What formed your attitude toward money?

[Whiskers]

One of my best mates is a Polish Immigrant also, I have great respect for him. He came here on his own with a few American dollars. Now he has his own home, a big share portfolio and is going to retire soon. I really enjoyed his hardship stories from Poland too. It just goes to show that anyone can make it here in OZ, cheers and thanks for sharing.

Yeah, I know a few similar Italian, Maltese, Chinese, Lebanese etc of similar vain.

While privately studying a bit of psychology years ago I learnt that WWII survivors had a remarkable ability to overcome their personal and financial loss and knuckle down to make a new start, often quite spectacularly... unlike later generations who tended to demand welfare and the government fix everything for them.

But I'm still perplexed as to why anyone would actually want a new car every year, always have a new fridge and so on. It's just a fridge - a 5 year old one is just as good as a new one and it's the same with cars etc too. So I'm quite happy to keep my 11 year old car, though I do like knowing that I have the $ available to fix it should it break down and that I could pay cash for a new one if I really wanted to.

That's how I feel now. When I was younger it was a bit of buying a new car because I could quite easily as well as a bit of keeping up with the Joneses, but for me at least my outlook on life and priorities changed to just what you say below. I recently bought a 1997 model because I struck a very cheap deal, it was in very good condition, low mileage, had the main mod cons and the way I figure it does the same job about 90% as effectively and for a fraction, about an 1/8th of the capital outlay of a new one. Afterall, it's a continuously depreciating asset and I feel better putting the difference to income or asset generation.

Exactly. It's about security first and foremost. I don't need or even want to be eating at top restaurants on a regular basis, driving a Porsche and living in a mansion.

But I do want certainty that I will have something to eat, adequate transport for my actual needs, and a roof over my head. Having faced the reality of those things not being certain in the past, it does focus your priorities that is for sure.

Dad always saw/sees my life style as excessive and wasteful---and it was---to a degree still is--- in his eyes.
I remember vividly his head shaking when he found out I paid for a season pass for a pensioner friend of mine who couldn't afford to go to the footy.
I also remember a very un happy father when I paid for 4 friends to fly to Melbourne and join us at a concert many years ago.---They couldn't afford it either.

He saw that as big noting.

That was very generous of you Julia. Did your friends appreciate it as a favor or see it as big noting? Often what I find when I go out of my way a little to do something like that for someone is they return a favour some time later when you really need or appreciate something. It just spreads so much good will towards good people who are capable and often do reciprocate generously when they are able to.

Strangely he was less critical of his new John Deere ride on tractor mower which I had delivered a year ago when Mum told me he couldn't afford to fix the old slasher!
Took him a couple of weeks to work out where it came from!!

You mean he was even a little critical of you helping out your old man? Did he keep the tractor?

 

[tech/a]

I'm not at all suggesting you're being patronising here, Tech. From all I've known about you over now many years, that's not your motive at all, rather a genuine desire to help.
But sometimes when I've helped someone out a little, I've wondered if I could be compromising their sense of independence.

Very much at the forefront of thought.

Both of my kids have dad's backing but not charity.
They can and do fend for themselves. They were not spoilt but were given opportunity---it was up to them to take it.
I'm not Paying Kris's HEX debt. As a Doctor of Physics he realizes the investment in himself comes at a cost---one I know only too well.

On other fronts generosity and making available opportunity for the less fortunate (as I see them) doesn't always go to plan. While I have more good experiences than bad---the bad ones have been Horrific! Some people just cant help themselves when it comes to money---they would steel from their own mother.---their attitude is
"They/he can afford it"
Makes plain criminal activity OK---
In cases like this I do have a Dark side.---more Dark BLACK.

I must admit I have made some bad choices when it comes to being charitable---and it has been when I have been the MOST charitable that its blown up in my face----

WHISKERS


That was my text not Julia's
Yes he kept it I use it all the time to cut his Grass!

As for friends I do it in such a way as it doesn't embarrass them-- Xmas or Birthday or I had this given to me (White lie). Just sort out a meal bill with no fuss just saying its taken care of. Its not a weekly occurrence.

