June 20, 2012

Sorry, Gramps: The plummeting of our personal wealth

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I've been thinking a lot lately about personal wealth.

Recently I attended a memorial for my grandfather, who before he died lived 89 years of full, prosperous life.

He was prosperous in many ways, my grandfather. An optometrist who treated patients and ran clinics, he was a savvy businessman who built enough personal wealth to live comfortably and provide for his family, all the while doing something he truly loved and believed in.

Besides choosing a strong career (he had other loves, my Gramps, including music and cows, but he didn't chose to seek his fortunes there), he made smart choices. The child of poor Russian immigrants, my grandfather understood that a penny saved was a penny earned, and that no one would hand him anything free in life. Even if they had, I doubt my grandfather would have felt comfortable taking it.

Going back home and visiting for a while the realm of my grandfather's world -- the polished home he last lived in and took great pride in, the hard-working and dedicated wife (my grandmother) he left behind -- I was reminded of just how savvy, or lucky, my grandfather was.

By the time he entered his twilight years he had pared down his once-larger life. But at one point, when my mother and her siblings were young, my grandparents owned a classic, upscale home in a large East Coast city, a vacation condo on the beach and a country home on a lake. Oh, and a sailboat. They collected beautiful paintings and artwork and traveled for pleasure and cultural enrichment.

Later, in retirement, my grandparents were fully prepared for whatever might come their way financially and health-wise, and they were generous with the help they offered their family. They enjoyed the hard-earned fruits of an upper-middle-class life, but my grandmother also cut coupons, reheated leftovers and was never, as long as I knew her, extravagant. For our birthdays, the grandchildren received (much appreciated) $18 or $36 checks, though my grandparents could have afforded much, much more.

How did they build personal wealth, this generation that was borne of the Great Depression? I suppose if my own generation had the secret, or had been able to avoid the past five years, we might all be on our way to that fabled American Dream, too.

I was thinking about my Gramps when I read last week that the recent recession wiped out nearly two decades of Americans' wealth.

The median net worth of families dropped 39 percent, from $126,400 in 2007 to $77,300 in 2010, putting middle-class families on par with where they were in 1992, according to the Federal Reserve.

That's a loss of 20 years of wealth, a generation of work and intention gone like smoke.

I wonder what my Gramps would advise us to do? Work second, third jobs? Change careers, retrain? Rent instead of own? Wait longer to marry and have children? What would he say about our battered personal wealth?

I feel lucky, so far, not to have been hit worse by the recession. But I also wonder how much I am personally to blame for my unimpressive accumulation of personal wealth thus far. Savings and security are nice and all, but they seem to pale in comparison sometimes to the more immediate satisfaction of a restaurant meal, a fun vacation or all the genius-building extracurriculars our kids just have to have.

I don't think my generation knows the value of a penny like those previous did. We don't know how to tell ourselves "no."

I know I don't regard the coins at the bottom of my purse the way I should: as tiny deposits into an account called Prosperity. I don't count my crumbs, and I know I don't look far enough ahead.

The past five years have made me more paranoid, but I'm not sure they've left me much wiser.

In honor of my Gramps, I'm going to do what many of us should and make some changes. I'm still feeling around for where to begin -- I know that building personal wealth requires steps on many fronts, from job decisions to money saving to better spending choices.

But I know that people at nearly any income level can save money. I realize, reluctantly, that every decision has a cost. And I know that whatever I can start teaching my own kids about personal wealth will help them in the long run, too.

Goodness knows, we need it. We've got 20 years to catch.

Natalie Singer is a freelance writer and the founder and owner of Punkernoodle Baby, a Seattle-based cloth-diaper shop and ecommerce site. Email her at nsinger@nwjobs.com.

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