Frugality Archives - Page 5 of 7

Retiring Wealthy On An Average Salary: The Story Of The Persevering Parking Attendant

Over the last few weeks I've posted several stories of average folks who were able to retire wealthy while making an average salary during their working years. There was an engineer who never made more than $50,000, but was thrifty and saved and invested regularly. There was the teacher who was frugal, and always saved. Then there was the social worker who helped a lot of people when she gave it all away at her death. Finally there was the secretary who got a little lucky, and bought stock in her company when she was young, and was able to sell it later on for more than a million dollars.

As I continue looking around the web, I'm amazed at just how many of these stories I'm finding. Regular people who started saving young, were frugal and by the time retirement came around, they were sitting on a fortune. Today I want to look at another inspiring tale, “The Story Of The Persevering Parking Attendant”.

The Story Of The Persevering Parking Attendant

Earl Crawley, 69, is a parking lot attendant at the Mercantile Bank in Baltimore, Maryland. Mr. Earl, as people call him, only makes $20,000 a year, but yet has been able to amass a portfolio worth over $500,000, have a paid off house and have no debt! While it may not seem like a ton compared to some others we have profiled in this series, I think it's pretty amazing to do that on a $20,000 a year salary, all while raising his 3 kids and sending them to Catholic school.

So how did he do it? Mr. Crawley explains in a Q&A he did for Kiplinger's:

Soon after I started working for Mercantile Bank in Baltimore 44 years ago, one of the bankers took me aside and told me I didn't have enough education to go very far at the bank. He suggested I invest in stocks.

How did you learn how to invest?

I really didn't know enough to be scared. In school I was considered a slow learner — dyslexic, it's called now. My true gift from God is my ability to listen, and that's how I'm able to ask questions and use tips from the brokers, financial planners and bank customers I see every day.

Mr. Earl knew enough to know that he didn't know enough about investing, and that he should get help from those who DID know. He talked to the people in the know, and because he listened and learned well, he prospered. So how did he get started, and where did he get the money to invest when he didn't make a ton?

I did it with good old-fashioned nickels and dimes. My mother taught me how to budget, which made me appreciate how a little money can grow. I saved what I could from odd jobs, such as lawn cutting and window washing, that I did in addition to my day job. I used that money to buy one share of IBM stock back in 1981.

I really like what Mr. Earl did. Despite making a small salary, he worked hard. He got side jobs that allowed him to create a little more margin – enough to invest. In some respects that's what we're doing at our house, investing and saving the income from side jobs and side businesses in order to get ahead.

Since he's been successful, Mr. Earl now finds people are looking to him to get help.

We've heard that you're helping others invest.

I started an investment club at my church. And I've been coaching a couple of young men, such as bar-and-grill cook Antawn Davenport and Dana Mouse Smith, who toured with the late rapper Tupac Shakur. They can help spread the message that people can do whatever they set their minds to do.

I love the fact that Crawley is now helping others of meager earnings, like the cook, to get ahead, and spreading the gospel of compound interest. It's stories like his that give me hope that others, including myself, can appreciate the power of compounding returns, and be successful – at any salary.

Here's a pretty well done story done on Earl Crawley for the PBS Show MoneyTrack:

Retiring Wealthy On An Average Salary: The Story Of The Saving Secretary

By Mr. Money 5 Comments

This post is another installment in our recurring series, “Retiring Wealthy On An Average Salary“. To see the other installments, please click on the link in the navigation bar above. The idea behind the series is to highlight the stories of average folks who made good decisions in order to be able to retire wealthy – even though they made an average salary during their working years. The hope is that it will help to inspire the rest of us as we continue on our own journeys of building wealth.

Today I want to highlight the story of one woman, who flew under the radar much of her life, only to give away millions of dollars when she passed away. I'm going to call this one “The Story Of The Saving Secretary”.

The Story Of The Saving Secretary

Grace Groner was a simple woman who lived a frugal lifestyle. She never owned a car, and shopped at rummage sales. She worked for many years as a secretary, and only after she passed away did people realize that she was a multi-millionaire.

