Grandma and saving money

Simple saving money doesn't work well, what do savings accounts pay in interest?
Inflation takes half of dollar value in past 10 years, so if one had $100 ten years ago it's only gonna buy them $50 worth today.
 
dubber09 said:
Simple saving money doesn't work well, what do savings accounts pay in interest?
Inflation takes half of dollar value in past 10 years, so if one had $100 ten years ago it's only gonna buy them $50 worth today.
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a person has to use mutual funds or some other type of investment vehicle to actually make a decent return.. banks are just a place to park a little money..
 
Highlander 1459 said:
a person has to use mutual funds or some other type of investment vehicle to actually make a decent return.. banks are just a place to park a little money..
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We (my gen) are lucky. We’re the generation who doesn’t know that stocks go down. I started in 1994–there has never been a sustained downturn and it has made sense to make regular contributions all throughout….
 
John105 said:
We (my gen) are lucky. We’re the generation who doesn’t know that stocks go down. I started in 1994–there has never been a sustained downturn and it has made sense to make regular contributions all throughout….
Click to expand...
exactly... some stocks do go down, or disappear.... or eventually recover, while some just go up and up and up.... hence my affection for mutual funds, which spread risk... as well as knowing not to invest in anything that doesn't outperform the SP 500 index... anyway, I'm retired... and a blue collar type to boot with no special education in finances, but somewhere along the line I learned to use mutual funds and 457b plans and IRA's outside of the pension plan my employer offers... the end result is I have about 50 % more money in my IRA's than I did when I retired in 2019... simply because of exerciusing some financial common sense..
 
My wife and I have bought our last several cars with cash, and have no revolving credit. Then we looked up our credit scores...we just upgraded out family boat, and decided to finance half of it to get our scores up a bit even though we could have paid cash. Not using your credit isn't good for your score.
 
Highlander 1459 said:
exactly... some stocks do go down, or disappear.... or eventually recover, while some just go up and up and up.... hence my affection for mutual funds, which spread risk... as well as knowing not to invest in anything that doesn't outperform the SP 500 index... anyway, I'm retired... and a blue collar type to boot with no special education in finances, but somewhere along the line I learned to use mutual funds and 457b plans and IRA's outside of the pension plan my employer offers... the end result is I have about 50 % more money in my IRA's than I did when I retired in 2019... simply because of exerciusing some financial common sense..
Click to expand...
Reminds me of the old advice on how to make money on stocks. "Buy stocks and when they go up sell 'em. If they don't go up, don't buy 'em."

Almost no-one has any training in personal finance and investment. I have more than a decade of university education and not one class, not even one lecture on personal finance.

I'm doing much the same as you but I have a word of caution. Stock markets (especially the US markets) are pretty high right now (meaning very high PE ratios) and they keep getting higher. If something can't continue it will eventually stop. And if that ongoing rise stops and reverses even slightly, the market could drop sharply and overshoot on the downside. It's done it before.

So what to do? In addition to broad market ETFs where like you I'm doing very well, I'm holding a bit of cash (high interest savings accounts and GICs in the range of 5%) so I can buy old fashioned stodgy stocks if the market crashes. I also have about 17% in bond funds. Is that the right thing to do? Don't know but I think it's better than being "all in".
 
Highlander 1459 said:
Not really....

Older I got the more I figured out there were 2 groups of Americans.
I'm going to guess about 80% are what you would say give off the appearance of being successful
but reality is they are the smoke and mirrors crowd with a lot of debt and all the out outward signs of affluence.

the other 20% are like grandma.. people wont look twice at them but they have a million dollars in the bank.
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There's a much larger "third group" that has no outward signs of wealth and are actually poor. Many work more than one full time job to make ends meet and pay their rent. Others can't or don't work full time (or at all) because of inability, disability, or unwillingness. And of course a much smaller fourth group with, say, $10 million plus in assets that's genuinely wealthy.
 
