Fathers Day Pearls: What Our Dads Taught Us About Money
When it comes to money, 30 Rock star Alec Baldwin told MoneyWatch via Twitter that his father advised: "Marry a rich woman." Comedian Chelsea Handler told Playboy that on the financial front her Dad "was the perfect role model of what not to do as a parent."
I guess that makes me lucky. When my Dad passed away a few years ago the theme of my eulogy was the value of everything I had learned from him. This being a personal finance blog, I'll stick to what Dad taught me about making ends meet:
- When you give, you get As a pre-teen attending Sunday services with the family I once observed Dad putting $20 in the weekly envelope. That's $140 in today's dollars. "Wow," I said. "Why are you giving away so much money?" He replied: "Dan, it all comes back to me 20-fold." I didn't understand what he meant until many years later. But one day it made sense. You get as much as you give. I went on to write A New Purpose, a book about giving. One of my favorite quotes is from Jimmy Carter: "In every case when I thought I was doing somebody else a favor by building a house or something like that, I found that I got a lot more out of it than I put into it."
- Money is a renewable resource Money can be hard to come by and you certainly don't want to waste it. But your bank account is not the most important thing in your life, Dad would tell me. I had taken a beating selling my first house in 1990 (after a brutal real estate downturn). In order to close the sale and get on with my life, which included relocation for work, I'd have to write a check to the bank for $25,000. That's $41,000 in today's dollars. I was miserable. Selling my largest asset was going to cost me every penny I had saved. "It's only money," Dad said. "You're young. You'll make more."
- Pay what you owe One of my favorite stories about Dad, who was a community banker, comes from my high school friend Dave, who at 17 bought his first car with a loan from the bank where Dad worked. Dave knew my Dad and went straight to him to ask for the loan, no doubt expecting a light touch. Dad drew up the papers and showed Dave the bottom line. "David, this is the amount you'll have to pay the bank each month. Can you do it?" Dave answered, "I think I can." This drew a stern response. "David, I didn't ask what you think you can do. You won't have your car very long unless you know you can make the payments."
- Kids need to be pushed out of the nest This was never an issue with me. I couldn't wait to be self-sufficient. But just in case I harbored any thoughts of hanging on to campus life too long, Dad told me on my way to college my freshman year: "I'm paying for four years. Not a minute more."
- People who appear rich often aren't Maybe it's because Dad was a banker that he understood how often people borrow money to drive nice cars and live in big houses that leave them stretched and unable to build real wealth. Certainly, many folks with two bimmers and a mcmansion have money. But many do not. He always told me there were more millionaires in plain neighborhoods than in fancy ones. They don't flaunt it. But they retire early.
- Compare prices Long after I had become a bargain-conscious shopper, I learned to never boast to Dad about what a great deal I had got on an item. It would only launch him into epic tales of how he had got similar stuff much cheaper. For Dad, getting a great price wasn't so much a budget consideration as it was a sport. He enjoyed the hunt, which made smart shopping fun as well as rewarding.
Here are some Fathers Day thoughts from prominent people.
Next: Tony Dungy
Tony Dungy, former NFL head coach and co-founder of AllProDad.com
The value of a dollar: "One of the greatest things my dad did for me was teach me the value of a dollar. When I was young I didn't always agree with his rules. In ninth grade, I wanted to get a pair of black Converse All-Stars. All the players on our basketball team were getting them. They were $9.95 and my Dad said, "Well, the K-Mart shoes are $4.95; they're actually the same shoes and so if you want to get All-Stars, you have to work for the $5.00." I couldn't understand that. But now that I'm a Dad, I feel like many kids get so much stuff that they don't understand how hard it is to work for that money. So I'm having to find creative ways to show my kids how important money management is. I think my wife, Lauren, does a good job of trying to make our kids work for it and know that if there is something that they really want, they have to earn it. And they need to understand that their money should be saved and given to the Lord appropriately."
--Email correspondence with MoneyWatch
Next: Arianna Huffington
Arianna Huffington, editor-in-chief, Huffington Post Media Group
Pursue your dreams with determination: "In Greece, my father, a journalist, started a series of failed newspapers. By watching him struggle -- and try, try again -- I learned firsthand the passion of a newspaperman, the stubbornness, the resiliency, the importance, the odds against success, and the value of never letting your dreams fade. It's a lesson that has served me well many times in my life -- including when my second book was turned down by 36 publishers before someone finally bought it."