She lived in a tiny one-bedroom cottage in Lake Forest, Ill.She bought her clothes at rummage sales, didn’t own a car and worked most of her life as a secretary for a pharmaceutical company.

Yet after her death at age 100, Grace Groner left Lake Forest College a gift of $7 million to be used for scholarships. The money came from three shares of stock she bought–and held on to–in 1935.

“She did not have the (material) needs that other people have,” William Marlatt, her attorney and longtime friend told the Chicago Tribune. “She could have lived in any house in Lake Forest but she chose not to.…She enjoyed other people, and every friend she had was a friend for who she was. They weren’t friends for what she had.”

Ms. Groner seemed to have plenty of friends, but they were close friends because of who she was and not because of what she had. Many of them didn't even know how much she had. Her lifestyle didn't really give any clues to the fact that she was wealthy.

While Ms. Groner did end up retiring wealthy, how she did so may not be something we would necessarily want to emulate. In some respects she ended up being very lucky.

Ms. Groner’s story might seem like a classic Millionaire Next Door fairy tale–the thrifty, conservative, hard-working saver who hoards pennies over a lifetime to accumulate vast wealth. And that is certainly part of the story. Aside from occasional trips, Ms. Groner was rigorously frugal due to her Depression-era upbringing. (Not having a husband or children may have also helped her savings rate.)

Yet the way Ms. Groner garnered her wealth was, in fact, more like one big, lucky gamble than a lifetime of scrimping and saving.Ms. Groner worked for 43 years as a secretary for Abbott Laboratories. In 1935, she bought three specially issued shares of Abbott for $180. She never sold a share, even after repeated stock splits. She also kept reinvesting the dividends. By the time of her death, she owned more than 100,000 shares valued at about $7 million.

As David Roeder of the Chicago Sun-Times points out: “It is a grave error to put your nest egg behind a single company, and it is worse when the company is your employer. Groner had a winner, but others have done this with Enron, General Motors or Bear Stearns.”The all-in-one basket strategy was, of course, a grave error for employees of Enron and others. And financial advisers love to herald diversification, which didn’t turn out so well for many investors during the financial crisis.

But Ms. Groner’s story shows that savings alone probably doesn’t get you to $7 million. It seems that loading up on a one single investment and getting tremendously lucky over a long period of time can get you there. But don’t count on it.

So basically she became so wealthy because she saved religiously, but especially because she bought 3 specially issued shares at $60 a piece back in 1935. She never sold the shares, and it doesn't sound like she diversified at all. In the end she was very fortunate that the company she worked for didn't have problems, because if it had she may have ended up losing her entire fortune.

While I wouldn't suggest others try to get wealthy in the way that Ms. Groner did, I still think her story bears out the importance of valuing relationships over money, of not buying things you don't need, saving and investing (although her specific strategy I wouldn't recommend).

What do you think about her story? What keys do you pull out of this story? Tell us your thoughts in the comments.

Take A Personal Day To Fix Your Finances

By Mr. Money 10 Comments

So often our lives get busy, and it can be hard to stay on top of all the detailed minutia of our financial lives. Things tend to slide, and we end up not having the optimal setup for anything in our finances because we just don't want to jump into the details. Since performing certain financial tasks can be a bit boring or mundane, it can be easy to just push off fixing things indefinitely.

This is why I suggest having something MSN calls a “personal money day”. A day dedicated solely to reviewing your financial life, and fixing the things that aren't optimized. Getting better rates on your insurance, finding higher interest rates for your savings, rebalancing your portfolio, switching TV providers, setting up a budget and a variety of other things.

So let's get started.

Getting Started: Focus On Fixing The Big Things

So where do you start when you've decided to take a personal day to fix your finances? At our house I decided to take a personal day when I was stuck at home one day because my car was in the shop being repaired. I had to take the day off from work anyway, so I decided to make it worth my while.

If you're considering taking a day off as well, I'd suggest trying to take a day off from work because a lot of the things you'll be doing – you may need to call a place of business to get details or a quote, so doing it during business hours will probably work better. It also puts a bit more pressure on you to get things done because you're paying a price – a vacation day – to do this.