 

[KurwaJegoMac]

Great stories everyone! Keep them coming

Further to Tech/a's post ive found that most people ask "please give me money" or "if i give you $$ how much can you make me?"

No one ever asks, "Can you teach me how to be better with my money?"

'Give a man a fish and you feed him for a day, teach a man to fish and you feed him for life'

 

[Whiskers]

WHISKERS

That was my text not Julia's

Ooops sorry bout that tech (and Julia)... t'was a wee bit late and it sems I messed up when selecting the bits I wanted to quote.

Yes he kept it I use it all the time to cut his Grass!

As for friends I do it in such a way as it doesn't embarrass them-- Xmas or Birthday or I had this given to me (White lie). Just sort out a meal bill with no fuss just saying its taken care of. Its not a weekly occurrence.

Yeah, I like that approach too. It also gives them the opportunity to 'fess up' later if and when the time is right for them to acknowledge (and recipricate when opertune) the helping hand they recieved.

 

[tech/a]

Ooops sorry bout that tech (and Julia)... t'was a wee bit late and it sems I messed up when selecting the bits I wanted to quote.

Yeah, I like that approach too. It also gives them the opportunity to 'fess up' later if and when the time is right for them to acknowledge (and recipricate when opertune) the helping hand they recieved.

I dont expect anything from dad.
But smile when he rings and says he ran into a tree of has a puncture and ofcourse I get it taken care of.---because I bought it! Brilliant reasoning!

 

[Julia]

Re the phrase "money is the root of all evil", the actual original words were

For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

apparently from the Bible.

It makes much more sense. There's nothing intrinsically wrong with money. We all need it. But to make it an end in itself usually seems to end in unhappiness.

 

[Whiskers]

Re the phrase "money is the root of all evil", the actual original words were



apparently from the Bible.

It makes much more sense. There's nothing intrinsically wrong with money. We all need it. But to make it an end in itself usually seems to end in unhappiness.

Yep, that the point I was trying to make.

 

[sinner]

Hi Julia,

Great thread. I decided to respond because my story seemed so different to everyone else who posted.

History, parents are both uni educated professional migrants (Iran-Iraq war on the Iran side, came here when I was 1). Both had to re-educate to be recognised by the Australian system so there was hard work to get where they are but no back breaking labor or double shifts involved.

We weren't poor but not rich either, so we never went hungry or missing the important things but I do remember haggling for a $30 xmas present based on my grades one year.

Basically I developed an indifference or even distaste for money very early on in my life because parents would often attach strings to it. So until I had a job I rarely asked for money unless it was important to me at the time.

Got lucky in the sense that I managed my foot in the IT profession door well before "my time", so I was working for professional money each day after school while most of my friends were still stacking shelves. Don't get me wrong though I've stacked plenty a shelf and even been a spruiker at Luna Park.

The value of money for me was always the independence provided, rather than the ability to spend nominal amounts of money on cars, alcohol, mobile phone plans that were always the cause of requests for loans from my mates and dubbed me the nickname "Bank of Sinner".

Due to family stress in 2006/2007 I started spending a lot of time at my best friends house and became close mates with her father. Turns out he is a gold bug and would often quote the price of gold to me in AUD and USD and tell me about the Federal Reserve etc. I didn't understand any of it but it piqued my interest.

Over the next two years I was researching the gold market in a passive way, to me it was just a non-BS version of the financial news, why did I care if gold went to $5000, I could earn $5000 before it got there! But in hindsight I was absorbing the information of supply/demand, charting technicals and gold market specifics through simple osmosis.

During my uni degree I landed a job at a major cable television providers master control room, working 12 hour shifts from 7pm-7am for $38/hr. High stress role monitoring and maintaining a millions of dollars per day encryption system. At this point I was studying full time and working 24-36 hours a week on nights and weekends. The wage money began piling up hard and I was still completely indifferent to it.

However this job allowed me to sit and watch the European and NY markets roll live all night, right up until the close. I began to develop a passion for charting and 24 hour markets.

