I thought that paying off the mortgage on our house would be a big deal. When I went to the bank to make the final payment, I half expected balloons to fall from the ceiling and a marching band to file through the bank lobby. But no; the teller just gave me a receipt and wished me a nice day.
Our financial adviser told us that having an unmortgaged house was a terrible thing. “Take out another mortgage,” he said, “and invest the money you get! You’ll earn enough of a return on your investment to cover the mortgage payments, and still have money left to reinvest. Plus you’ll get a tax break.”
What he said made sense, and Debra agreed. But I couldn’t imagine going through with a plan like that. There was such a sense of security in finally owning our home. It was ours, and nobody could take it away from us. We didn’t owe money to anybody, and never would again. For me, that feeling was worth more than any amount of income.
I’ve always been told that emotion shouldn’t enter into financial planning, that the cold numbers are all that matter. I respect the people who can abide by that rule, but I just can’t.
From the time that I was old enough to understand money, my parents gave me an allowance of 25 cents per week. Instead of blowing it on candy, I did my best to save it up for a time when I might want to buy something more expensive.
I was proud of my ability to conserve my money. Sometimes at night I would pour my accumulated quarters out of the wooden box I kept them in. I’d spread them out on my bed, gaze at them, handle them, and stack them. My mother once caught me in the act of coin-fondling and demanded that I stop it, saying, “Only misers do that.” I wasn’t clear on what was wrong with being a miser — wasn’t that just another word for frugality? — but, in any case, I promised to stop taking pleasure in my wealth.
Nevertheless, my mother came back and asked me to hand over my cash so she could put it in the bank. “It will be safe there,” she said. “And you can get it back whenever you need it.”
I reluctantly gave her the fifteen dollars I’d saved, and that was the last I saw of it. When I did eventually ask to get the money back so I could buy something, my mother denied any memory of ever having taken it. I don’t think that she deliberately intended to cheat me; I’m sure that she honestly didn’t remember. But from that time on, I fiercely guarded my access to my savings. When I opened my own bank account, I made sure that I held the bankbook and could withdraw my money whenever I wanted to.
We were not a well-to-do family. My parents never talked about their finances in front of me, but I often heard their late-night arguments about money. One night, they were particularly distraught about having lost most of their savings in mutual funds. I had no idea what a mutual fund was, but I vowed never to repeat my parents’ mistake by putting my money in one.
When I was in college, I worked three part-time jobs and carefully controlled my spending. As an adult, I routinely put part of my paycheck into a savings account. I refused to go into debt. I never took out a car loan; I would save up first and then buy the car.
When I married Debra, we closed our individual bank accounts and put all of our savings into a joint account. I had a separate account for my freelance business, which I managed as conservatively as possible. It never even occurred to me to spend money I didn’t have. I’m always amazed when I hear about people who take out business loans for office space or equipment, with the expectation of making enough money to repay the lender. How could they possibly take a risk like that? My office was in my home, and my purchases were strictly pay-as-you-go.
Eventually, as our savings grew, Debra gently suggested that we consider investing our money rather than keeping it in a bank. I reluctantly agreed, and we went to see a financial advisor who had been recommended to us. He proposed putting our money into mutual funds. “No!” I said, remembering my childhood. “No mutual funds!”
I have friends who play the stock market, buying shares in companies that they think are undervalued and selling them when they appreciate. I don’t see how anyone could do that. The idea that I might have insight into a business’s financial prospects that other investors don’t, and that I would then bet money on that supposed insight, is inconceivable to me.
Today, our retirement savings are invested in stocks, bonds, and — yes — mutual funds, but I have nothing to do with it. Someone else does the investing for us, and Debra keeps track of the numbers. The thought that our money could vanish overnight is immensely frightening to me, so I’m happy to leave the management of it to people other than myself. At least we own our home, and no one can take it away from us. Knowing that makes me feel safe and independent, like having a pile of quarters in a wooden box.
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