I like to focus on the bigger things first to help maximize the return. Some of the things I might focus on include:

Insurance: Make sure that your homeowners, auto, life, disability and other types of insurance are all set to go, and that you've got good rates. If you don't have one of the types of insurance, consider getting quotes to transfer your risk. If you've got decent rates already, consider changing your coverage to save money. Reduce deductibles, or drop un-needed coverage.
Bank accounts: Consider closing accounts with fees attached and opening accounts with higher rates of interest, investigate the advantage of laddering. Find better rewards and less fees.
Credit cards: Get accounts with lower interest rates, especially if you are carrying a balance. Cash in any rewards you've already got on current cards. Set up a plan to pay off your cards.
Set up a budget: If you've never set up a family budget, consider doing that now. It's a lot easier nowadays with the advent of all the budget software out there.
Retirement planning: Over time your retirement account allocations can become skewed. Consider re-balancing your portfolio. If you don't have a Roth IRA, IRA or other retirement account, consider opening one at a discount brokerage or mutual fund company on your day off!
Find better deals for utilities and services: Cancel cable or satellite TV and sign up for a cheaper alternative, or watch TV for free via your computer. Look into cheaper home phone and cell phone alternatives.
Cancel services you don't need: Signed up for cable TV but you don't watch? Have a gym membership, but don't go? Cancel the un-necessary expenses!

What I Did On My Personal Money Day

On my day off (a while back now) I focused on a couple of areas that I knew were long overdue for a look-see. I began by looking at my car related expenses, mainly auto insurance. I submitted online quotes for a bunch of different companies and to my horror realized I was overpaying on my insurance to the tune of almost $1100. I quickly switched, started paying less for the same coverage.

Next, I looked at homeowner's insurance. I found that by switching I could save another $200, and still have the same coverage.

I also looked at our savings account which was holding our emergency fund and realized that our bank was paying us next to nothing in interest. I researched some online savings accounts and signed up for one of the ones with the highest interest. This ended up meaning a few extra hundred dollars in interest every year.

So on my day off, even just looking at a few things, I ended up saving almost $1300/year. Not too bad of a return!

Conclusion

These are just a few of the things you can look at on your personal money day. It may not be the most enjoyable day you've ever had, but in the end you’ll be glad you did. It can end up saving you hundreds or even thousands of dollars. And who doesn't like having extra money to help pad their bottom line?

Have you taken a personal day to fix your finances? What types of things did you look at? What things did we miss that people should consider looking at? Tell us your thoughts in the comments.

Retiring Wealthy On An Average Salary: The Story Of The Sensible Social Worker

By Mr. Money 7 Comments

This post is part of a continuing series called “Retiring Wealthy On An Average Salary” that looks at the inspiring stories of men and women who earned average salaries during their working years, but in the end retired wealthy, with plenty of money to spend and give. In fact, I've found that as I read more of these stories, these frugal investors also tend to be very generous people, giving away a huge chunk of their fortunes after they pass.

Today we have another story of someone who lived a frugal lifestyle, and was able to retire quite well off. Her name was Jane M. Buri, a St. Louis social worker.

The Story Of The Sensible Social Worker

When I read the story of Miss Buri – the social worker, one thing that struck me is that it sounds like she lead a pretty full life, despite the fact that she was so frugal. She frequently socialized with friends, and was very involved with her church. It also talks about how she allowed herself to have small indulgences like a trip to Europe, and a visit to the Rose Parade. She didn't live without, but she was frugal.

Jane M Buri, a school social worker, spent nearly four decades fighting to keep kids in class.

She tracked students to their homes, found them shoes, meals, jackets, and returned the truants to their teachers. She never married, never had children, never missed a day of work.

All the while, she was quietly building a small fortune. Buri died at 84 with $1.4m to her name.

Then in death, as befit her life, she gave it all away.

The last checks from her savings – willed to more than 50 friends, cousins and charities – should be arriving soon in mailboxes.

She gave to African missionaries, Legionaries of Christ and Catholic schools for the Sioux and Cheyenne. She donated to her high school, college and graduate school, to the south St Louis parish she visited thrice weekly, the Alexian Brothers nursing home where she volunteered, and the disabled friend she took to the discount grocery store every Friday.

How did she amass such an estate?

