Driven to Succeed
THIS IS ABOUT a journey, about what can happen and what you can make happen. It���s about starting at the bottom and, over more than 50 years, achieving financial independence.
My financial views were heavily influenced by my parents, especially my father, but not in the way you might imagine. My father was a car salesman. For many years, he worked seven days a week, from 8 a.m. to 8 p.m. He was let go from his job at age 67. Thereafter, my parents lived solely on Social Security. But I never heard my father complain. I never heard him express envy of others.
In his final working years, my father sold Mercedes. He could never afford one himself, but he was allowed to use one of the demo cars. When I was 17, I got to drive a 300SL in a parade. Owning a Mercedes became a lifelong dream. That���s all it was until 2004, when I opened a bank account solely to save for that car. It took me a decade, but eventually I paid cash for a Mercedes E350 in 2014. Three days later, my wife and I started off on a trip across the U.S. I was age 71.
I had seen my parents struggle financially for their entire lives, and I wanted to avoid that at all costs. I wrote in my 1961 high school yearbook that, ���I will be a millionaire someday.��� Adjusting for 60 years of inflation, I didn't make it, but I did okay.
I was born in 1943, and I have a very different perspective from many younger Americans. I recall periodically crawling under my schoolroom desk, practicing for a nuclear attack. I remember when a woman���s place was in the home and discrimination was the norm. I recall when the mandatory retirement age was younger for women than for men.
I���m aware of how lucky I���ve been. My current financial state was achieved with a lot of help from others and thanks to a life largely devoid of significant uncontrollable misfortune. For all that, I am grateful. Still, I do take a modicum of credit for perseverance and fiscal prudence���greatly assisted by my wife.
Clambering upward. When I graduated high school in 1961, two things were on my mind. First, find a job���any job���and, second, when would I be drafted. At age 18, I started my career as a mail boy, the lowest-paid person in a company of 15,000 workers, earning $1.49 an hour.
Four months later, I attempted to sign up to buy U.S. savings bonds through payroll contributions. ���Don���t bother,��� my manager said, ���you won���t be here that long.��� I had only just started working and I was about to be laid off.
Fortunately, the union stepped in and convinced the company to give me a job as a clerk in the employee benefits department, provided I went to night school to learn to type. There was a side benefit to that newly acquired skill: When I entered active duty in the Army in 1968, I quickly went from truck driver to personnel sergeant. That meant I got to work in an office.
My initial foray into investing involved penny stocks. It lasted several years���and it didn���t go well. When I was on active duty, my wife and I were engaged, and I came home one weekend so we could buy her a ring. In anticipation of paying, I sold one of my stocks at a loss. But when it came time to pay for the ring, the jeweler told us we could wait until the fall, when I next came home on leave. That stock I���d sold at a loss? If I had waited to sell, the profit would have paid for the ring.
Meanwhile, it took me several years to get the message about college, in part because it was a subject never mentioned when I was growing up. My father and mother only graduated high school, my grandfather 8th grade, my great-grandfather was illiterate. While two of my high school friends were off to Princeton and Harvard, I was off to find a job.
Still, I knew that, if I wanted to get ahead, I needed a degree. But I was never a motivated student. Finally, 17 years after graduating high school and after nine years of school at nights and weekends, I obtained a degree. I barely saw my four children during those years. But there were no student loans involved. Veteran���s benefits���the result of my time in the Army���paid for most of it.
Several years later, I was in a department staff meeting. One of the participants���she had a PhD���suggested we go around the room and tell where we���d received our degrees. I immediately felt embarrassed. I knew some of the schools that the others had attended: Stanford, Carnegie Mellon, Princeton, Vassar. When they got to me, I named a community college and a mediocre state university. But by then, time and experience had done their job: I was the highest-paid person in the room.
By 1982, I was a manager in the company���s employee benefits department. That was the year we introduced a 401(k) plan���and the year I became serious about investing. I always contributed at least enough to obtain the company���s matching contribution. My wife and I adjusted our spending to make sure that happened, even during the years when we were paying college costs for our four kids.
But my best investment was the pension I earned based on 50 years of service. That pension, coupled with my 401(k) savings and other investments, mean my wife and I today are financially secure. Indeed, my pension���along with Social Security���cover our basic retirement expenses and much more.