Around this time I moved some of my savings into physical gold and took my super out of the market. I pestered my parents to do the same. But my father, who is a macro-economics professor with numerous publications etc scoffed and ridiculed me saying all my information was wrong, doomsday talk etc etc. He eventually only conceded that he should have bought some gold and moved his super out of the market after it was too late (he wouldn't even concede after Lehman popped).

Later he told me that in 2009 during one of his classes his students asked

"Did you see the GFC coming?"
"No, but my son did and he was right on the dot!"
"Does he study econ?"
"No, comp sci"
""

heheheh

Anyway, still being quite new to the whole thing I was enamored with the whole gold bug thing and was big on Jim Rogers. I wanted to be in on the energy/gold/Asia play. So being the comp geek that I am started widening my range of financial blogs and forums to look through, and found ASF.

Thanks to ASF, I ended up buying parcels KAR, ESG, CVN, IAU, TRY, IGR all around their 2008/early 2009 lows to fit Rogers concepts. I also picked up some IZZ and IHK at the time. This cost me the bulk of my savings, so after the purchases I was pretty much locked out of the market unless I wanted to liquidate or put more money in. So I just continued to work and live, watching the realtime charts as often as I could.

In 2009 I finished my degree and took a job at UniMelb. Decided the move to Melb would be easier with more cash and it wasn't apparent that there was about to be a hyperinflationary collapse, so I liquidated the majority of my holdings with some shares left in each company. The profits were fantastic, I was very happy with it. Also around this period, I liquidated lots of my physical gold holdings and converted it to silver. In hindsight, this was a great move, and I am about to liquidate the silver at almost triple the entry price for a switch back to gold.

However, still for me it was just a matter of "fun", I wasn't sure why I was doing any of it except it was very interesting. My living costs were low, so I didn't feel like I was doing it to make more money or whatever.

By now I was flush with cash and well acquainted with forex and futures and leverage and began trading the GBPUSD or EURGBP during London session with my stock profits when I would come home from work. This was a trial by fire and completely burned away all the gold bug thought process. In the end price is price, if you're not right you're wrong. However, I was lucky to enter these markets at an interesting point and it was mildly profitable rather than horribly unprofitable in hindsight. Now my gold bug past forms a sort of fundamental basis for my understanding of the markets.

These 5 in a row blocks of 12 hour rounds of intraday trading during lulls at work fueled my passion even more and somewhere along the line I came across the principle of "Income, Savings, Investment". If you don't mind I'll re-write what I wrote down as notes not that long ago.

Income: Income is the money result of any productive activity (not including trading, earning interest or earning rent).
Savings: Savings should be safe, liquid and easily accessible. A portion should remain in physical gold, the rest in hard and soft cash spread across various financial institutions. Savings should be retained in increments of "months worth of living expenses" and you should have at least a year worth of living expenses before investing in anything but 90 day term deposits.
Investment: After savings are secure, retain a portion as seed money for "trading/investing" business. This should be split, majority (say, 70%) going directly into low risk bonds and notes diversified across govt and corporate sectors.
The minority (say, 30%), along with collected coupons and yield of the majority, can be implemented into higher risk strategies like swing trading and options markets. That way the principal of your "investment" seed money never gets touched.

For me this was the formative experience which made my attitude towards money, rather than being indifferent to it.

Now I could see,

Income is the result of a happy existence in healthy society, if you are unhealthy or unhappy you will be unproductive and commensurate income will not be a result of your efforts.
Savings are the result of deferred consumption of income, without an income there can be no additions to the savings pool and in all likelihood a net reduction.
Investment is the result of excess savings capacity and has the potential to increase the returns on savings as well as expand a net asset base (through the addition of stock certificates, long term bonds and gold bullion) thereby reducing reliance on income. Plus, it is really fun!

For me this interdependent harmony was only a relatively recent epiphany, but this attitude towards money completely changed my outlook on life!

 

[Julia]

Sinner, thank you. It's a fascinating story..

When I read accounts of growth like this, all my despair about people not taking responsibility for their own outcomes almost disappears.