“It beats me,” said old friend and co-worker Genevieve O'Hara Brueggemann. “And it beats everybody who knew her.”

In retrospect, friends say Buri's savings made sense. They say she drove a 30-year-old car, watched an ancient TV, lived four decades in a house bought with cash in 1969 and just kept stacking charity donation envelopes in her sun room, until, once a year, she sent them all in.

They say she gave of herself and asked little in return.

Nobody's disputing that generosity. But it's not the whole story.

Because this isn't about someone who selflessly saved so others could have.

It's about someone who saved because spending more just didn't occur to her.

It seems as if so many of these closet millionaires are able to amass a fortune because living a frugal lifestyle comes as second nature. They're able to live with less, even still while enjoying some of the finer things, while allowing a lot of other things they don't need, that others might have bought, to pass them by.

Buri was a child of the depression, which may help to explain her frugal lifestyle. She did it out of necessity first, but then by habit.

Buri grew up in the packed city neighbourhoods of the Great Depression.

Her father ran a cigar shop in downtown St Louis. Her mother was a prim, fancy-dressing woman.

Buri was their lone child. They protected her, family members said.

“Nobody had too much money,” said Jack Goettelmann, Buri's cousin and her last relative in the area. “And all they did was try to improve.” Buri clipped coupons, her cousin said, because that was how she was raised.

As mentioned, she didn't deny herself when she wanted something.

Nor did she deny herself small indulgences. Some weeks, she ate out three meals a day, friends said. She traveled to Europe, and to the Rose Parade in California. She bought a baby grand piano.

There was nothing she wanted and didn't buy, said Brueggemann, the co-worker.

“She was frugal because she didn't need anything else,” she said. “She wanted that old car. She dressed the way she wanted to dress.”

When she passed away Miss Buri left an inheritance to many around her including missionaries, school associations, friends and family. In life she had realized that happiness doesn't come from money, and in her death she was able to continue giving to those around her and leave a legacy of caring. I can only hope I do as well to follow her example.

Retiring Wealthy On An Average Salary: The Story Of The Altruistic Educator

By Mr. Money 3 Comments

Last week I published the first post in a series I'm calling “Retiring Wealthy On An Average Salary”. The series is intended to give us a brief glimpse into the lives of some average people who made average salaries, but still managed to retire with a net worth that we would say makes them wealthy. My intention in writing the series is to help people realize, you don't have to be a celebrity or a doctor in order to retire comfortably. Instead, you just have to work hard, have a plan, and save and invest diligently.

Last in this series, we told the “Story Of The Thrifty Engineer“. This week I want to talk about the story of a thrifty teacher who was able to save a fortune on a teacher's salary, and later give it all away to help others.

The Story Of The Altruistic Educator

Edna Diehl, was a Davison, Michigan woman who spent almost 3 decades as a teacher and counselor at the city's high school. She was known to be a serious educator that didn't take any nonsense from her students. She pressed them to succeed and do well in whatever careers they pursued. Former students have also stated that she had a soft side, and showed how she cared deeply for them and wanted them all to do well in their lives.

Edna and her husband (who had no children) were also careful with their income, and made sure to save and invest their money regularly over the years. The result was that they had amassed a fortune of well over a million dollars by retirement.

Instead of spending all of that money as some might have done, Edna decided that once she passed her fortune would be used to fund college scholarships for the district she had taught in.

DAVISON, Mich. — A woman who spent 29 years as a teacher and counselor at the city high school has left $1.3 million to the school district.

Edna Diehl died in July at 88. The Davison Educational Foundation will hold the money in trust, with the interest to be used to fund scholarships.

The district expects the interest will generate about $60,000 a year, paying for two years' worth of college for five students every year, said Kevin Leffler, a school board member and foundation president.

Diehl and her husband, Ben, who died in 1997, had no children.

She was known as a serious, sometimes even strict, teacher at Davison High School. Former students said she cared deeply and wanted them to succeed in life.

“She was pretty serious most of the time. But she could also be fun outside of school,” Connie Olejniczak, a student during the mid-1960s, told the Flint Journal.

Diehl was known for her ability to raise money for student trips, colleagues said.

