Today I’d like to share a personal conversation that took place between my son and me one Thanksgiving.
He asked me a question that completely caught me off-guard. You see, as a family, I think we’re doing pretty well. We live in a comfortable house, have three cars, take vacations, go out to restaurants, and live like a typical suburban family.
But the town we lived in at the time is quite wealthy. It’s an equestrian community. Bruce Springsteen has a house there. So does Michael Bloomberg. There are a variety of rich and famous people who spend part of their winters there.
As a result, we have many rich friends (not Springsteen, unfortunately). Out of the blue, my son asked why many of our friends had bigger houses and fancier cars than we did.
He wasn’t being obnoxious. He was genuinely curious. He knows I’m financially savvy, so he wondered why we didn’t live like other people who we hang out with. As I talked to him, I emphasized that the choices his mom and I have made have directly led to our financial well-being and, more importantly, our happiness.
Keeping Up With the Joneses
Growing up, many of my friends were wealthy. We were not. Though I never went without, we were solidly middle class. My dad was an assistant principal at a middle school, and my mom stayed at home.
Because we couldn’t keep up with the Joneses, I never tried. I valued my friends for who they were – not for their houses, their cars, or the businesses their parents owned. These guys remain some of my best friends 30 years later.
Though the house we lived in at the time of this discussion was 50% larger than the one I grew up in, it was smaller than many of our wealthy friends’ homes.
We explained to my son that having a huge house wasn’t important to us. We had moved from an apartment, so the house seemed large enough. Our priority was creating a home for our family, not having more square footage. We explained that by buying the house we did, we freed up cash to invest in rental properties, which generate income.
He understood that.
A few of our friends have very nice cars. One drives a Ferrari. I explained that cars were never my thing. I really don’t care about cars. I want a safe, comfortable ride. That’s it.
I typically buy my cars used. Don’t get me wrong, I’m not buying a beat-up jalopy. But this way, someone else eats the depreciation for driving a new car off the dealer’s lot – which is thousands of dollars.
The money that we save on cars is used for investing and travel.
We take a big summer vacation every year. The kids love these trips, and they are something they’ll remember their entire lives.
What You See Isn’t What You Get
I also explained that there are many people who live in big houses and drive expensive cars but can’t afford to. We had a neighbor who, the first time I met him, told me he made $400,000 a year. I hadn’t asked, nor was I particularly interested, but he felt the need to puff out his chest and tell me anyway.
A year later, his business shut down, his house was foreclosed on, and he was literally pulling trees out of the backyard and selling them for whatever cash he could get before the bank kicked him out.
We have a friend who, at the end of a divorce, went out and bought a new Mercedes, despite the fact that he was going to have to downsize his home because he couldn’t afford to keep the house without his wife’s salary.
As I looked around our home, I pointed out that we don’t have a lot of knickknacks. We don’t buy souvenirs from every place we visit. Instead, we spent our money on a very large and comfortable sofa that is the center of our living room and family life. On that sofa, the four of us watch movies, play board games, and take naps (though that doesn’t happen as often as I’d like).
I told my son that some of the friends with the big beautiful houses or the fancy cars never go on vacation or are a few paychecks away from insolvency.
Those are the choices they made, and if they’re happy, then that’s all that matters.
For us, it is more important that we invest our money in income-producing assets and spend our money on experiences like travel.
Low Stress
If you know me, you know that I can be pretty laid-back. I do my best to not let things bother me. I’m all about eliminating stress from my life. I try not to associate with people who constantly have drama going on.
Money, and the lack thereof, is one of the most common forms of stress in a marriage. It is not unusual for couples to break up because of money issues.
One thing my wife and I decided on early in our marriage was not to let our finances become a source of stress. When times were tough, we’d scale down our lifestyle. We’d save for rainy days, and if one person was working particularly hard, the other person would support them as much as possible.
I pointed out to my son that he probably never heard his mother and I argue about money. One of the important reasons is that we didn’t put unnecessary financial stress on ourselves.
As we finished our discussion, I explained that, sure, some of our friends have nicer houses and cars. Some have more money than us. Some don’t. But I also told him that none of it mattered. What was important was that we were making choices that allowed us to live the way we wanted.
I asked him, “If we had an extra $1 million in the bank, would you want us to do anything differently?” He thought about it for a long time. Finally, he answered, “I don’t think so. I like the way things are.”
Well done! Those are totally the important things am I’m sure your son took it to heart. Too bad you didn’t get to meet The Boss. After 30 years in the music biz, I still haven’t met him. It’s still a dream of mine. Thanks for sharing.
Beautiful & honest Story All of us should read & remember & share with our children & grandchildren! Thank you ♥️
That was great advice to your son. Wish more people took it. He sounds like a nice young man, well done
Great job of helping him see the keys to a good life is not the big house or cars, but the life you have with family. All three of my kids and spouses are making more money than we did, but we were always able to take care of colleges and weddings and things were tight, but we are still enjoying the life we have built and gettng to visit our seven grandchildren every so often.
Thanks and GREAT article.
You are a great Dad and were lucky to have found and married the right person for you.
Marc
That is a great way to explain life. I loved it.
Smart. And good.
