This past weekend I was in Florida along with much of my extended family and my whole immediate family to celebrate my Grandfather’s 90 birthday. I thought I would dedicate a special blog entry to him, since he is one of my regular readers. So a few economic lessons I have learned from him as demonstrated over the weekend.
1.Insurance is good, but it should be there for major disasters not minor ones. When I arrived at the rental car counter they offered me insurance for the weekend for $20. I have a $250 deductible with my own auto-insurance company. I thought there was a less than 1/13 chance I would get in accident, so I declined it. Here is a decent article on when to get insurance for your car rental.
2.Over the long run the stock market will tend to go up. Even over a weekend where the market was way down, my Grandfather was thinking and researching about his next stock picks. He is still active in the market, but not a day trader.
3.Invest early and often and save more than you earn. My Grandfather has some good stories about preparing taxes and financial advising for some of the local “wealthy” people in his home town. Acting like you have a high income does not always indicate you are wealthy. You have to save early and often to take advantage of long term growth.
4. Personal Finance guru Dave Ramsey has a saying about how by saving you can change your family tree. My grandparents are a great example of that. They had saved enough to help put not only their four daughters, but also help their six grandchildren through college. By leaving college with zero debts and a decent savings, I will be better able to help my own children and grandchildren through college. So by saving I know my grandparents have helped their great-great grandchildren.
Happy Birthday Grandpa!