My Rich Grandpa’s Money Worries Turned Me Into an Investor

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Every one of us has had “aha! moments.” Epiphanies. Days when we reach a crossroads and realize that we have to make some changes. For the next two months, we’re sharing moments like those in our Life Stage Lessons series: Real stories straight from the financial lives of our DailyFinance contributors about times when they realized they were due for a serious course correction. So read on, learn from our mistakes, and get inspired to improve your relationship with your money.

I have my late grandfather to thank for inspiring me to learn about investing. He was raised in a family that literally couldn’t afford windows on the exterior walls of their house, yet he built a company that sold in the early 1990s for a seven-figure sum.

I wish I’d known him as a younger man. Being able to work alongside him, witness his decision-making skills, and marvel at his ability to react to business changes would have been a real treat.

But that’s not how life works. The person I got to know was not a hard-driving entrepreneur, but a gentle, sweet and loving old man. He was an incredible grandparent who was generous with his time and love, but I also remember that he was constantly worried about money. What’s perhaps more important is that the worries got more severe as he aged.

Living the Good Life

Like many small-business owners, grandpa knew how to create wealth, but he didn’t know how to manage a sum for the long term. Spending was never an issue during his working life, because his business, in effect, bailed him out. I remember learning of him buying a house and a luxurious sports car for cash almost at the same time during the 1980s, a feat most people could only dream about. But as years went by, the high-end sports cars gradually gave way to high-end sedans, and ultimately to mid-tier sedans.

His reductions in spending weren’t because he ran out of money. My grandfather was relatively frugal. He lived below his means, and still had plenty of money when he passed away. He left enough assets to pay for my grandmother’s continual nursing care for two decades now — and for the foreseeable future.

Still, seeing his situation play out was a real eye-opener for me as a teenager: Why would someone as successful as grandpa ever need to worry about money? I spent a fair amount of time thinking about it as a young man, but it’s clear to me now that the answer was his lack of real knowledge about how to grow capital, and how the financial markets work.

Like many members of their generation, my grandparents stuffed pretty much all of their savings in a bank account and considered themselves investment geniuses when they bought a bunch of Certificates of Deposit. In the 1990s, that strategy worked out OK since interest rates were in double digits. But between decades of declining rates and dwindling interest payments, and the need to draw from his principle to pay for living expenses, he no doubt foresaw how rapidly his nest egg could erode.

Opportunity for Retirement Planning Missed

If they’d had a sensible investment plan, grandpa could have relaxed, knowing there was little chance they’d ever run out of money. After all, with a properly balanced portfolio, following the conservative “4 Percent Rule” would have allowed them to spend a six-figure sum every year, a level they never actually came close to hitting after retirement.

Because my grandparents had no one guide them to a financially comfortable retirement, they missed some huge opportunities, and gained unnecessary stress. Not that they needed to spend more, but being able to see his portfolio grow would have been a comfort to grandpa. However, if there’s a silver lining to be found in this story, it’s that his situation prompted me to get educated about investing early on. Along the way, I also learned of the beauty in saving and letting time work its compound-growth magic.

I’m happy to say that, though I’m only in my 30s, I’ve already amassed a tidy sum over two decades of saving and investing. Without even knowing it, my grandfather may have proved to be the most important influence in my financial life, simply by showing me that slow and steady wins the race.

Thank you, grandpa. I miss you, and I will always remember the lessons you taught me.


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