Depression Lessons

My dad was born in 1930. He was one of five boys, his dad was lucky enough to have a union job, and they scraped through the Great Depression, inviting various down-and-out relatives to share their limited living space over my dad’s growing-up years. He never had his own bedroom – more often, there were 3 or 4 sleeping to a room. He and his brothers all got jobs as young as they could. Summer vacation involved spending all day at the beaches on the south side of Chicago. Eventually, 4 out of 5 brothers went to college, then joined the military, later going to grad school on the GI Bill. They became lawyers and teachers and businessmen.

Story of the American dream? Sure. But also a lesson in the personal financial lessons the Great Depression taught. My father has always abhorred stocks; he saw too many relatives go broke on them. My father paid for all of his kids to get a college degree, but he made us figure out ways to pay for our own graduate school. We lived in a home that always felt too small (one shower for five people? You better hope you didn’t miss your 7-minute bathroom allotment in the morning!) and shared one car among us (high school humiliation). My mother stayed home with the kids while we were young, and the finances somehow worked. Today, my dad is finally retired (he worked until age 78) and my mother is still working. They are financially secure, but they still share one tea bag between them.

My parents’ story reflects the broader research in the classic financial planning book The Millionaire Next Door. As a generalization, author Thomas Stanley describes hard-working men (he has another book devoted to women who become millionaires – the story has its own twists but the same point) who live below their means, work all their lives, live in modest homes, and never drive fancy cars. To me, this generalization captures the mentality of Americans who lived through the 1930s.

As this Great Depression generation is aging, we seem to be facing challenging economic times more akin to the 1930s than other eras in recent memory. We need to find people like my father and ask them to tell their stories. What can we learn? Can we re-position ourselves financially to emerge from this crisis stronger? I haven’t personally or professionally given up on stocks, but I am grateful for my fully paid Honda. Can you find a friend or relative to tell a financial story from which you might take something to improve your own financial stability for the future?

By Marie Claire Allvine