Journal Your Family’s Financial History.

My colleague Doc G has written about his financial pedigree.  He claims 3rd gen FI!  Your attitude toward money comes out of your family at a very basic level, like at a breathing air kind of basic.  There is probably a lot that is sorta known in the broader family about Finance, like Alcoholism or Robbery is sorta known.  It’s not something really dwelt upon and kind of ignored if it’s not in your face or kicking your patootie. 

His bravery at posting got me to thinking about my own financial family history.  So I sat down and journeled me up a far reaching family financial history going back 4 generations as far as I knew, about back to great grand parents who lived in the late 1800’s.  There was a family farm back then for some aspect of the family,  and all the uncles and aunts would gather at the farm for reunion! and the women would bake pie and Blatz beer and Pabst Blue Ribbon drinkin men would get out the 10Ga shotgun and laugh as we pip squeak kids would set off a blast toward the sky and get kicked like hell in the shoulder.  That 10G was no joke!  Rite of passage.  The farm smelled of manure.  I’m not exactly sure where it was located, somewhere south of Gary IN.   

My grandparents were born at the turn of the 20th century.   If you trace it, their jobs, their education, their success at raising a family in the face of things like WW1 and WW2, Korea, Viet Nam (reached into my generation) and the great depression, and various layoffs, unions. rotten offspring, successful cousins etc you have lain before you an understanding of the American economy for a century or more and how your personal family dealt with making it in America.  You understand the constraints of retirement.  Did Grandpa have a retirement?  If so what was he invested in? (a way to understand risk).  Did he advance at work?  Was he a Union man?  How did he survive the great depression?  What did his kids (your aunts and uncles) wind up doing?  What was their retirement like?  Did they save?  What about cousins?  What about cousins’ kids?  All of these people somehow survived with a real story, not just a blogosphere projection.  A real story that is the life you lived the financial air you breathed as a youngster. 

From that you can also look at your relationship with money under that light and see what insight that provides.  It’s actually fascinating.   A quick example: My Dad was an engineer.  A professional engineer which means he was like board certified and could stamp jobs as sound design from an engineering perspective.  A valuable credential.  It means a project can get financed and insured. Prior to certification he was subject to getting laid off.  Engineers are in high demand in the good times but dead weight in the recession.  So that was my story, living in the house of an engineer with 4 kids who got laid off every so often and required a job change and possibly a move.  My Dad lived through 6 moves in his career.  The 7th was his retirement move to my town where he could be near me and watch his grand kids grow along with my Mom, who is still alive.  He knew  I would take care of Mom if anything happened, the ultimate in risk management, so I’m familiar with the finances and have seen how my Dad handled those.  He was a star.  My Dad handled my Nana’s finances once gramps died and he also handled my Aunt (gramps sis) who had no kids but was married to an entrepreneur back in the 40’s and semi retired to FL in the 50’s.  The guy was hell on wheels on the organ.  I was very familiar with those financial histories and their successes and relative failures.  (Word to the wise a CD ladder is a poor investment strategy in a 1973 stagflation, and 1980 raging inflation environment). 

I discovered much more, likely too personal to relate, but the point is the point.  You are sitting on a treasure trove of personal insight and righteous systems analysis if you bother to look.  If you bother to look, Suze O won’t have anything on you.  You will have personal history of success and failure far beyond some 4 x25 blog snot.

9 Replies to “Journal Your Family’s Financial History.”

  1. That is great you were able to do a financial family history tree. You really do have a treasure trove of financial insight more the you can gleam from any blog. Especially because this time span includes some of the big financial crisis like the great depression etc.

    1. Hey That’s why I don’t believe in rearward looking analysis. The history does not so much effect the future as inform the sojourner. When in the past did we have internet or cell phones? The past was about pensions and that limits economic activity. In the the past it was extremely hard to invest, now it’s trivial. In the past we weren’t 25T in real debt and 100T in unfunded debt. In the past China wasn’t stealing our intellectual property. AI? did I mention AI…

  2. Fascinating to read about this. JD Roth calls it your money blueprint, the manner of default thinking you inherit from your family.

    You are completely right that there’s a microcosm of the economic world sitting in your genealogy if you know how to look.

    Thanks for the reminder,


  3. Interesting. I give my parents huge slack for simply doing the best they could. They had many setbacks and disadvantages.

    I consider myself extremely fortunate to not have had their issues. Thus I have always decided it should be much easier for me. ?

    1. My Mom’s Dad had a 2nd grade education and if the boys didn’t go down and knock a few coal lumps off the coal train as it passed on the way to the steel mill, the family didn’t have heat. He planted a garden every year in his tiny yard and fed the family from that produce. When ever I came he gave me a quarter and I would walk down to the “little store” a block away and buy some penny candy. Bonanza!

      All those kids did better than gramps, and most of the kids of the kids did even better so though poor, interest was paid on his investment, just not in dollars in the bank. When gramps retired he moved from kid to kid every so often and the family took care of him. He had a tiny pension and some SS, but he was quite secure.

  4. For better or worse we are all influenced by how our families handle money as we grow up. My background is similar, engineer father with SAHM. The layoff worry does make you a saver, my family certainly encouraged it. Dad got tired of answering to an impersonal Corp so took a 5 year break to be a stock broker. Old boss called him back at more $$ so he returned to engineering. When I started my investing career his advice was max out my IRA every year and use no-load mutual funds. No individual stocks for this ex-stockbroker, at least not for his son, he thought the commissions were outrageous. I knew I had an investing head start since only one other resident in my program even knew what a mutual fund or IRA was. I’ve always appreciated the beginners advice.

    1. In general your Dad’s advice was good advice. The average “good” retirement portfolio is $650K at 65. $650K does not RMD you into 1, 2 or 3 increase tax brackets. It gives $23K at 70 and $62K at 90, mixed with a little SS. So in 20 years you move 1 tax bracket and have 600K left in the account. The problem is when you have 3M in TIRA. It RMD’s 109K the first year already in the 22% bracket and nearly 300K at 90, mixed with SS it’s well into 32% and if you die, mama is left in the 35% bracket with a $100K tax bill and all the surcharges they put on to soak the rich. My BIL was a broker and they spent their time stuffing crap stocks into client accounts. They were basically salesmen with quota’s to unload at $200 a trade. Bad JuJu

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