Just one aspect of what you say puzzles me a bit, i.e. you observe that you had almost a distaste for money. Could you elaborate a bit on that?

 

[Muschu]

I did a google search ages ago and found a website with "quotes on wealth" or "wealth quotes".
It made for interesting reading on the issue. Some quite contradictory.

 

[sinner]

Sinner, thank you. It's a fascinating story..

When I read accounts of growth like this, all my despair about people not taking responsibility for their own outcomes almost disappears.

Just one aspect of what you say puzzles me a bit, i.e. you observe that you had almost a distaste for money. Could you elaborate a bit on that?

Sure. The distaste was just because my only experiences had been with "strings attached"...

"We gave you money to go to the movie with your friend, why don't you XYZ more..."

The next time I would go to ask for some money the memory of last times hassles would be on my mind.

So I took to things which didn't require money or only small amounts of money, like library, park, visit a friend, computer (you wouldn't believe how good I was at getting free dialup internet), etc.

This formed my tastes so even when the money started coming in all I wanted was books, plants, driving around with my mates, a new computer to build every couple of years, fast internet, etc and mostly indifferent to the surplus.

 

[springhill]

For myself, my family have a primary industry business, it's all i ever wanted to do as a youngster. I spent every spare moment i could after school on our orchard. When i graduated year 12, the property next door, also an orchard (albeit, rundown and neglected) came up for sale. My family said if i intended to work on the orchard, they would buy the next door property, if not it was too much work for my uncle and ageing Nonno. I decided, the orchard life was for me. Due to this, they had to sell a few investment properties to pay 50% of the value of the land for sale and borrow the rest. My uncle basically went without wages for 2 years to help pay off our debt. I earned the princely sum of 10k a year for the first 4 years and seem to have been behind the wage curve ever since. Yet as i grew older and stopped wasting my meagre savings on Contiki holidays, chasing skirt and ripping it up with the boys, i decided a wage based lifestyle wasn't for me and became interested in shares. The first few years i could've done extremely well, but never knew when to sell and subsequently suffered consequences of rising, then crashing share prices. Now i have a system that suits me with rules i tend to stick to. My $50k portfolio 8 months ago is now nearly quadruple that, and the share market represents, to me, a better life that is attainable not just by sweating my guts out on the land. I work hard for my wage and invest it accordingly, though i am not adverse to high risk. I want to provide for myself and my partner.
My attitude to money was forged in the hard, back breaking work of my much loved generations preceeding me, and my own back breaking work aswell. I don't see money attained by success as 'free money', i see it as another opprtunity to invest wisely again and reap the success of that investment. I earned it hard and make sure it works damned hard for me, because i know my next paycheck will be soaked with the sweat of our families labours.
Hope this wasn't too melodramatic a read, but i enjoyed expressing what earning, investment and even learning on ASF means to me.

 

[kgee]

Can I ask...How did the people who picked the fruit turn out?

your

For myself, my family have a primary industry business, it's all i ever wanted to do as a youngster. I spent every spare moment i could after school on our orchard. When i graduated year 12, the property next door, also an orchard (albeit, rundown and neglected) came up for sale. My family said if i intended to work on the orchard, they would buy the next door property, if not it was too much work for my uncle and ageing Nonno. I decided, the orchard life was for me. Due to this, they had to sell a few investment properties to pay 50% of the value of the land for sale and borrow the rest. My uncle basically went without wages for 2 years to help pay off our debt. I earned the princely sum of 10k a year for the first 4 years and seem to have been behind the wage curve ever since. Yet as i grew older and stopped wasting my meagre savings on Contiki holidays, chasing skirt and ripping it up with the boys, i decided a wage based lifestyle wasn't for me and became interested in shares. The first few years i could've done extremely well, but never knew when to sell and subsequently suffered consequences of rising, then crashing share prices. Now i have a system that suits me with rules i tend to stick to. My $50k portfolio 8 months ago is now nearly quadruple that, and the share market represents, to me, a better life that is attainable not just by sweating my guts out on the land. I work hard for my wage and invest it accordingly, though i am not adverse to high risk. I want to provide for myself and my partner.
My attitude to money was forged in the hard, back breaking work of my much loved generations preceeding me, and my own back breaking work aswell. I don't see money attained by success as 'free money', i see it as another opprtunity to invest wisely again and reap the success of that investment. I earned it hard and make sure it works damned hard for me, because i know my next paycheck will be soaked with the sweat of our families labours.
Hope this wasn't too melodramatic a read, but i enjoyed expressing what earning, investment and even learning on ASF means to me.

