I grew up in a well-to-do family as a minority in the United States. This created a very interesting dynamic for me. We lived in a predominantly white town where the majority of inhabitants were CEOs, bankers, lawyers, and politicians. My father was also famous so that added to the allure of our family’s wealth.
Initially I never really knew how much money my parents had. I just assumed that it was enough to have our basic needs met and a couple toys here and there. We never lived lavishly. We drove domestic cars, dined at mildly expensive restaurants, and vacationed once or twice a year. We never owned more than one house and when we vacationed we would always rent out a nice home for a week or two. The house we lived in was modest for the US with only four bedrooms, a two car garage, and other basic necessities.
Nothing about us screamed money; whereas other families in our town were obsessed with status symbols like S-Class Mercedes, A-8 Audis, and 7-Series Beamers. Those are the ultimate “I made it” vehicles for the upper-middle class, mildly wealthy individuals. To be clear by mildly wealthy, I mean millionaires.
Occasionally we would eat at five-star restaurants, stay in five-star hotels, and travel abroad but by no means was our lifestyle lavish. As there are different levels to richness, our wealth was nothing compared to the billionaires we see in today’s modern world. But it’s all relative I suppose.
My dad’s frugality was the most striking thing about him. He grew up relatively poor, but not dirt poor. His financial habits that were ingrained in his youth followed him into his adulthood. He eventually began to make millions, but nothing about him changed.
We never moved into a bigger house and we certainly didn’t start driving super expensive vehicles—although we had the wherewithal to do so. He was very good at hiding his wealth. Anytime the subject of money would come up he would say this famous phrase that I still hear him say today, “I ain’t got no money.”
Let’s think about that grammatically incorrect phrase for a moment: (it’s really just slang but since this is Quora I thought I would point that out). My dad wasn’t the brainy type so his English was never super proper. He was one of those common sense, success driven people that relied on core values like hard work and persistence—not necessarily intellectual prowess.
Mom: “Honey let’s take a vacation with the kids this summer—maybe we can take a trip to ______ for 10 days.”
Dad: “I ain’t got no money for that.”
Mom: “Honey let’s stay at the Ritz Carlton this weekend and see a Broadway show like old times…”
Dad: “I ain’t got no money for that right now.”
Mom: “Honey, your son would like _____ for Christmas. Let me use the credit card tonight…”
You get the picture.
As I became older I began to realize what he meant by that simple phrase. It was never that he didn’t have the money. He lived below his means. He never wasted money on superfluous luxuries because that wasn’t his style. When you work hard for your money, parting ways with it is a lot harder than earning it through some miraculous windfall or inheritance.
For all I knew, we could’ve been billionaires and I would’ve never known. I just knew that my needs were met and I could have whatever I wanted—within reason.
When his business was flourishing, we were more financially free because we could write off a lot of miscellaneous purchases as business expenses. During that prosperous time he was still frugal, but he wasn’t nearly pinching as many pennies as he later began to do once he sold the business. Most of his wealth came from the business so once that was gone he no longer had his “cash-cow” per se.
Our standard of living didn’t change much at all once the business was gone; but his thriftiness increased dramatically. The things that did change were minor like eating out once a week instead of three times. Or taking one vacation instead of two. He just cut back on his expenses like any financially sound person would do.
But mostly everyone in our town thought that we were super rich because of his fame. Even though we didn’t live in the largest most extravagant house, most people knew we had something. When I was younger I would remember kids asking to come over because they assumed I had an indoor swimming pool or a full basketball court. They were mistaken. It was very strange having to explain to people that we didn’t just buy everything in sight.
Five years removed from his flourishing business career and I saw some of his tax forms for the first time (because I was applying to grad-school). His reported income while technically unemployed was $350,000 (I didn’t look too deeply into the source of income…but I assume it was from capital gains from investments or sold stock).
During that year you would’ve thought that he was barely making $50K according to the way he lived and carried himself. After the business was gone I would hear him say, “I ain’t got the money like we used to” daily.
The $350K he reported was most likely on the lower side of what he actually made because he didn’t want to have to pay for my grad-school education. If $350K starts to make someone nervous I don’t want to even think about what amount it takes to make them feel comfortable. I genuinely believed growing up that we were middle-class. That is how we lived and that is how we were taught to behave.
I eventually asked some financial advisors about socio-economic class structure in the US and they expressed to me that making between $350,000-$400,000 without a main source of income is very well above the middle-class. Again that was after his business was gone, and during a period where he lamented over the fact that he didn’t make nearly as much money as he used to. Or simply, “I ain’t got no money.”
To answer the question:
I am not terribly old as I’m writing this. My childhood is not too far away from where I am today. But I will always live below my means no matter how much money I end up making. I will never try to keep up with Joneses. We were safe during the recession while other families who were living way above their means had to skip town or downsize in order to stay afloat.
Even after my father sold his business he was still living comfortably and that was because of his healthy financial habits. I know intuitively that being around such a frugal person helped to instill a sense of thriftiness in myself. When I do have kids, I will not warp their thinking by letting them know the real extent of my finances until they’re ready. Good financial habits are rare these days; so I am fortunate to have grown up in such a household where money was put in its proper place.