I was introduced to the precepts of Fooldom back in the 1970s, before they got all fancy on the Internet, in books, and on the radio. My mom was raising her three kids on her own, on a high school teacher's salary, and showing us what mattered in the world and how we could achieve anything we wanted.
She knew about Living Below Your Means before it had such a name. Eating at home was economical and healthy. Self-importance was not measured by how many thingamabobs you had. And yet we enjoyed nice vacations each year. The kids all had everything we needed and even a few things we wanted.
The point was to be sensible, not miserly. Mom bought cars with cash. She carried no debt, ever! And after putting her three kids through college (on that same high school teacher salary) she retired at age 58.
What a Fool!
Grandma also planted a few seeds. Back in 1977 she bought six shares of Magma Power as a gift for me. I remember taking a piece of graph paper and plotting their value for many months, day after day, though finally tiring of it and throwing the graph and the shares in a desk drawer. I sold it in a weak moment about five years later, but the lasting image of growth and value stayed with me.
Grandma taught me to "buy what you know" long before Peter Lynch became a household name. She had Anheuser-Busch stock because her beer of choice was Budweiser. She had other stocks as well, all of which she bought and held. She believed wholeheartedly in the stock market, having no qualms about its daily gyrations even though she knew firsthand the experiences of 1929.
What a Fool!
This is not entirely a happy story, unfortunately. I strayed from this golden path that was laid before by two very smart women. When I moved out on my own I was mesmerized with all of those companies wanting to give me credit cards. Filling my wallet with plastic gave me a misguided sense of power. It was power... but negative power. It just sucked the life right out of me. By the time I got engaged to my wife, I owed on 15 cards.
What a fool!
Thirteen years later, though, Kristin and I are really living our dream. We got out of debt by making conscious decisions of how we wanted to live and changing our spending habits. Our investments are appreciating nicely, and though most of my financial views have been formed during the spiraling bull market, I have no fear of the recent downturn.
We are raising our three kids in the Bay Area of Northern California on one salary --Kristin's. I spend my days getting the kids to and from school and instructing the oldest (nearly eight years old) about the stock market and investing in general. I insist that, like her grandmother and great-grandmother, my daughter and her siblings become Fools.
Kristin and I have serious plans for some form of early retirement, and we will probably have to fund three college educations and possibly two or more weddings in the 21st century. But it will all come to pass. Because my mom and her mom were Fools, and they passed it on.
Boy, I love calling my mom a Fool!