--Email correspondence with MoneyWatch
Next: Steve Martin
Steve Martin, comedian, actor
Stay out of debt: "I loved comic books, especially the funny ones, like Little Lulu, and man oh man, if Uncle Scrooge was in the latest episode of Donald Duck, I was in heaven. My father financed my subscriptions, and I ended up, after one year, owing him five dollars. Though he never dogged me for it, I'm sure he kept this debt on the books to teach me the value of money. As the balance grew, I was nauseated whenever I thought of it. One birthday, he forgave my debt, and I soared with relief. In my adult life, I have never bought anything on credit."
--From Born Standing Up: A Comic's Life by Steve Martin
Next: Jim Cramer
Jim Cramer, author and host of CNBC's Mad Money
Focus on what matters: "The best investment advice I ever got was from my father, Ken Cramer, who told me that all that matters is inventory. If you have too much inventory, you are in trouble. If you have too little inventory, you are in trouble. If you have to pay too much to keep inventory, you are going to get hurt. And if you have the wrong inventory, you will get stung....As a hedge fund manager, I found myself constantly thinking about what my father told me. I looked at my stocks as if they were inventory and I recognized that in big sell-offs, if you are carrying too much inventory you will be annihilated. If the market ramps big and you are too lean, you can't catch up. So every day I balanced my inventory to be sure I could handle the next day's trading."
--From The Best Investment Advice I Ever Received: Priceless Wisdom from Warren Buffett, Jim Cramer, Suze Orman, Steve Forbes, and Dozens of Other Top Financial Experts by Liz Claman
Next: Diane Keaton
Diane Keaton, actress
Do what you love: "I remember when I was filming Godfather III. My father was diagnosed with an inoperable brain tumor, and I flew home. He told me, 'I only wish I'd done more. I wish I had worked less at something I didn't really enjoy.' I've been blessed to work at something I love, but I wish his words had emboldened me more."
--From On Becoming Fearless...in Love, Work, and Life by Arianna Huffington
Next: Marcy Carsey
Marcy Carsey, television producer (That 70s Show, 3rd Rock from the Sun, Roseanne)
Keep money in perspective: "My mother and father taught me the meaning and meaninglessness of money. His job at the shipyard never bought much, but they tithed at the church, and there was always something for anyone who needed it. Money meant only what it should mean: a roof over our heads, food on the table, and the means to help anyone with less. There was never a thought of envy, status, or worry associated with money. I know that the reason I was able to make money in business is because I could risk it. I didn't need it; I didn't love it. It was just a side effect of doing what I loved."
--From On Becoming Fearless...in Love, Work, and Life by Arianna Huffington
Next: U.S. Rep. Michele Bachmann
U.S Rep. Michele Bachmann (R-Minn.), a presidential hopeful
Pay in cash: "My dad was keen on teaching my brothers and me to pay for things in cash, and not borrow. I was 10 when my parents, who had been married for 15 years, purchased their first 'nice' piece of furniture. It was an early American maple table and chairs. My parents had saved for that table and my Dad told us at the time to never borrow to buy furniture, only pay cash."
--Email correspondence with MoneyWatch
Next: Donald Trump
Donald Trump, host, The Apprentice; Chairman and CEO, The Trump Organization
Work hard at something you enjoy: "Many people believe that I started out with a lot of money from my father. The truth is that when I started out in business, I was practically broke. My father didn't give me much money, but what he did give me was a good education and the simple formula for getting wealthy: work hard doing what you love."
--From Think Big and Kick Ass in Business and Life by Donald Trump and Bill Zanker
Next: Gary Locke
Gary Locke, U.S. Commerce Secretary
Keep a rainy day fund: "My father always emphasized the importance of saving -- setting money aside to prepare for a rainy day. His thinking was shaped by his upbringing as an immigrant, who grew up during the Great Depression, worked hard and lived modestly so his children could have a better financial future. Save money, stay within your means and buy things with lasting value -- these are the lessons I learned from my father that have impacted my entire life."
--Email correspondence with MoneyWatch
Photos courtesy Flickr users 54585499@N04, jmrosenfeld, jdlasica, exeromai, gulinvarder, cooneycenter, gageskidmore, americanprogress, kimsnellink, tulanesally
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