Comments on: Inheriting Generations of Frugal Living

By: UH2L

UH2L — Tue, 31 Mar 2009 22:46:02 +0000

Here is a counterpoint here from a person that nearly maxes out his 401K every year and saves another 15% to 25% of his income beyond that. What I have learned with this recent financial crisis is that the car I bought in late 2005 was a better investment than my “investments” which I bought over the same timespan. Investments can vanish, but stuff is concrete and has utility and can be enjoyed.

It is very important to save for our future and our subsequent generations, but it is true that you can’t take it with you and any one of us could die tomorrow. My father did pass away back in 2007 and he left my mom with enough to be comfortable, but she is in no mood to spend it. She would have rather have spent it while my dad was still alive so that they could have enjoyed it together. She looks upon extra money as somewhat of a burden because she has to decide who gets it when she passes away. I have to keep showing her that she is financially secure and that she should enjoy her life by spending some of that money. I get more satisfaction out of that than I would if I received it in inheritance to spend for myself or others.

So, it’s true that saving money is important, but to live an ultra-frugal life where every penny is pinched is a major mistake. Charity is perhaps the best use, but once you donate a decent amount of money, you should use some of it for yourself or your loved ones. Many enjoyable things require no money, but what is money for if you can’t use it to further enjoy life?

By: Manshu

Manshu — Sat, 28 Mar 2009 00:05:18 +0000

Some nice math there.

By: MoneyNing

MoneyNing — Fri, 27 Mar 2009 21:58:24 +0000

That investment gift for your (grand)children is a great one. I should remember to do this when my kids are born!

marci: It’s amazing how simple your money market account idea is but I’d bet that 99.9% of everyone won’t take action even after reading your comment. I think I will write a post about this particular strategy.

PGWP: That’s why the “pay yourself first” strategy works so well. All you have to do is setup an account and have money automatically sent to your savings/investment accounts before you get a chance to blow it on the next iPhone. Trust me that you will thank me in the future.

By: Play Games Win Prizes

Play Games Win Prizes — Fri, 27 Mar 2009 20:55:46 +0000

You hear these type of sayings pretty often of how you should start saving now and in the end, it will be a huge sum. However, it’s just too difficult for some

-Mike

By: marci

marci — Fri, 27 Mar 2009 19:20:30 +0000

Good explanation there! It’s also one of the reasons my paycheck goes into the money market account every payday – and then I draw out what I need when I get ready to pay the utilities, etc. Even that small amount of interest monthly adds up in the long run, and interest on the interest, etc.

During the first year after each grandchild was born (there are 8 so far!) I opened an account for each one with $500. I add to it on their birthdays and Christmas. The plan is that they get control of it all at age 18, if going to college, or 21 if not needed for something major. College or not, it will be theirs. It may not be a lot, but it will be more than there would be if I had not done anything. This way it is not too painful on my budget…. altho, I do have to admit it was a LOT easier when there were only 2 grandkids when I started it (not that I’m complaining at all!)

By: Jane

Jane — Fri, 27 Mar 2009 18:22:13 +0000

Great post. Never thought about it that way…gets me thinking in a different way which is always good.

By: ObliviousInvestor

ObliviousInvestor — Fri, 27 Mar 2009 13:58:16 +0000

I recently read a (true) story–can’t remember if it was in Die Broke or some other book I read recently–about a man who invested $1,000 in the market when each of his grandchildren were born. They weren’t allowed to touch it until they each turned 65.

Every one of them who didn’t cash out early ended up being a millionaire without even doing any investing on their own.

By: Neal Frankle

Neal Frankle — Fri, 27 Mar 2009 13:57:23 +0000

I really appreciate just the thought process. As a result of the financial crisis, not many people are thinking past their noses let alone their lifetime.

Well Done David!

By: Nate @ Debt-free Scholar

Nate @ Debt-free Scholar — Fri, 27 Mar 2009 13:05:08 +0000

It is amazing. If you just save a little bit and invest it well, it could be come a huge inheritance for our children and grandchildren.

Thanks,
Nate