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My
dad will soon be 85. He has been a Florida resident since his
retirement from the US Postal Service in 1982 with twenty years of
service. Lest anyone think he had an upper management job with a large
salary, he was a window clerk in a small branch office. Yes, he was 60
when he retired. He had managed to pay off the mortgage on his home, a
modest three-bedroom ranch in a typical suburban subdivision. Mom never
really worked much outside of the home. She had held several part-time
positions over the years, and had been basically a stay-at-home Mom for
most of our childhood.
As
a child of not much over six years old, Dad had watched movers enter
his home in the aftermath of the market crash of 1929. Many of the home
furnishings were sold as his parents tried to survive the economic
conditions of their day. Those events left a permanent scar on the
psyche of my father. Needless to say, he was a very frugal man as a
result of his parent's experiences and his own views of the world as a
young man growing up in the years following "Black Friday". He lived
within his means. He saved his money as best he could. He taught his
sons how to be self-sufficient. He enjoyed his life then and continues
to enjoy it today. He plays golf twice a week, something I hope to be
healthy enough to do if and when I reach 85.
And
then there is Ed McMahon. I recently read where Ed's home is in
foreclosure. He too is 85 but, unlike my father is shackled with a $4.8
million mortgage on his Hollywood home. Sadly, he explains his
condition as one of not being able to work because of an accident that
broke his neck. Without being able to work, he cannot make the mortgage
payment, hence the foreclosure action on his property. Mr. Trump has
offered to purchase Ed's home and let Ed continue to live there as a
renter. I suppose Ed has enough equity in the property to be able to
pay rent out of the proceeds of the sale, but it is very possible that
those funds might not go very far.
Mr.
McMahon is in denial. Though he has without doubt earned far more in
his lifetime than my dad, he has managed to mismanage his assets and
today, at an advanced age is left nearly penniless. For anyone to think
they must continue to work when they are approaching 90 to sustain a
lifestyle is folly. What can we learn from his circumstances?
As a child I recall a few of Aesop's fables being read to me. One of them, "The Grasshopper and the Ant", comes to mind.
ONE
day in winter a hungry Grasshopper applied to an Ant for some of the
food which they had stored. "Why," said the Ant, "did you not store up
some food for yourself, instead of singing all the time?" "So I did,"
said the Grasshopper; "so I did; but you fellows broke in and carried it all away."
Unfortunately,
even when Ed is faced with his own failure to provide for his own
future, it somehow isn't his fault. If only he had not broken his neck
in an accident, he says, he could continue his lifestyle.
Even
more unfortunate, as a result of the same kind of behavior on a
national level, hundreds of thousands of families are now looking at
foreclosure on their homes. US Treasury Secretary Henry Paulson
recently said "home foreclosure starts may hit 2.5 million this year,
many of them the borrowers' own fault for taking out loans they
couldn't afford." Living only for today is a disease that is killing
America. We need to get back to frugality, to living within our means,
to planning for our future by saving. If my father could do it on his
income, others also can.
Will we?
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