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In a brief exchange with @ChivalryGuild earlier today, Dave Ramsey and money matters came up, and I figured that now, with a couple of fingers of my favorite bourbon in hand and a fire going, would be a good time to impart 4 decades of Old West financial wisdom in a few tweets...
1. The purpose of good money management is to not to have to think about money more than is absolutely necessary.
2. When one's financial affairs are in order, one can treat one's day to day work as a vocation--a calling. What one does at work is then about the work itself...
2. When one's financial affairs are in order, one can treat one's day to day work as a vocation--a calling. What one does at work is then about the work itself...
3. There are usually many things that one can do with one's life. Most people have many talents. I could have been a professional musician, an academic, a rancher like my dad, a cut-throat attorney, a journalist, whatever... I see no reason not to choose something that pays...
4. If someone looked at my 1040, they would likely say--"well of course your finances are great, Old West, you make a boatload of money." Not true. I know people who make a lot more than me whose finances are a mess, and many who make a lot less who are in better shape...
5. Like anything else worth being good at--playing an instrument, writing well, public speaking, being a good conversationalist, praying, or making love... to be good at handling money, one must make a bit of a study of it, and practice...
6. One must spend much less than one earns. Not as hard as it might seem.
7. Step one is to build up what I call a petty cash fund--enough cash to buy a pizza or a six pack. And I mean cash. In a jar or wherever. Maybe 100 bucks. If the jar is empty, you don't need it...
7. Step one is to build up what I call a petty cash fund--enough cash to buy a pizza or a six pack. And I mean cash. In a jar or wherever. Maybe 100 bucks. If the jar is empty, you don't need it...
8. Step two--build up what I call a "ready cash" fund. Enough to fix your car when it breaks down, get a new set of tires, pay a deductible on a medical expense. The "expected unexpecteds" of life. Maybe a couple thousand--you know these things will come. Untouchable money...
9. Step three--build up a rainy day fund. This is untouchable money that equates to 6 months of being able to live and meet financial obligations. This is "poor man's f-you money" that means if you are fired or need to quit a job, you don't need to panic. One of the proudest...
...days of my life was when my oldest called me and said, "OK Dad, once I've got my rainy day fund done, what do I do next?
10. Every year, one needs at least to max out the matching portion of one's employer's 401K matching plan --you're giving up free money when you don't...
10. Every year, one needs at least to max out the matching portion of one's employer's 401K matching plan --you're giving up free money when you don't...
...do this. And really, figure out a way to max out the whole thing, by hook or by crook. But at least do SOMETHING tax deferred (401K, IRA...) every single year.
11. The money you save in tax-deferred plans from age 20-30 is more valuable than the money you save from...
11. The money you save in tax-deferred plans from age 20-30 is more valuable than the money you save from...
...30 until the day you retire.
12. Do NOT take the attitude of "I'll start doing a retirement plan once my school loans or other debt is paid off."
13. Everything goes into low-cost index mutual funds: e.g. Vanguard
14. Only look at your retirement account when the market...
12. Do NOT take the attitude of "I'll start doing a retirement plan once my school loans or other debt is paid off."
13. Everything goes into low-cost index mutual funds: e.g. Vanguard
14. Only look at your retirement account when the market...
...is going up, never when it is going down. This money is untouchable.
15. The only debts worth accruing are school loans for a profession that actually pays well, home or other real estate, and a small business that isn't a pipe-dream. And the latter has to be cordoned off...
15. The only debts worth accruing are school loans for a profession that actually pays well, home or other real estate, and a small business that isn't a pipe-dream. And the latter has to be cordoned off...
...via an LLC or other legal protections.
16. Get a low fee or no-fee brokerage account and start buying small amounts of individual stocks for fun, in companies where you at least sort of understand the industry.
17. Buy small amounts of physical gold and silver and hide it...
16. Get a low fee or no-fee brokerage account and start buying small amounts of individual stocks for fun, in companies where you at least sort of understand the industry.
17. Buy small amounts of physical gold and silver and hide it...
...and for me this is less than 5% of what I have saved.
18. The reality is that the world is going to be ruled by Democrats for a long time. Their base is the upper-middle class, so they won't let the stock market crash for their base.
19. If our financial system crashes, we...
18. The reality is that the world is going to be ruled by Democrats for a long time. Their base is the upper-middle class, so they won't let the stock market crash for their base.
19. If our financial system crashes, we...
...are all totally hosed, so there is no point in worrying about that eventuality or trying to outthink it.
20. I use a credit card for everything but only because I know I can pay off the full balance every month while still doing all of the saving I intend to do...
20. I use a credit card for everything but only because I know I can pay off the full balance every month while still doing all of the saving I intend to do...
...and I use it to rack up frequent flyer miles, which I use to give family and friends airline tickets. I could buy their tickets, but frequent flyer mile tickets seem "free" and it preserves their dignity.
21. For most people, credit cards are tools of the devil...
21. For most people, credit cards are tools of the devil...
22. During my years of building, I used cash for everything. I embarrassed my kids by pulling out a stack of $100 bills to pay for lift tickets when skiing or going out to dinner at a nice restaurant. But I knew exactly what I had to spend and what I didn't.
23. Over time, one...
23. Over time, one...
...gains an instinctive sense of what one can afford and what one can't. I remember going shopping in our favorite West Coast city with my youngest a couple of years ago. I was talking with my tailor about getting a new winter coat made for me and a couple of new suits, but...
...I didn't pull the trigger. At another favorite store, a nice dress jacket was on sale in my size and I immediately bought it. My son later asked me why I bought it but didn't get the other things, and I said, "because I knew I could afford the jacket, but couldn't afford...
...the new suits or the winter coat." How, he asked, did I know that? "Practice." Technically, I could have afforded all of it, but not while keeping my priorities intact.
23. An honorable man is always able to pick up the tab at dinner, to give generously when there is...
23. An honorable man is always able to pick up the tab at dinner, to give generously when there is...
...an appeal for someone in need, or when something is needed for his church. I recently donated stock, pooling my resources with couple other men, to allow a priest to buy a car he needed. A few years ago, another priest I knew needed oral surgery not covered...
...by his insurance, and I was able to pick up the whole cost by a donating to the organization that was raising the funds for him. We recently made a major donation to support the work of a girl we know who has made Orthodox Christians for Life her calling. I anonymously...
...put a worthy man all the way through seminary some years ago. I say this not to brag. Not remotely. The point is that there are always needs, and if there aren't men who have learned how to handle money, these needs would go unmet. I'm sure that there are those who would...
...look at things I have done (were they to know about them, which they don't) and say, "sure, Old West has lots of money, what's the big deal?" But the truth is that at my same income but without the money-handling skills I learned both from my rancher father with...
...an 8th grade education and from making a life-long study of how to manage finances, none of this would have been possible. Nor would Mrs. Old West's many quiet charities be possible.
24. We live in the world we live in. Learn to live in it honorably.
24. We live in the world we live in. Learn to live in it honorably.