I was chatting with my 91 year old grandfather one time in his kitchen. I poured myself a glass of milk out of his refrigerator. The milk was spoiled. I asked him why he didn't buy fresh milk, to which he replied, "I just can't afford it." He was a lifetime saver and had a lot of money, but was a child of the great depression. He didn't spend anything that wasn't completely necessary. He drank spoiled milk during the depression and saw nothing wrong with drinking spoiled milk in 2010. I knew where he kept his checkbook so I went and got it and showed him the balance. The balance was seven figures. That didn't include all of this investments. He invested very well for a long time, since the 1930s. Nothing was going to change his unwillingness to spend money, because you just never know when you might run out.

I went to the store and bought him some milk and a few other things. I dumped the spoiled milk out.
 
wwillson said:
I was chatting with my 91 year old grandfather one time in his kitchen. I poured myself a glass of milk out of his refrigerator. The milk was spoiled. I asked him why he didn't buy fresh milk, to which he replied, "I just can't afford it." He was a lifetime saver and had a lot of money, but was a child of the great depression. He didn't spend anything that wasn't completely necessary. He drank spoiled milk during the depression and saw nothing wrong with drinking spoiled milk in 2010. I knew where he kept his checkbook so I went and got it and showed him the balance. The balance was seven figures. That didn't include all of this investments. He invested very well for a long time, since the 1930s. Nothing was going to change his unwillingness to spend money, because you just never know when you might run out.

I went to the store and bought him some milk and a few other things. I dumped the spoiled milk out.
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As mentioned here a couple of weeks ago the Costco near work had no power. I was going at lunch to buy milk (keep a cooler in the trunk that stays 39F). It’s about $1 more In PA. I stop at Wawa and it was $5 (they gouge). I had no choice but to pay PA full price, but to soften the blow I got 1%, not whole.

This month PA has a sale. From my upbringing I learned to be flexible. There was a US Senator whose values seemed to be a lot like my own. I think he quit his job to be the president of UF.

Milk is not something we can stock up on, but $3.41 is excellent

IMG_1088.webp
 
My mother's parents ran a successful appliance store for many years and sold everything from the very first radios (including A & B battery because customers did not have electricity, so the boys would exchange freshly charged A battery weekly and B battery monthly), washing-machines ringer and later motorized, bi-cycles, TV''s and tubes to keep them running, refrigerators (early ammonia systems, and later refrigerant models), and raised 11 children that ate in shifts, that all worked in that store until they were old enough to marry or move away. Grandma kept the books and between all the paperwork and taking care of cooking and all other things for the children put in full days every day. Grandma believed in saving profit from good times, so as to have enough to get by in lean times. She had a term she used to describe people who spend everything to live in a flashy high on the hog way in good times. Her children learned well from her. Unfortunately now-days that term would be concerned racial. So I'll just leave it at this:

\|££€^in

Grandma did not think much of people who did not save for bad times.

One examen of how frugal she was is that every morning she put water in a bathtub for someone in the family to use, and the rest of the day that water was used to flush torets.
 
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DriveHard said:
My wife and I have bought our last several cars with cash, and have no revolving credit. Then we looked up our credit scores...we just upgraded out family boat, and decided to finance half of it to get our scores up a bit even though we could have paid cash. Not using your credit isn't good for your score.
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I dont care what my credit score is.. it isn't like I get a prize for having a hi score.
I put just about every purchase I make on one credit card and pay it off every month..
 
Highlander 1459 said:
I dont care what my credit score is.. it isn't like I get a prize for having a hi score.
I put just about every purchase I make on one credit card and pay it off every month..
Click to expand...

Maybe not a prize, but you get better treatment when you need it.
We will pay off the boat loan in a month or so after we get a few points back.
 
DriveHard said:
Maybe not a prize, but you get better treatment when you need it.
We will pay off the boat loan in a month or so after we get a few points back.
Click to expand...

I have stated to a financial institution employee I didn't care what my credit score was.
the look on their face was priceless.
its worth saying you got my interest up in what my credit score as I can't say I have looked at it in a few years is I logged on to Credit Karma..

score is 755.. is that good or bad?
 
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