We can Learn a Lot From Our Parents (even if it isn’t what they planned on teaching us)


Many of us in the core age group on this site (25-35)  take all of the great advice we get for granted, namely the free advice we have right in front of our faces. The advice about the mistakes our parents made.

In a great post at GetRichSlowly.org, the guest author of the post, Neal, provides some advice on what you can learn from your parent’s generation:

If you know someone in their fifties (or sixties), don’t be surprised when you discover they’re afraid. I’m 52, and I checked with everyone. They confirmed it. It’s true.

Ten years ago, all of our investments were booming: real estate, the stock market, you name it. It looked like we were headed toward retirement heaven. And we had no qualms about spending money we didn’t have. Now, ofcourse, we’re in trouble/

  • The equity in our homes has melted away. Even if we were responsible and didn’t take out home equity lines to pay for trips to the Bahamas and Bahrain, the slide in values has erased a good chunk — if not all — of our equity.
  • Retirement accounts have been shredded twice over the last decade. We’re lucky if we have what we started with ten years ago.
  • Our kids are moving back in with us. Need I say more?
  • We’re older. Besides the obvious depression associated with that, we now have less time to make up for all the money we no longer have.
  • Inflation is just around the bend. How are we ever going to be able to pay for those lattes at Starbucks?
  • Our dreams are now nightmares. We struggle with our money and our marriages. We had plans of early retirement, extended visits to Maui, and long walks along the River Seine. Now, we’re looking at working until we can’t, even if it means punching receipts at the Costco and moving to Barstow.

He goes on to list the four most important things he would like younger generation to take away about money:

  • Don’t assume your home is going to fund your retirement. It won’t. You have to live somewhere, and your equity may not be as great as you project. If I’m wrong….you won’t complain about it. But if I’m right and you ignore this warning, you’ll be licking your wounds all the way to Costco.
  • Try like hell to pay off your mortgage by the time you’re 55. It may not be possible, but try. If nothing else, it’s a way to force yourself to save. You’ll thank me for it later.
  • Don’t send your kids to schools you can’t afford. Never take on debt to finance Junior’s college or even high school. Don’t count your chickens before they are hatched like we did. We assumed that our investments and earnings would continue to grow so we thought it wouldn’t be a problem to spend that money. We learned how wrong we were.
  • Think about saving as any other expense. Determine how much you need to save monthly and then do it before you spend a dime on anything else. It can’t be an afterthought. Don’t have the mindset of savings “whatever’s left over” because there won’t be anything left over.

So how does this  affect the black community? Well even before we can figure that out, according to an article posted on MSNBC, the current method for calculating the poverty rate (even though already producing staggering numbers) it not even accurate:

The poverty rate among older Americans could be nearly twice as high as the traditional 10 percent level, according to a revision of a half-century-old formula for calculating medical costs and geographic variations in the cost of living.

The National Academy of Science’s formula, which is gaining credibility with public officials including some in the Obama administration, would put the poverty rate for Americans 65 and over at 18.6 percent, or 6.8 million people, compared with 9.7 percent, or 3.6 million people, under the existing measure. The original government formula, created in 1955, doesn’t take account of rising costs of medical care and other factors.

“It’s a hidden problem,” said Robin Talbert, president of the AARP Foundation, which provides job training and support to low-income seniors and is backing legislation that would adopt the NAS formula. “There are still many millions of older people on the edge, who don’t have what they need to get by.”

According to TheNewBlackMagazine.com, the economic pain of our parent’s mistakes are already catching up to us. Whats worse is the damaging mentality that has been passed on which allows the younger generation to perpetuate the cycle:

Generational poverty is inextricably intertwined with race. Hope for breaking the poverty cycle diminishes and another generation of the impoverished is born. Many blacks in America are slipping from poverty to deep poverty into a third-world status.

Black American families cannot wait for the government to save us. Annually, black Americans generate about $700 billion within the U.S. economy. However, a 2005 report by the Target Market Group shows that we don’t use our dollars wisely to improve our plight in America.

For example, in 2004, we had collective purchases that included $22 billion for clothes, $10.7 billion for furniture, $28.7 billion for cars, $14 billion for phone service, $3.7 billion for consumer electronics (not computers) and $2.3 billion on alcoholic beverages.

Unfortunately, the only area where we showed restraint in our spending was on books, where we spent only $257 million, down from $303 million in 2002. We spent more on our fingernails and our hair — $6.3 billion on personal care — than on books and reading materials.

Now, if you are a frequent reader on this site, you may be overwhelmed by the number of never use credit posts, stay out of debt, live within your means, don’t sign up for the most expensive college just to do it etc posts. And truthfully, you can get mad at us and say you’re sick of what we’re saying if you want to. But for those that are willing to make the changes we’re speaking of today are going to be making the best choice of their lives. Furthermore, if you’re having trouble figuring out exactly what we need to do as a community, then allow me to spell it out for you.

We need to specifically:

  • STOP USING CREDIT AS INCOME
  • SPEND LESS
  • CUT UP OUR CREDIT CARDS
  • AVOID DEBT LIKE THE PLAGUE
  • TEACH PERSONAL FINANCE IN INNER CITY HIGH SCHOOLS
  • ENCOURAGE MORE ENTREPRENEURSHIP
  • EDUCATE OURSELVES IN WAYS WE CAN AFFORD
  • STOP ENCOURAGING BALLERIFIC FLASHINESS AND DISREGARD FOR OUR MONEY
  • THEN INVEST, INVEST, INVEST, INVEST.

Now go out and spread the word….

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6 thoughts on “We can Learn a Lot From Our Parents (even if it isn’t what they planned on teaching us)

  1. I think what is best is simply just to stop using your credit cards. When you stop using your credit cards, you’re more likely to save yourself from getting into unsecured debt. But I avoid credit cards, how is it possible to still get a home loan? Do you know?

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  2. Yeah, I totally agree. If you stop using your credit cards, it demonstrates you’ve had a change of mind concerning your personal debt. Of course, just not using your credit cards isn’t adequate, you’ve got to start shopping much less also and start to pay down your debt. Usually, it’s best to start off by paying the one you owe the least amount on, and so you keep inspired.

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  3. LRH's friend

    Hey, I’m neither black nor old nor a male… but this advice is so fine.
    I have implemented many of thiose rules in my ligfe by myself last year, but you bring some points I was ignoring- as the kids schools I can’t afford, and to teach and spread the word.

    I am a female, 40. Have 3 children and a man but am unmarried. My mother, used to say that women were second class whites. Shje was aware we were somewhat slaves of men.

    But I look at how my partner works himself to death- with no view of a rest ever before dying and I realize that the game is not racial, or of gender. The source and correct target here is the banker.

    Any move you can do to simply not support those bastards, you are helping.
    You will be helping your race, but you will also be helping all mankind, we are all petty slaves in the hands of this grotesque Dinosaurs.

    But your advice puts us back on the place of control of our lives, as cause, as leaders, in control.

    Your advice is sound.

    The poorest peoiple inthe uk are women, I heard in the radio a couple of years ago. Because they, having the chore of raising children either didn’t work or worked part time or less than men will. So their old age is very poor. They are the poorest people- old mothers.

    Somehow not right, huh?

    It did not specify race.

    Best, Katia

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