If you spend 50 years at one company, you become pretty loyal���maybe too much so. After my time in the Army was up and I was back at my employer, I signed up for the company stock purchase plan at $5 per week. I continued contributing my entire career. More than 50 years of regular investing and reinvesting dividends really adds up.
On top of that, in 2000, I started receiving stock options as part of my compensation. The size of the grants was quite modest by most standards, but I was pleased. Unlike most recipients, when the options vested, I converted most into company stock. Today, shares of my old employer are 34% of my taxable investment account and my accumulated shares generate significant dividends. But I won���t pretend that sort of big investment in a single stock is prudent.
Fulfilling dreams. Yes, I���ve been fortunate. But my wife and I also never caused bad things to happen. We lived on one income, never carried credit card debt and saved every month, no matter what expenses we faced.
Our first house was built in 1918. When we bought it���with a mortgage costing 9��%���we agonized over our ability to afford it. I tallied the total payment, including the mortgage and property taxes. Try as we might, it didn���t look feasible, but we did it anyway.
We lived in that first house for five years. Our second house was a few blocks away. It had been built in1929, with none of the amenities expected of homes today. It had three bedrooms, one the size of a large walk-in closet, two bathrooms���one a converted closet���and a tiny kitchen. We lived there 43 years.
Until I purchased a Mercedes in retirement, we only ever owned basic vehicles. No power anything, no air-conditioning. We kept them until���in three cases���the engines blew up. Once we had an older Chevy stolen. The police called to say they had found it abandoned. I went and ���stole��� it back, cleaned up the food and other garbage in the backseat, had it repaired and kept it for five more years���until the engine blew.
For 10 years starting 1988, we had one, two or three children in college at once. Frankly, I���m not sure how we paid for all that, but I do recall a 401(k) loan, a home equity loan and remortgaging our house. I also started what folks now call a ���side hustle.��� I published a newsletter about employee benefits and put on conferences. In the process, I���d often put the entire family to work, including paying the children to stuff envelopes.
The financial stress of putting our kids through college would have been less, but we were determined to pay the entire cost of their education���plus I made a large, emotionally driven financial decision just before the oldest went off to college.
For many years, my father worked totally on commission, with no paid vacation. But in 1953, when I was 10 years old, we went to Cape Cod for a week. It���s the only family vacation I can recall. A friend gave my father a tip on a great place to stay. In his enthusiasm, my father booked for a week and paid in advance.
The motel turned out to be worse than an Army barracks. My mother refused to stay. To get his money back, we all agreed that I would have a sudden asthma attack, necessitating our immediate departure. That worked, my parents got their money back and we then stayed in several places on the Cape, ending up in Chatham, Massachusetts. Even at age 10, I was hooked.
Fast forward 23 years. In 1976, in a moment of enthusiasm, I said to the family, ���Let���s go to Cape Cod.��� Amazingly, most of the places I remembered from 1953 were still there. From that summer on, we spent vacations on the Cape in a motel or a rented house. On every trip, I expressed my desire to buy a vacation home in Chatham, as unrealistic as that was. I even subscribed to a local newspaper. Every week, I longingly checked the homes that were listed for sale. After several years, my family didn���t want to hear about my daydreaming anymore. But I kept looking.
In February 1987, I found a house that was old but appeared financially feasible. I was warned that if I didn���t buy a place this time, the family was never going house-hunting again. By mistake, we went to the wrong real estate office and they showed us a new house that, at $159,000, was in our price range. It had three bedrooms and two bathrooms���just right.
After some wrangling with the bank, we put down 10% and got a 30-year mortgage at 9��%. I was delighted, as was my family, partly because they wouldn���t have to listen to me each time the Cape Cod newspaper got delivered. In the initial years, we could afford the house only by renting it for most of the summer.
Over the past 35 years, we���ve spent more than $300,000 on additions, remodeling and maintenance on the Chatham house. On top of that, there���s been property taxes, utilities and insurance. Today, the house is valued at more than twice what we paid, including the cost of improvements. But no matter���I never saw the house as an investment. It was fulfilling a dream and buying years of family memories. My only regret is that my father never got to see the house���or, for that matter, the Mercedes.
Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive.��Follow him on Twitter��@QuinnsComments��and check out his earlier��articles.
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