MoneyWise Live | July 4, 2018

Learning Financial Independence from Our Father’s Fathers

Show Notes

We honored our fathers a few weeks ago.  On the show, we’re going to take some advice from our fathers' fathers about ways to become financially independent.  Yes, we’re celebrating all the holidays today … on MoneyWise Live.

It’s hard to compare America today to what it was like only two generations ago.  Our fathers’ fathers seemed to have a better grip on some Biblical financial principles than we do so I want to look at their financial habits to see if we can learn something from them.

On Saving & Borrowing - 

  • Credit wasn’t as readily available then so very family in our grandparents’ generation had a coffee can or a mattress with emergency money in it.
  • As a Depression Generation, they didn’t spend more than they earned.
  • They didn’t rely on credit cards or home equity loans or raiding their 401k accounts when something went wrong.
  • Our father’s fathers managed their money instead of managing their minimum payments.

On Earning a Living -

  • Our fathers’ fathers understood hard work.
  • If they needed more money, they got a second job or learned a better paying trade.
  • Our generation needs to be not only willing to work as an apprentice but also recognize that the apprentice level isn't where you remain.
  • The average worker in 1945 earned $2,400 annually which is about $33,000 today.  Now, the median income is $59,000.  Our grandparents somehow got by on roughly one fourth of what we live on today. 

On Costs in 1945 Compared to Today’s Costs -

  • Truth be told, today’s costs are higher.  But are they four times higher?
  • In today’s dollars, a car in 1945 would cost about $14,000, where a 2018 car costs on average about $36,000.
  • Our grandparents usually got by with one car if they even owned a car.  Car-pooling, public transportation and walking were a way of life.
  • The price of a house in 1945 was about $4,600. That's $64,000 of today’s dollars.

On Spending Less -

  • Our grandparents saved money by being more self-sufficient.
  • They fixed things that broke, instead of buying new things.
  • They changed faucets and painted rooms, mended clothes, made their own clothes, repaired bicycles and lawn mowers and cars. 
  • They didn’t go out to eat very often.  Instead, they invited friends over to dinner.

Next, they answer your questions at (800) 525-7000 and about the following:

  • Is it against biblical principle for a female to make more than her husband?
  • Is it a good idea to undergo a large-scale home renovation on a credit card?
  • If you're planning on retiring in 2 years and are currently depositing Social Security checks into a savings account, should you consider putting the checks in a money market instead?
  • Is it a good idea to take Social Security early or is there a substantial reduction in benefits for doing so?
  • What percentage of your gross income should you put toward your retirement account?
  • If you have some money in CDs for children to use in 5 years, should you consider moving it into a more conservative investment as that period of time gets closer? 

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