“I remember her having to count money all the time,” said Dick DeLoge, a retired teacher who worked with her for about five years.

Davison is 50 miles north of Detroit.

I'm sure it must have been a wonderful feeling for Edna to be able to give such a wonderful gift to the students of her district as she did. Being able to give $60,000 a year in scholarships is no small feat, and her hard work and forethought will mean a college education for many hard working students in her district.

How Can Even A Teacher Become Wealthy?

So how does someone become wealthy on a teacher's salary? Education experts Mark C. Schug and William C. Wood offer their advice to teachers in an article on beyond-the-book.com. Their 3 rules for teachers:

Start Early: When you start saving early you have the benefit of having more time to enjoy the wonders of compound interest.
Buy And Hold: Spend less than you earn, and don't go into debt. Save your money, and purchase investments, and then don't touch them. If you withdraw your money you short circuit the gains you might have made due starting early and the wonders of compound interest.
Diversify: Don't put all your eggs in one basket, in other words, don't have all your money invested in one – or only a few stocks. Instead diversify your holdings via low cost mutual funds.

They say that since teacher salaries start lower than some other professions, it is doubly important that they start earlier than others. I think their advice would be applicable to most of us, however, not just teachers. Start early, invest regularly and make sure you are diversified.

What do you think? Does the example of the altruistic teacher give you hope that you could do the same? Do you think it's possible to become wealthy on an average salary? Tell us your thoughts in the comments.

Retiring Wealthy On An Average Salary: The Story Of The Thrifty Engineer

By Mr. Money 4 Comments

A couple of times on this site I have profiled millionaires who became rich through hard work and determination, and I talked about how and why they were able to rise to such success.

While those stories can be inspiring, sometimes they can leave us average folk thinking that dreams of becoming balance sheet affluent are beyond our reach because we aren't able to create a six figure income or become wealthy within a few years.

This week I decided to start a series of posts looking at the stories of more average folks who, despite making an average salary during their working years, retired wealthy and were able to help out a lot of people when they died. I'll call this series “Retiring Wealthy On An Average Salary”.

Today I want to look at the story of Jimmie Dean, the thrifty engineer. (not Jimmy Dean the sausage magnate, who also has a great story and who we profile here.)

The Thrifty Engineer

Jimmie Dean was an engineer, who was raised in a family of modest means – in Washington County Oklahoma. He believed in hard work, individual responsibility and education, and that through those things a person could achieve their goals and dreams. After serving honorably in the Navy, he worked as an engineer at Phillips Petroleum for 33 years. While he worked hard and with distinction, he never made a six figure salary. The most he ever made was around $50,000 a year. Even with such modest means, Jimmie was able to leave a substantial amount of land and money to his family, and still have enough to create a 2 million dollar scholarship fund for Oklahoma college students. How did he do it? Through being “frugal with his money” and investing in mutual funds.

A thrifty engineer from Oklahoma who died with $2 million and has set up a scholarship foundation.

Jimmie Dean (not to be confused with the sausage magnate) worked for 33 years as a technician at Phillips Petroleum. The most he ever earned was around $50,000 a year.

But he scrimped and saved and invested in mutual funds. When he died in 2008, he had more than $2 million in the bank. His bequest was to set up a scholarship fund.

“He did it through being frugal with his money,” said Mr. Dean’s nephew, Bob Boyd, who now runs the Jimmie Dean Foundation.

The foundation is handing out scholarships of as much as $10,000 to students who show hard work and a commitment to remain in Oklahoma.

Granted, $50,000 a year in Oklahoma is decent pay. Mr. Dean was married only briefly and had one son. Still, getting to $2 million on a $50,000 a year salary is worth noting.

And at a time when giant philanthropists like Bill Gates and Warren Buffett get so much attention for their largesse, it also is worth celebrating the little-knowns who saved all their pennies over a lifetime only to give it all away when it was over.

It just goes to show that even if you aren't making a six figure income, you can still retire with a nice nest egg if you're willing to do the hard work, be frugal, save and invest.

Does this story of living on an average salary and retiring wealthy help you realize that you could retire comfortably as well? Tell us your thoughts in the comments!

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