 

[kgee]

Re: Can I ask...How did the people who picked the fruit turn out?

your

How did the people who picked fruit for you turn out?
Just curious did your family stay in touch with these people?
we are talking about attitudes right?

 

[Julia]

Sure. The distaste was just because my only experiences had been with "strings attached"...

"We gave you money to go to the movie with your friend, why don't you XYZ more..."

The next time I would go to ask for some money the memory of last times hassles would be on my mind.

So I took to things which didn't require money or only small amounts of money, like library, park, visit a friend, computer (you wouldn't believe how good I was at getting free dialup internet), etc.

This formed my tastes so even when the money started coming in all I wanted was books, plants, driving around with my mates, a new computer to build every couple of years, fast internet, etc and mostly indifferent to the surplus.

Ah, I see. Thanks, Sinner. Makes perfect sense.

Hope this wasn't too melodramatic a read, but i enjoyed expressing what earning, investment and even learning on ASF means to me.

On the contrary, really interesting. Many thanks, springhill.

 

[tech/a]

Income is the result of a happy existence in healthy society, if you are unhealthy or unhappy you will be unproductive and commensurate income will not be a result of your efforts.

Great piece Sinner glad you shared.
How very true the above paragraph is ---I see it all the time.

 

[springhill]

Re: Can I ask...How did the people who picked the fruit turn out?

How did the people who picked fruit for you turn out?
Just curious did your family stay in touch with these people?
we are talking about attitudes right?

Our orchard is 90% family run kgee, so if you mean previous employees, then there aren't any really. Maybe the odd casual along the way, but there is one old fuddy-duddy former casual i still see regularly. Many great times spent stirring him up!

 

[Sir Osisofliver]

Nice thread Julia - I'll weigh in. My story is a bit different to what's been written so some may get value out of it. I hope the saga isn't too long.

My mother was born with a silver spoon. Big silver spoon and inherited the equivalent of $20+ million in todays money from my Grandfather when he died, before I was born. She was one of 7 children. I would love to have met my grandfather as many of my Aunties would tell me how much I reminded them of him. (Maybe there are some good genes I inherited).

My mother however made some poor choices in her life, her first husband (and my "Father") being a major one. In a little over ten years my parents went from being wealthy to being destitute - due mainly to my fathers destructive alcohol and gambling addictions. My parents divorced when I was 9 and my deadbeat father never paid a cent in maintenance. (Family law was toothless in those days and needless to say my relationship with my father is non-existant. He could have been a man and taken responsibility for his children and decided not to).

Looking back I don't know how my mother managed to raise four kids through our early teenage years on her own. Money was extremely tight to the point of non existance. We lived hand to mouth, not really knowing whether things would be better in the future. It was a difficult time and most certainly had an impact on how I view money. My brothers and I all worked jobs to help out with the finances and gave everything we earned to our mother to help pay for the basic necessities of life. My brothers and I had a paper round in primary school, worked in fast food restaurants, mowed lawns..did whatever we could to help out. So I've felt the effects of what not having money feels like during my formative years. I remember once during this time finding $100 note on the street. We could have used that money. It was an appreciable percentage of a months income for our family. Nevertheless my mother took the hundred to the local police station and handed it in as lost property - we then got the hundred back four weeks later when no-one had come to collect it...and my mother put it aside for me in a bank account. I remember crying about it at the time and it still makes me a little misty-eyed when I think about it. She was an amazing woman.