The story seem to be taken out of my favorite book “ The Millionaire Next Door”. I have the same house I bought 30 years ago. It’s paid off and market value is a million. I drive the same 2008 Infinity G35 I bought in 2010 as a 2 year old turned in lease. It’s got 180000 miles and I maintained it in like new condition. Travelled the world and stayed and ate in the best Hotels and restaurants. Went to most major sporting events in private boxes. Kids were able to each take a friend on all of our vacations. Invested wisely and both the wife and I maxed out our 401k plans each year. By the way I participated as a pioneer in the 401k in 1980. Retired early at 60 years old. Decent enough financial shape to not have any financial worries and don’t have to operate with a budget. If I’m in the mood for a great steak at a high end steak house I go. Usually invite the adult kids and their significant others to join as well. The house and cars and jewelry is not a good storage of wealth for most. Mostly all show for ego and no go as to financial freedom. It’s not how much money you make it’s how well you manage the money you do.
Hearing about your story of how you think about money and lifestyle choices reminded me of my childhood when my parents fought over finances to the point where the marriage was becoming stressful for all of us and I had no way to try to change things. This carried over into my own life as I became an adult. I wish I had had a resource like the Oxford club to guide me but such as it was I learned by making mistakes and moving on. I know other readers in this group have their own stories about decisions that affected their lives and hopefully more people will model their family choices after yours
Atta boy Pops!
Well done, mission accomplished.
You have solidly set your son on track to be happy. Most will never understand this.
Old Blue
Great article! Teaching these ideas is so very important and I hope I can convey them to my family as well as you have described here…Many thanks!
Marc Loved it. You done good by your family. Fred
Awesome! And very true!
Loved the article, Marc. I can relate. It’s a keeper for me. Thank you.
Marc, great advice! I’m sure you’ve read “The Millionaire Next Door”.Great book to help educate kids, as well as adults who need a retune!
Well said Marc!
Excellent advice, dad.
Hi Marc,
I’ve been following your advice for some time now. Things are getting better for my family and I. We’ve followed your advice and made investments in dividend paying stocks, and we’ve paid down lots of debt, especially on our mortgage. Most importantly of all, we are less afraid. I believe that there are some hard times ahead for this country, and most people are oblivious. We have our eyes open, and we will be ready for whatever happens. I cannot thank you enough for your help
I live the same way and have taught my daughter the same important skills and mindset. Thank you for sharing…..
Marc: It seems to me that your wife and yourself have prioritized the important things in a relationship, as well as life itself. my wife and myself have also tried to live without bringing stress into our home. We made a conscious decision, at the beginning of our marriage, to never let finances become an issue between us and after 63 years of marriage it seems to have worked. I appreciate the article you posted as there doesn’t often seem as though you’re a voice in the wilderness. Thanks again.
Great talk and advice you had with your Son. I LOVE it !
Bravo to you and your family!!
I’m 100% in agreement! I made a choice early in life to do things that mattered to me, that gave me a feeling of satisfaction & wellbeing & to those around me as well. Making a lot of money, which I felt confident that I could do, would be a temporary pleasure. As a result, I look back over my life of 76 years and have no regrets. I have always had what I needed, and so much more in terms of relationships & health, & meaning. I would wish as much for everyone else.
Great Dad Marc. Sounds like advice from a good Christian man’s heart.
I really liked this essay. My husband and I live below our means. We do not feel the need to show others that we are comfortable financially by having fancy things and a big house. We have fun being active with our grandchildren and save money so that our hard working children can have a comfortable life themselves when we are no longer around.
Well said! My father had a wonderful way of understating very important lessons so that they were never forgotten. I like the phase of life where time and the experiential become more important than money.
Ditto! Love nice 1-2 year old used quality cars! A SVP at my first job out of college said, “Live below your means. Live on what you made five years ago.” Seems hard to fathom as a 24 yr old, but it has worked. Keeping up with the Jones only makes one miserable. Could not agree with you more. Thanks for all your financial advice.
Thanks Marc, I am passing this on to my family.
Mission accomplished at this end too.
Marc, I like what you told your son.
Marc,
Very enjoyable read!
I truly believe the wrong stress is commonly the trigger of many ailments.
I have been a UK based Chaiman Club member for decades back when Karim was there. Alex and you have changed my life with your balanced and experienced approach to the tiered deployment of trades and investing. I hope by telling you this, you can better understand your legacies in this world are not so invisible.
I have created a portfolio that I plan to use to fund an Oxford Club vacation event in Europe where I hope to meet you both and personally thank you.
(One small thing, I still cannot get text alerts with my UK phone number).
Best regards
Marc, that is an excellent discussion to have with all of our kids… Well done….
The right priorities really do fit well…
Hey Marc…… Thanks for the Story about sharing what is important about Finances with your Son. When our son was nine I shared with him how money works…. how compounding works. He could give me back a Rule of 72 Example in under 3 minutes.
He would ask what is the interest rate Dad?… I would give him a number that would make him use a calculator…… I always asked him to give me the double that fell closest to when he would turn 65……. And what was that dollar number ? I joked with him that he was the only nine year old in America at that time that could do that exercise on command. He said Dad you think so…….. yep, unless they are a savaint like Rain Man.
RAS TN
Good lesson. Material possessions should not define us. A good man leaves an inheritance for his children’s children.
Nice article Marc and I totally relate. When I bought my first house back in 1987 I already had 3 children. We bought a 3 bedroom walkout rambler with a 3/4 acre fenced in lot in a nice suburban neighborhood. Both us and our kids loved it and while the realtor at the time told us it was a nice “starter home”, after adding a 4th bedroom we still live here, and it was paid off in 15 years. That allowed me to sleep like a baby since. Thanks for all the great financial and life advice.
Excellent article….I am now trying to teach this to my 19 year old grandson! I am teaching him about investing and have helped get him started with a handful of dividend stocks you have recommended. I enjoy following you so much….I only wish I’d found you sooner! Thank you!
Love it!