Grandpa's Financial Advice

Trent at the Simple Dollar has three financial lessons he learned from his grandfather, and they’re not only good advice, they’re interesting as well.

Diversify your money. My grandfather was a bootlegger in the 1920s. He had an old Tin Lizzy that he used to drive around rural Illinois, carrying his wares under a tarp on the back. Unsurprisingly, given that Prohibition was ongoing, these were cash-only transactions, and he would often drive along in that old rusty machine across the backwoods of Illinois, in the time before there was even many paved roads….He kept all of his money in a local bank, the building of which was still standing when I was a child (though it has since been torn down)…Most of the businesses that the bank owner was invested in were bankrupt by the end of 1930, but the bank owner kept trying to play the market and make the money back. Well, in late 1931, word got around that the bank had almost no money at all, and lots of people went to the bank to try to collect. The bank just shut their doors, locked them up, and the bank owner left town with what remained of everyone’s money. My grandfather happened to be out on a run then, and when he came back to find himself in financial ruin, it changed his life forever.

He failed because he put all of his money in a single investment that wasn’t all that secure to begin with. If you have money to save and invest, put it in several different places, because you never know what might happen.

For more tales of Trent’s bootleggin’ grandfather and his financial adventures, check out The Simple Dollar.—MEGHANN MARCO

Three Money Lessons My Grandfather Taught Me [The Simple Dollar]

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  1. shoegazer says:

    In general, all banks’ deposits are now backed by some form of insurance. I doubt you’ll be put in the same position as Grandad when it comes to taking out your money.

    Diversifying your portfolio is all well and good, but bank accounts should be as simple to access and as unified as possible. I have my main credit card, current account and high interest savings with the same bank. It’s much more convenient when you need to move money around quickly and I can see all my cash on one web page.

  2. thrillhouse says:

    this was unfortunately prior to the inception of the FDIC.

    Still, more people need to take financial advice from their grandparents instead of Visa commercials.