I got some advice years ago from some little old ladies from a small town in downstate Illinois.
Always being open to excellent advice and always willing to learn something new, I thought that I would learn a thing or two from these ladies from Beardstown.
I purchased and read two books last year in an effort to learn something from them, but I really did not. The books were The Beardstown Ladies' Guide to Smart Spending for Big Savings: How to Save for a Rainy Day Without Sacrificing Your Lifestyle
and Beardstown Ladies' Common-sense Investment Guide - How We Beat The Stock Market - And How You Can Too
hoping to pick up some mensch-like wisdom from these sweet little old ladies.
I just learned that these ladies actually earned a much lower return than they claimed to have made in these books. Whoops! Someone typed in the numbers wrong according to an L.A. Times report on them way back in 1998.
The ladies from Beardstown, whose average age is 70, said the error stemmed from a mistake they made while typing data into a computer program.
"We feel very badly," said Ann Brewer, a club member. But not so bad that she would not enjoy her share of the massive royalty payments made on these books.
Regardless, I was not looking to these little old ladies for stock tips. Tips given by anybody that many years ago would be obsolete and pointless at this time. In 2018, their investing advice and stock picking advice from 1994 is, in fact, severely outdated.
What I do glean from some of the older books that I read is timeless advice. As I have previously written, human nature does not change much and great advice from one hundred years ago is still great advice today and will likely still be one hundred years from now.
Here's some takeaways from the little old ladies from Downstate.
Goals
Like every self-improvement book that I have read including the one that I recently read by Coach Holtz, the ladies advocate setting goals.
The ladies told you to visualize yourself in the near future. What about in ten years? Where do you want to live? What are you going to be doing? How much is that likely to cost?
After asking yourself these difficult questions, it is tome to come back to earth and make a list of your goals for the future. Though they should be guided by your dreams, this is a time for prioritizing and pruning, as the ladies say.
You are more likely to realize your ambitions if you choose goals that are practical.
Pay Yourself First
This is like a broken record to me. Like most of the financial books, magazine articles, blog posts and everyone that I have spoken with about it repeats this mantra.
I did it once this week already and am ready to pay my wife first next week, with another $500 to the Vanguard 500 Index fund.
The Beardstown ladies say not to let a month pass without investing in yourself. Each month, set aside your bills until you determine how much you can save and then pay yourself before you pay anyone else.
The little old ladies said it doesn't matter if it's only $5 or $10 to start. Yours Truly Money Mensch multiplies this by ten or twenty, so my advice is to send at least $100 to $200 per month if that is all that you can, but $500 or $1,000 (or more) per month is far better.
The Power of Reinvesting
The little old ladies advocate reinvesting dividends. I say Amen to that although in the cases of a few stock holdings in my E-Trade account, I have not enrolled in DRIP or their Dividend Reinvestment Program.
When it comes to our children's college accounts, my GNMA fund account and my wife's and my Roth IRA accounts, we have automatically reinvested all dividends for years and years.
From personal experience, I can tell you that it works. We now collect several thousand per year in dividends due to the fact that our number of shares has continued to grow for years, decades in some cases, allowing the dividend amounts to increase as our number of shares increases.
It is a beautiful thing and automatically reinvesting your dividends is a great way to ensure continued, steady investment growth over time and is one of the best and easiest ways to build up your portfolio.
Rewards of Investing
I enjoyed reading about how these little old ladies from a tiny rural town in downstate Illinois used some of their investing proceeds to renovate their homes, travel the world, help their children financially, help pay for their grandchildren's college educations and other things that they used it for.
After all, there has to be some future reward for automatically squirreling away money for years and years when you could be enjoying it in the present.
Case in point, Yours Truly. I drive one of the most beater cars in our entire suburb, we still own two tube TV's (and this is 2018), our family's smart phones are all pay-as-you-go and most of our furniture, and much of our house is falling into disrepair due to deferred maintenance and normal wear and tear.
I sure would like to have a lot more money to fix and replace what needs fixing and replacing, but I am committed to investing on my own and my family's behalf. I was taught to do so by my grandfather, who told me to do it often, and I regret not having worked a little harder at it in my twenties and thirties.
I have many regrets. But also many things to be proud of. As I continue to invest, one of my goals is to have both of our children graduate college with little to no debt. And good colleges, like the private liberal arts school that our son studies music at. He wrapped up his second year last month and is well on pace to complete college in four years. However, as a middle aged guy like me knows all too well, life has a way of throwing a few curve balls and wrenches in the way, so I will not hold him exactly to that. Also, I know that graduate school is in his future, as it is for most in music-related fields unless they become huge stars.
I would like to have a more tangible goal date to pay our house off. That is a post for another time. It would be nice to actually go on several great vacations per year. It would be great to get the health care that my family deserves and should receive due to my many years of hard work. I leased a great family car last November and should purchase it when the lease ends in two and a half years.
Saving for college, for retirement and for health care are goals and things that I have to constantly remind myself of instead of purchasing a shiny new car, buying us all iPhones, getting new "smart" TVs, going to Hawaii and Mexico like our daughter's friends' families, and the other upper middle class trappings that we are still tens of thousands away from obtaining.
