With all the news around about public and government pensions being bust in the not so distant future, there must be something that we can learn. Before we had social security and old age pensions what did people do? Were they fine? My Grandpa is more than fine. He has turned 100 this year and I have a lot of money skills to learn from him.
Firstly, he doesn’t have a credit card or a debit card. Every Thursday he’ll go to the bank to chat with the tellers and take out his money in cash for the week. While he is there he’ll pay any bills that he has and then he is done banking for the rest of the week. No gadzillon trips to the bank machines, endless debiting, or transferring funds.
Ask your Grandpa or Grandma how they saved for retirement and I bet they all have similar stories. They worked hard, saved a percent of their incomes, paid down their mortgage, probably sold a bigger house or farm to move into a smaller place and then banked the difference. There weren’t any lines of credits or home owners lines of credit to expand their incomes. What they had after all the bills were paid was what was they had. Living through a great depression, two world wars and everything else wasn’t easy. But they did it!
I bet your Grandparents, if they were investors, bought solid blue chip companies, that paid dividends. They would receive their dividend cheques in the mail and take them to the bank. They’d buy and hold stocks and bonds for the long run and their income helped compliment their retirement. There weren’t mutual funds or ETFs way back then so they had to build portfolios with a broker, investing for income in their retirement in a balanced portfolio.
There is a lot that we can learn from our Grandparents so if you’re lucky enough to still have some like I am, take them out for a drink and learn how they got by. Looking where we have been can be useful to help us get to where we know want to go. Using cash, limiting lines of credit and credit cards to only use as convenience and not to extend our income, buying good companies for their dividends and investing for the long haul. These investing principles are still prudent advice today! Grandpa taught me to heart money too!
Have an awesome week,
Dave
