When it comes to money, wisdom isn’t so hard to find. It’s just hard to follow. My life is a case in point. By the time I was 40, I had read several books on how to build a personal fortune, or at least, on how to build up respectable assets for a relatively worry-free retirement. Eventually I also read that millionaire-making bestseller, The Millionaire Next Door (1996), and that oldie-but-goodie, Think and Grow Rich.
My Lutheran pastor suggested a double tithe: one to the church (of course!) and the other to yourself. I knew all about pay-yourself-first and live on the remainder of your income. I loved the story in ... Next Door about the couple with two modest incomes. If memory serves, he was a school teacher and she a librarian. They became millionaires by the time they were both middle-aged. How. Easy! They lived on his salary and banked and/or invested all of hers. Back then, of course, there was the so-called “miracle of compound interest.” With passbook savings accounts from the S & L down the street netting 3.5% quarterly or better, you just added money regularly and never took anything out. What compounded was the latest total plus the interest, so your assets grew in a stairstep fashion, and before you knew it, you were, well, rich.
I knew it all, but did I do it? Of course not! I prided myself on tithing to church and other charities. I paid myself last. I did have savings accounts, several. But as soon as I’d saved up a small bundle, it went for something the kids or we, um, needed. Then there were family trips during our years in expensive Hawaii. Every trip out of state was a major financial undertaking taxing the limits of our credit cards. Plus, we as a family just had to attend all those international get-togethers of our spiritual group. Finally, that exemplary couple in the Millionaire book, as I recall, had no kids, and to make matters worse, my late wife didn’t work outside the house. Result: We never got ahead. In fact, the faster we ran, the behinder we got. Oy!
Several days ago, our beloved goddaughter Mo turned 26. We had a little talk about financial planning. It was totally do as I say, not as I did. Though savings accounts with any kind of interest are now gone, there are new options like acorns.com (Check it out.), a relatively painless way to save. But the missing ingredients in my financial planning were discipline and consistency. Knowledge may be power, but you have to use that power wisely. Alas, I didn’t, and at 80 I can only thank God for Social Security, Medicare, my current wife’s lovely paid-up house, and some annuities that have just come due. Wisdom alone just ain’t enough!