MY DAD HAD A LOT of failings. He was short tempered. He felt no compunction about being rude or cantankerous. Being with him in public would produce any number of cringe-worthy moments.
But when it came to money, he knew what he was doing.
He was born in 1922 to Russian Jewish immigrants. They came with nothing and built themselves up into owning a restaurant. Then two, then four. Then came the stock market crash and the Great Depression. They lost everything.
And so starting at 12 years old, my dad began working.
The Depression passed. He joined the military. Went to war. Stayed after and met and married my mom. Came back and started a family. Realized the next step was to buy a house.
So he got a second job. He'd work 7 to 3, come home, shower, eat, then leave for his night job.
After a few years, he managed to save up the $3,000 down payment for a $12,500 house. The 20-year mortgage was through the G.I. Bill, with a 4% interest rate. He kept working two jobs so he could get it paid off early -- because that meant it would cost less in the end.
Every extra penny went into savings. Other families got color televisions, sometimes in several rooms. We made due with the one black and white. Other kids got lunch money. We got lunch bags. Other people bought books. We went to the library twice a week. Other kids got new toys seemingly every week. We got told that we could buy anything we wanted, once we saved enough of our allowance to buy it, and on the condition we banked half of it every week -- and that could not be touched.
If the house needed plumbing, he did it. If the house needed wiring, he did it. Same thing if the car needed fixing. If he couldn't do it himself, he always had a friend who could, and he would trade off by working on the other guy's house.
Oh, and he re-paved the driveway.
Growing up, the family had exactly two cars, one after the other. Each lasted about 10 years. When I asked why our car didn't have power windows like everyone else had, he snarled, "Just another goddamn thing to go wrong".
In that same 18-year period there was one refrigerator, one stove, one washing machine, one clothes dryer, one stereo hi-fi and one phone. When they went on the fritz, he would call the repairman. There was no need to waste money on buying something new.
Along the way he added value to the house. Built a front porch. Built a back patio. Paneled the bedrooms (real wood paneling, not the faux stuff). Re-plumbed the bathroom. And it was always with materials he connived from construction sites which would sell their unused materials at dirt-cheap prices -- sometimes for just hauling it away.
When I was 16 he arranged for my first summer job -- a gardener's helper for the Department of Water and Power in LA. By the time I was finished with that job, along with the years of saving my allowance, I had $1250 to buy a car.
My dad had taken me to the car lot. Sent me in to negotiate the deal. They told me it would cost $1450. I went back to my dad, and asked if I could borrow the extra $200. He replied, "You're out of your fucking mind". We went back in. He asked how much the car was. The salesman replied $1450. My dad looked at him and said, "You're out of your fucking mind".
We stood in silence for a moment, which my dad broke by saying "The kid's got $1250. Take it or leave it and if you say anything but the word 'yes' we're leaving and never coming back". And then he growled his favorite threat, "I got no time to honk around."
The salesman acquiesced. My dad pressed, "Including tax and license." I drove off the lot with my first car, and it was brand new. Yes, it was a Ford Pinto, but it was mine.
And it was paid for.
Which is something my dad drilled into me my whole life.
Oh sure, along the way he opened a few credit accounts, for convenience. But he never used a credit card to buy more than he could pay off by the end of the month, and so -- except for the house -- never once in his life paid any interest.
Never. Once. In. His. Life. Paid. Interest.
The money my dad didn't spend went straight into the bank. When there was enough saved it went into an interest-paying bond or certificate -- provided it was fully insured by the government.
And he still worked two jobs.
The jobs he worked were all blue collar or menial. Ditch digger. Security guard. Bill collector (which he did for most of his life).
I was well into my twenties before I found out how much money he had managed to save over the decades, when he retired with full pension at age 54.
He had $600,000 in the bank. But he was living no differently than when he had scrimped and saved to get that first $3,000 down payment.
Then my parents sold the family home -- which they had paid off after 12 years, not 20 -- for $150,000.
They moved to the Sierra foothills and bought another home. For cash. My dad then bought a new car -- for cash (but only because the old car was finally unrepairable). It was the third car I had ever known him to own, and the last.
Other than that, the money stayed in interest-paying bonds and in certificates of deposit -- as long as they were fully insured by the U.S. Government. He would take the interest payments and buy more bonds and CDs.
He died four years ago. My mother continues his example.
I've thought a lot about my dad -- and his generation -- this last few weeks. About a generation to whom building savings was all, and how those savings were used by the banks for investments that would return profit enough for both the bank and to pay my dad's interest.
And how that simple system built the most prosperous country in the world.
I've been thinking about him, and how the finances of this country have now become a house of cards built on people buying what they cannot afford by borrowing money they cannot pay back, egged on and provided by banks giving money they do not have, backed by the mother of all Ponzi schemes of derivatives and swaps in which the last 'investor' (the one who loses all the money when the house of cards collapses) is now supposed to be us.
And the only conclusion I have come to, to paraphrase my dad... we must be out of our fucking minds.