He took me to a local stock broker who convinced me to invest in Cessna. Unfortunately, my stock performed about as poorly as the rest of the market from 1966 to the early 1970s when I sold it at a substantial loss. This experience soured me on stocks to the point that I didn’t start allocating a portion of my IRA contributions to equities until ~1990. While I have remained a conservative investor, I forced myself to allocate 50% to equities about 30 years ago and things have worked out better than I ever imagined.
My father’s number one saying was always, “A fool and his money are soon parted”. That adage has been true throughout the ages! Seriously though, he used to give us dividend stocks as birthday presents. I learned very early the value of reinvesting dividends and the principal of compounding interest.
My father taught me much about money, but it was mostly how not to do it. There was no planning and every large bill was a surprise. I remember every year when he got the tax bill for the house it was panic. I used to say “Doesn’t this bill come every year at this time?” Why not plan for it and save? The experience made me appreciate planning and saving for the future. Bogleheads and Humble Dollar helped a lot too.