by Scott Pape - July 2nd 2010
I bought my first shares in a company well before I got my first pimple. My father, a hard-working bloke from the country, was fascinated by the stock market yet never had the opportunity to really study it.
So in the fine tradition of Serbian tennis fathers, my old man ever so delicately fostered my fascination with investing. He-Man cartoons were OK – but I’d pass up the semi-naked superhero with the blond bob to watch the dashing Terry McCrann on Business Sunday each week … while I read the business pages of The Sun.
For the record, I’m eternally grateful that I tossed the Tonka trucks and found my passion at a super-young age. My parents were directly responsible for helping me with this. Here’s what I remember hearing from them as I grew up:
‘Do you think I own a power factory?’
This was one of my old man’s favourite lines. He must have said it a million times, which means that I must have left lights, heaters and TV sets on a million times too.
Growing up, it appeared to me that he was obsessed with preserving each kilojoule of energy. It would be fashionable to say he was teaching me to be a passionate environmentalist – but Dad is somewhere to the right of Andrew Bolt. What he was doing was showing me (with his own version of the Chinese water torture technique) the value of a buck.
‘Jarrod’s jumper looks good on you’
I count myself incredibly fortunate to have grown up in the small town of Ouyen, and even luckier to be part of a strong, loving extended family. I had so many cousins that we could have fielded a couple of football teams.
Even better, I was in the middle in terms of age, so when my older cousins grew out of their clothes I scored some cool hand-me-downs.
‘Be your own boss’
My family has always been in small business. There are distinct disadvantages to working for yourself – long hours, tough business conditions, and a heap of hard work.
But that could never outweigh the freedom of being able to see my parents whenever I wanted. It also enabled me to follow them around, work in the business, and learn the value of building something tangible.
As I’ve moved into my own business, I’ve found that the employees who grew up within a family business tend to be better, harder-working employees.
‘Don’t get in over your head’
My parents were always very conservative when it came to debt. It probably worked against them, given the 20-year bull run that was about to unfold.
But they placed a premium on owning their own home outright, and a lot of that has rubbed off on me. At the stage of life I’m at now, I’ve had to go into debt to own my own home. But, like my parents, I look forward to the day (soon) that I’ll have my banker off my bank.
‘Start investing now’
I’ve previously written about buying my very first share in BHP at a young age. That sparked my interest in money-making and led to paper rounds, pamphlet deliveries and trolley collecting to earn more so I could invest more. My best investment in my school years, however, was reading finance books at the back of art class – I was more interested in the art of investment.
In the end, I was shaped by my parents’ practicality when it came to money. We all know that our loved ones mould our behaviours – especially when it comes to money. Perhaps your parents taught you the value of a dollar, or maybe they taught you what not to do? So this weekend jump on our news limited blog and share what your parents taught you!
Photo: http://www.flickr.com/photos/ciadefoto/3019776218/
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6 comments
Im with you on a lot of that Scott. First shares where CBA when they first were launched. My dollar a share investment then has since bought a car and paid a 5% deposit for my house (early last year before deposits where necessary) and I still have a couple of hundred shares there (thanks to reinvestment). Not bad for an initial $1,000 investment (no I wasnt rich, that was my inheritance from my Grandfather, by brothers bought cars, I bought shares, guess who was better off long run)
I was raised in a single parent household on a pension so I learnt a lot about fugil. Best lessons from Mum:
* Freezers are your best friend. Buy in bulk, plan ahead and eat like a king. $50pw is an expensive week for me for groceries.
* If you are cold, put a jumper on. My unit is 100% electric and yet my largest electricity bill to date is $180. Heater only goes on if I am still cold after I have winter clothes on and its all thermastat controlled and set at 15C (its Canberra, trust me it gets below that regularly 8( ).
* Pre-pay your bills and get no nasty surprises. Every pay I pay a set amount to all my electricity, my phones and my health insurance. Im always in the black and because its an automatic payment from my bank account on payday, I dont need to think about it. All the money in my account is mine. [I also have automatic payments for my home loan]
* Save for a rainy day. Yes I have a mojo account. I have set up my salary to automatically send $100 per pay into my Ubank account and have forgotten about it. It is not to buy anything, its there for that rainy day. And as Mum says, “If weatherman cant predict the weather, what makes you think you can predict your rainy day”
These are just a few of the best lessons I learnt from Mum, now money lessons I learnt off my father.
* Gearing only works if you have income to offset it against. He went from being a part time property mogel to renting and struggling in less than 6 months in the recession we had to have. What happened? A successful self employed architect discovered that everyone, including his biggest contractor, the government, takes longer to pay their accounts in a recession. Without money coming in he didnt have the funds to cover the short fall between the rent coming in and the costs associated with having heavily mortaged rental properties. He tried selling a couple to cover the short fall but unfortunately the property market had dived at the same time. He went from over 10 properties to zero within 12 months to clear his obligations to the bank and keep his business afloat.
*Your never too old to start again. Dad's “retirement” is definately different from what he planned in the 1980's. He is now 74yo and still works full time, as a lecturer now so he has guaranteed income. 2 years ago he bought himself a place to live in which he is taking advantage of the governments incentives for seniors to work longer to pay it off more quickly. If he can remain working till 76 then he will have sufficient paid off that with sharing his place he can afford to stay there on the old age pension and his little bit of super. Goal is so that when he needs a retirement home, he will have enough equity from the sale of the house to cover the deposit so he doesnt have to go to a government supplied bed (note to all who may not release it, government supplied beds tend not to be where anyone really wants to spend their final years!)
Thanks to both parents I have learnt fugil and conservative may not see you become a “millionaire in just ten year” but it also wont see you wondering where your next meal is coming from. I would rather sacrifice the first option to ensure the second.
One mistake can get me grounded when I was a child, i still can't forget those times LOL!!! but as I grow up little by little I understand why did they do that.
Im a parent and i want my children grow good and very discipline. The way of my discipline lot in the room and sarmon. Did I do the good way?
Good point! Thanks for sharing! We are now thinking of a way to switch the oven off completely when we’re not using it (is has a display with a clock, which of course always uses a little energy). Annoyingly, the power socket is at the back of the oven, and we can’t reach it without taking the oven out of the cupboard.
Cheers!
Good point! Thanks for sharing! We are now thinking of a way to switch the oven off completely when we’re not using it (is has a display with a clock, which of course always uses a little energy). Annoyingly, the power socket is at the back of the oven, and we can’t reach it without taking the oven out of the cupboard.
Cheers!
My parents put me on pocket money from an early age, but made me earn by doing housework. They were always in debt and we went through some very hard times when my dad lost his job during the recession in 92 and made the difficult decision to start his own practise. Though we knew our parents were not well off, they did their best to make sure we were never disadvantaged compared to other children.
The resounding lesson from my parents was to be resourceful and use what you have rather than buying more. Mum could make 101 meals from mince and a few vegetables. Dad taught me that you have to work hard for the things you want, but once you get to your goal you shouldn't deny yourself that reward.