Lessons learned from my millionaire parents
Oh, did I mention that my parents are millionaires? It must have slipped my mind as it has almost no bearing on my everyday life. Yes, I grew up with as a silver-spooner but I really had no idea my parents were wealthy.
You see, my parents are members of an anomalous sociological group that business theorist Thomas J. Stanley dubbed The Millionaire Next Door. They're very much a part of the phenomenon studied as the subject of his New York Times bestseller of the same title.
My parents drove and still drive non-flashy cars, always purchased used and in almost every occasion with cash. They never purchased expensive clothes (and still don't -- sorry, Dad, socks with 6-year old sandals will never be ok). The thing is, the didn't care about "ok" or about pleasing anyone else. Unlike us 20-somethings in our social media "like" and "favorite" driven culture, they didn't seek anyone's approval for their outwardly modest lifestyle.
Growing up in an affluent town (where it's rare to find a home for less than a million) had its perks like low crime and public schools that rival some of the swankiest private schools. However, the rat race, social climbing mentality took its toll on my family who found that flashiness and petty one-up'ing to be nothing other than a manifestation of the residents' nouveau riche insecurity.
My parents had to stave off the town's leading teenage epidemic: entitlement. This my-parents'-money-is-mine-to-spend attitude among my hometown's adolescents was prevalent and particularly abundant starting sophomore year with the advent of driver's licenses, new cars, prom dresses, limos, after parties, sweet 16s, spring break vacations, etc.
In high school, I grew frustrated feeling like we didn't belong in this town because I thought we were impostors. I, at my core, believed we were merely middle class in this upper class town. From my perspective, we seemed pretty poor! We had a collection of soda cans in the garage to recycle for their redemption value and we planned our dinner based on what we had in our pantry and food storage. That's how poor people live, right?
Well, one day my parents sat me down and told me the truth. Their mortgage was nearly paid off (15 year mortgage, paid off in just over 10) and they owned everything outright and were in a good place to help my siblings with college and still have enough to retire comfortably...
Compare that to the Joneses living a few neighborhoods over: they had a mortgage of $800,000+, two Mercedes with hefty monthly payments, and a stay-at-home wife with a $10,000 monthly Nordstrom allowance. The little Joneses? They were involved in so many extra-curricular activities that mommy and daddy were strapped for cash and probably in some, if not a lot, of credit card debt. Mr. and Mrs. Jones were sweating bullets trying to figure out how they were going to pay for their kids' college demands and hoping that the loans they were taking against their 401k wouldn't handicap them too much in retirement.
What did I learn from my parents' money choices and modest lifestyle? Stay tuned as I outline the financial lessons they've passed on as an ongoing series on the blog...