Posted by on Nov 28, 2008 in Posts | 0 comments

Image credit: Winslow Homer, “Bear and Canoe” (1895), Brooklyn Museum


By Jason Zweig |  9:39 am  Nov. 25, 2008

Jason Zweig writes the Intelligent Investor column every Saturday for The Wall Street Journal.

A few days ago I put up a post saying I hoped stocks would go lower, and it rubbed a lot of people the wrong way. I didn’t intend to be hurtful. A few commenters accused me of being spoiled, and one suggested that I was a coddled member of the silver-spoon generation.

I’d like to tell you about my silver-spoon background.

I was raised in an old farmhouse on a dirt road in a village of fewer than 100 people in northern New York State, midway between New York City and Montreal. The nearest stoplight was 12 miles away.

Because we got our water from an old stone well, we did not have a dishwasher or washing machine. My mom did the laundry once a week, in the laundromat 14 miles away, among her many other errands. We — usually she — washed the dishes by hand.

Every August, almost like clockwork, the well ran dry. My brother and I then had to fetch water from the pond, which we boiled for drinking and cooking. (We also had to bathe in the pond, but sparingly; we were teenage boys.)

In the winter, we often went through two or three weeks in a row when the outside temperature never went above zero. When heating oil jumped in price in 1973, my dad installed a pot-bellied stove in the kitchen; he and I chopped wood to fuel it; and my mom sometimes even cooked on it, mostly for fun. (There’s nothing as tasty as a potato chip sizzled to a crisp on the cookplate of a wood stove.) It snowed all winter, but no one I knew had ever even been on skis. Who could afford it? Nor did anyone we knew go on vacation to get away from our arctic winters. Who could afford that?

In summer, we ate fish three or four times a week, because our pond was full of them, and they were quick and easy to catch. They were also free. So was the bait — we could dig up a can full of worms in five minutes. We also ate a lot of potatoes; there was a farmer from a few miles away who sold 20-pound bags of potatoes for $1.00 from the back of his tractor.

The TV gave out when I was in sixth or seventh grade, just after my brother went off to college, and it didn’t seem worth spending the money to replace it. We listened to the radio, and I read hundreds of books.

I attended a central school — I’m not sure many exist anymore — with kindergarten through 12th grade in one building. Most of us rode the school bus; it was up to a 45-minute ride. Math and science stopped in 11th grade; there was no budget beyond that. We had no football team (the equipment was too expensive), no swimming pool, not a single computer. Yet I learned enough to get into an outstanding college.

I was bewildered, when I arrived at my college’s freshman orientation, to meet kids who talked about what they had learned in psychology or physics or calculus. They laughed at me when I asked, “Are you transferring from another college?” I had no idea that any high school offered such advanced courses. When a professor asked what A.P. classes I had taken, the only reply I could think of was “I don’t think they had a bureau anywhere near us.” Not knowing what “Advanced Placement” was, I thought he was talking about the Associated Press.

When my brother turned 16, my uncle sold him an old Plymouth that had been rusting in the hayfield behind his barn for years. Uncle Harry struck a hard bargain: If my brother could get the engine to turn over, he could drive it away for $1. My brother drove it until I turned 16, then gave it to me. It promptly died, but I soon inherited his Volkswagen Beetle. It had no running boards and the floor was so perforated with rust that I could literally put my foot down to the left of the clutch and touch the pavement below.

On my first job after college, I worked in a warehouse. One day, as I was sweeping up after closing, the owner came by. As I bent down over the dustpan, she stomped her foot into it. She scooped something out of it with her hand. Glaring down at me, she waved it in my face. “If you ever throw out a perfectly good paper clip again,” she warned, “you’re fired.” I was mortified — not because she had humiliated me, but because I really had almost wasted a paper clip.

On my second job, I walked to and from work every day – about four miles each way — because New York’s subway fare had just gone up to 90 cents. Five times $1.80 was nine dollars a week. Fifty weeks a year times $9 was 450 bucks. That was a lot of money, especially to somebody who made a point of eating peanut-butter-and-jelly sandwiches twice a day. I finally replaced my walking shoes, after almost two years, when they burst open at the sides. It wasn’t baring my socks to other people that bothered me; it was getting my feet wet when it rained.

So I know what it means to scrimp and save, to do more with less, even to do without. The most important lesson that I learned, I believe, is that money is not wealth. Benjamin Graham once wrote that the secret to happiness is learning to live well within your means. Did he mean to “live well” within your means, or to live “well within” your means? I think he intentionally left the sentence ambiguous.

Money should never be taken for granted. Its uses are limited, but it is not a renewable resource; it is finite. And finite resources — love, water, the Earth and, yes, money — are meant to be stewarded and treated with care.

As I look back on my childhood, it seems amazing that anyone could possibly regard it as having been poor. My parents ran their own business. They had money – all my friends regarded us as rich – but they didn’t waste money. We did not feel poor, we certainly did not feel deprived and, in fact, we would have been furious if anyone had suggested that we were anything other than thrifty. Life may not always have been easy, but it certainly was good.

To this day, I recycle used paper back into the printer, reuse paper clips, put food scraps in the compost, turn the thermostat down and the lights off not because I once was “poor” but rather because I hate waste. Not being wasteful makes me feel good.

Close your eyes and think of the quintessential American. Who comes to mind first? In my mind’s eye, I see two: Benjamin Franklin and Abraham Lincoln. Each of them had many virtues, but one of the most obvious was a sense of thrift. In fact, thriftiness used to be one of the central defining characteristics of what it meant to be an American.

After a long and lazy boom, America has become a society that squanders just about everything, including money. If this crisis ends up changing that, we will be a better nation for it.

My kind of childhood might not have been for everybody, but a couple of steps back in that direction wouldn’t hurt anybody. Take it from someone who most emphatically was not born with a silver spoon in his mouth: Thrift really is a virtue. Like all virtues, you have to practice it to keep it. And most people won’t ever practice it unless they feel they have to.