Enough ranting about my own wants. Our family's struggles are definitely middle class struggles shared by millions of other families throughout the U.S. and the World. Even though the American middle class continues to shrink, about half of us Americans are still in it per the Pew Research Center.
It made me glad to read about the things that some of these little old ladies from Beardstown were able to do with their investment gains, whether it was properly reported or not.
Always being open to excellent advice and always willing to learn something new, I thought that I would learn a thing or two from these ladies from Beardstown.
and Beardstown Ladies' Common-sense Investment Guide - How We Beat The Stock Market - And How You Can Too
hoping to pick up some mensch-like wisdom from these sweet little old ladies. |
The ladies from Beardstown, whose average age is 70, said the error stemmed from a mistake they made while typing data into a computer program.
"We feel very badly," said Ann Brewer, a club member. But not so bad that she would not enjoy her share of the massive royalty payments made on these books.
Regardless, I was not looking to these little old ladies for stock tips. Tips given by anybody that many years ago would be obsolete and pointless at this time. In 2018, their investing advice and stock picking advice from 1994 is, in fact, severely outdated.
What I do glean from some of the older books that I read is timeless advice. As I have previously written, human nature does not change much and great advice from one hundred years ago is still great advice today and will likely still be one hundred years from now.
Here's some takeaways from the little old ladies from Downstate.
Goals
Like every self-improvement book that I have read including the one that I recently read by Coach Holtz, the ladies advocate setting goals.
The ladies told you to visualize yourself in the near future. What about in ten years? Where do you want to live? What are you going to be doing? How much is that likely to cost?
After asking yourself these difficult questions, it is tome to come back to earth and make a list of your goals for the future. Though they should be guided by your dreams, this is a time for prioritizing and pruning, as the ladies say.
You are more likely to realize your ambitions if you choose goals that are practical.
Pay Yourself First
This is like a broken record to me. Like most of the financial books, magazine articles, blog posts and everyone that I have spoken with about it repeats this mantra.
Repeat it for me. "Pay Myself First!"
 |
The Beardstown ladies say not to let a month pass without investing in yourself. Each month, set aside your bills until you determine how much you can save and then pay yourself before you pay anyone else.
The little old ladies said it doesn't matter if it's only $5 or $10 to start. Yours Truly Money Mensch multiplies this by ten or twenty, so my advice is to send at least $100 to $200 per month if that is all that you can, but $500 or $1,000 (or more) per month is far better.
The Power of Reinvesting
The little old ladies advocate reinvesting dividends. I say Amen to that although in the cases of a few stock holdings in my E-Trade account, I have not enrolled in DRIP or their Dividend Reinvestment Program.
 |
| Source: CNN Money |
From personal experience, I can tell you that it works. We now collect several thousand per year in dividends due to the fact that our number of shares has continued to grow for years, decades in some cases, allowing the dividend amounts to increase as our number of shares increases.
It is a beautiful thing and automatically reinvesting your dividends is a great way to ensure continued, steady investment growth over time and is one of the best and easiest ways to build up your portfolio.
Rewards of Investing
I enjoyed reading about how these little old ladies from a tiny rural town in downstate Illinois used some of their investing proceeds to renovate their homes, travel the world, help their children financially, help pay for their grandchildren's college educations and other things that they used it for.
After all, there has to be some future reward for automatically squirreling away money for years and years when you could be enjoying it in the present.
Case in point, Yours Truly. I drive one of the most beater cars in our entire suburb, we still own two tube TV's (and this is 2018), our family's smart phones are all pay-as-you-go and most of our furniture, and much of our house is falling into disrepair due to deferred maintenance and normal wear and tear.
I sure would like to have a lot more money to fix and replace what needs fixing and replacing, but I am committed to investing on my own and my family's behalf. I was taught to do so by my grandfather, who told me to do it often, and I regret not having worked a little harder at it in my twenties and thirties.
I have many regrets. But also many things to be proud of. As I continue to invest, one of my goals is to have both of our children graduate college with little to no debt. And good colleges, like the private liberal arts school that our son studies music at. He wrapped up his second year last month and is well on pace to complete college in four years. However, as a middle aged guy like me knows all too well, life has a way of throwing a few curve balls and wrenches in the way, so I will not hold him exactly to that. Also, I know that graduate school is in his future, as it is for most in music-related fields unless they become huge stars.
I would like to have a more tangible goal date to pay our house off. That is a post for another time. It would be nice to actually go on several great vacations per year. It would be great to get the health care that my family deserves and should receive due to my many years of hard work. I leased a great family car last November and should purchase it when the lease ends in two and a half years.
Saving for college, for retirement and for health care are goals and things that I have to constantly remind myself of instead of purchasing a shiny new car, buying us all iPhones, getting new "smart" TVs, going to Hawaii and Mexico like our daughter's friends' families, and the other upper middle class trappings that we are still tens of thousands away from obtaining.
Enough ranting about my own wants. Our family's struggles are definitely middle class struggles shared by millions of other families throughout the U.S. and the World. Even though the American middle class continues to shrink, about half of us Americans are still in it per the Pew Research Center.
It made me glad to read about the things that some of these little old ladies from Beardstown were able to do with their investment gains, whether it was properly reported or not.
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