In my middle teens my mother met a wonderful man who I consider to be my Father and who had an enormous influence on me. He was an incredibly hard-working professional (legal) and instilled some fantastic lessons for me. One of which involved finding me the worst school holiday job he could and at the end of it sitting down and discussing whether I wanted to go to uni or not

I continued working after school and weekend jobs and with Dad as guarantor bought my first piece of property the day I turned 18 (and quite frankly I gouged the seller - I'd learned to be ruthless when I needed to be).

Eighteen months later I purchased a second property with equity from the first and took another three years to completed my science-based University degree. During this time I was still working nights and weekends and saving money. Once I completed my degree I started at my first real job, and continued investing into property. I was known locally to several real estate agents as "that baby faced assassin" because of my track record in securing good property at good prices. I still however consider myself a shares orientated investor at this time. By 25 I had four properties, one completely paid off and was earning a good salary and well on my way to my first million. (I didn't even know the share market existed at this point. My Dad's experience was in property and he gave me a good grounding in how to make that asset class work.)

Unfortuantely it wasn't the right career choice for me so after a several years I went back to Uni as a mature aged student and completed a second degree, in Commerce - where I met my now wife. (Having sold one of my properties to finance myself as a poor student and focus on my studies - I'd had enough of not being able to concentrate in class because of working two or three jobs).

It was during my second stint at uni that I became interested in the share market. I was learning about it in my degree and starting punting with some money I had set aside. Call it luck, call it timing, call it anything but experience - but I did well. So when I left uni with my newly minted Commerce degree I hit up some local stockbrokers looking for an entry level position - which I got and worked my way up to a high net worth private client advisor with a top five firm and continued my education at the same time - getting postgrad quals in FP, MBA and doing all the stuff required by the FSR changes in '03.

I became disillusioned with my chosen career after about ten years. Sure the money was good, I'd learnt how to make a buck in the share market. I'd refined my system of investing and trading, I'd made my first million and then some, but the industry was too cut-throat. I started feeling restricted and wanting to help people and being with the company I was with felt fettered in doing so. With them it was much more about the unholy dollar and sales rather than ensuring clients financial freedom.

I left the industry and joined a firm where the focus was more on education rather than simply sales, which is where I am to this day. I'm at a position where I don't need to work - I do so because I gain great satisfaction from what I do.

Lessons I learnt about money.
Money is only important when you don't have it. When you have it be generous with it - you can't take it with you.
Charity begins at home.
Hard work gets you money but hard work needs balance - don't neglect your family.


Cheers
Sir O

 

[Julia]

Many thanks, Sir O. It's a great story and one of which you can be very proud.

So, in your case it sounds as though your attitude toward money came from two directly opposite examples, i.e. the waste exhibited by your biological father, and the skills and determination of your mother.

I don't suppose it seemed so at the time, but in hindsight you probably had the best of both worlds in terms of 'learning'.

Lessons I learnt about money.
Money is only important when you don't have it.

Absolutely agree. If I could hold on to just one basic maxim about money, this would be it.

When you have it be generous with it - you can't take it with you.
Charity begins at home.
Hard work gets you money but hard work needs balance - don't neglect your family.

So obviously you have acquired wisdom as well as financial success.

 

[sinner]

I left the industry and joined a firm where the focus was more on education rather than simply sales, which is where I am to this day. I'm at a position where I don't need to work - I do so because I gain great satisfaction from what I do.
Cheers
Sir O

Hey Sir O!

I am trying to shift my career out of CompSci area into financials but it's proving difficult even with some great advice from one of the members here.

Basically I'm looking for some company to recognise I'm a compsci guy with finance passion and take me under their wing. I can code systems, indicators, data processing/validation, etc. I can run stats. I can trawl information off the net faster than anyone I know.

All stuff which serves me well once I come home from work and turn on the tickers, but seemingly useless when it comes to getting my foot in the door. Everyone wants quants to write HFT these days (I am looking at seek all the time). It's not even like they're doing much except collecting liquidity rebates, certainly no Markowitz style operations going down from what I can see.

Any advice from someone like yourself as to how to make the switch? Posting the question here rather than PMing you because I figure other members might have thoughts too.

Hope it isn't too off-topic.