MMM-031: I Hope You Still Have Time
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The Free Breakfast
The answer to mojojojo103’s question: What was the first index fund?
Quant funds. How about a Magic Formula fund?
evan won the book this week.
Funny Money segment reads a rejection letter.
BOOK GIVEAWAY! I’m giving away yet another copy of Index Funds: The 12-Step Program for Active Investors. Make sure you are registered then simply add a comment to this show that tells about one of your Earliest Money Memories. It doesn’t have to be a Pulitzer-prize winning story!
I promise (if you keep listening to the Mad Money Machine) not to head-butt you in the chest.
Nosey? You need this week’s TOOL!
Where did they get the idea for a Cramer Mona Lisa?
A home game version of Guru Roulette?
I did a back test on our Guru‘s suggested portfolio. It did pretty good!
A tune for people trying to time the market or pick individual stocks.
Another little treat: I looked at the performance of last December 15th’s Magic Formula stocks. How have they done compared to the ETF Portfolio?
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Money – Theory in Motion
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Money story that isn’t my earliest but is 2% more interesting.
When I was in my late-pre-teen years I had a paperoute that I made pretty decent money from (for a kid that age). Of course this was back in the day when the carrier was expected to go around and collect money from each subscriber and then buy the papers from the newspaper company out of that money. Anything left over was the carrier’s to keep. Collecting was a task I didn’t enjoy very much because some people would get surprisingly surly about giving the paperboy 6 dollars and I didn’t enjoy the confrontation. Eventually my collections fell behind as I started only collecting from the people who I knew would pay. The carrier was supposed to cut people off who didn’t pay, but since I wasn’t even trying to collect I couldn’t really cut those people off. Rather than own up to the mess and fix it by getting caught up on the collections, I quit the route like a shady CFO who had been cooking the books. I was broke after that, like most kids in the years before they can attain gainful employment as a dishwasher or busboy.
A few months later I and some friends were hanging out when my Mom handed me a letter from the newspaper company. My stomach sank as I thought for sure it was a bill for unpaid papers that I would have no way to pay. I opened the letter with nervous hands. Iit was a check for $62.30! It was the money left over after the new carrier caught up the collections. A princely sum back then. If I remember correctly we invested the entire windfall on a marathon session of Kung Fu Master at the Kwik-Shop. Ah the good old days!
Thankfully, I’ve gained some money disciplined in the years since.
On a different topic, I think zillow inflates prices a bit and needs to be taken with a grain of salt. It is an interesting and addictive tool however.
My earliest memory was that I needed it and didn’t have it. Love the podcasts and look forward to it every week. Keep up the great work and enjoy the journey.
My earliest money memory was the curious discovery of a quarter under my pillow. Not from the first tooth I had lost; just the first time I had lost one when my grandpa was visiting.
I look forward to my Friday morning workout; that’s when I listen to your very enjoyable podcast. Just one more voting day for podcast awards- good luck and keep up the good work! Thanks
My earliest money memory is opening a passbook savings account with my mom when I was little. In today’s world of technology, looking back it is funny to remember how that little passbook was feed into a printer and stamped everytime my mom added ten dollars to the account. How times have changed.
I remember the blue passbooks from the bank. Wow that was a while ago.
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My first was at a store (not sure what one) in the toy dept. I ditched my mom and was opening all the little car packages and was playing with them on the floor. It was quite fun b/c we were poor so I never had that may to play with.
[Mean while in another part of the store] I lost my son… Where is he… I’m going to have find someone to help me….
[Back in the toys] I HUGE man is a security uniform politely asked me what I’m going. I said, playing of course…. He politely said, shouldn’t you buy the toys before you play with them? Well you know how this ends right…
[In the security office] Don’t you EVER leave my side again…. you are going to pay for the cars you opened. So, I spend the next few week doing extra things around the house to ‘pay’ for the cars I opened. I soon found out the cars were not worth the extra things I had to do. For the record, I have to give my mom credit for try to teach me a lesson at such an early age.
John
Moms teach us a lot…
Our local grocery store accepted glass bottles which we redeemed each week on the trip for the weekly groceries. I can’t remember how much we got for one 8-pack of bottles, but it seemed like a lot. I was 4 years old.
On one of those trips I walked by the Brach’s candy bins and decided that grocery stores are just there to give you food, and hey, I like candy, so why not put a few pieces in my pocket. So I did.
When we got back to the car with the weeks worth of groceries, sitting next to my Mom in the front seat (who knew what a car seat was then) I pulled out two or three pieces of candy and proceeded to eat it. She gave me a very long look and asked where I got the candy. Well, duh, the grocery store where all the other food is.
She pulled me and my sister (my sister was older and should have stopped me) into the store where my Mom paid for the candy. That was my first understanding that you have to pay for the things you want.
Not really my first money memories, but two of the more painful early ones:
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When I was 16 years old, rear-ending a Mercedes Benz on the way to a two hour shift at a $1.65 an hour job (and needing to work a bunch of hours to pay for the repair, rather than claim it on my parent’s car insurance).
When I was about 10 years old, and my sister was 11, being persuaded (along with my parents) by a slick salesman to invest our college fund in a unit trust “Conglomerates†with a steep front end load. After the load and bad performance, we didn’t even break even after 9 or 10 years.
Paul,
Guess you are going to get the story on my first memory of money, good job at incentives. 🙂
I was about 4 years old, my family took a long road trip (from TX to CA) (Think that gas was .25 or .50 per gallon then) and when we returned home, a “friend†had robbed us. As a child I did not truly understand the concept but it hit home when I went into my room and my little piggy bank was broken on the floor. I used the bank to put dimes that my dad had given me over the years. He said that they were important because they had silver in them and the new ones were less valuable. Mom and dad were divorced (about one year then) so anything from dad was special to me. I cried and cried and was surprised that my “parents†(mom and soon to be abusive step-father) knew who had done the deed but were unable to find him. I kept asking if Leroy (the thief), would give my dimes back and finally they got tired of me and told me no and I should just forget about it. I asked if the police could help and they answered no. Basically, I was SOL. I guess that has helped form my attitudes toward, parenting, friends, authority (Government, police, FBI, CIA, NSA and others) and justice. I now look back on it and think that I probably only had about $5 or $10, my mom could have just replaced the dimes but she is… Well, lets just say that none of her children really have anything to do with her, but that is another story. Thanks for the bad memories Paul! :p
Thanks everyone for these memories! I’ve already recorded show #32 now, so no further entries will be eligible to win this week. Stay tuned and show #32 will have instructions on how to win a book next time.
But you can still enter your early money memory if you want to. I really enjoyed them and read the ones I had available to me last night on the show. (sorry Viking133).
pdb
Since the contest is closed, and I didn’t want to win for a third time, I’ll give you one of my earliest money memories. I don’t know if this fits perfectly, but I know that one of my earliest money memories is that I wanted some. I think the value that adults place on money must have an effect on kids at an early age. If Mom or Dad gave me some coins, I horded them. Same goes for my sister, as I’m sure it did for my brother, but he was quite a few years older than us. It seems we valued money just for the sake of having it, rather than what we could purchase with it, at that young age. I’m talking 4 to 5 years old.
Now for the story. My parents were having a BBQ or a get together or something of the sort, and on the menu was homemade strawberry ice cream. Of course, with real strawberries. Now another thing about my sister and I was that we really liked strawberry ice cream, but we didn’t really like chunky foreign objects in our creamy treat. I’m not sure why that was, but I only liked lemon yogurt when I was young for the same reason.
So after a couple servings we had a half a bowl each of quartered strawberries with most of the ice cream licked off. Being the entrepreneurs that we are, we decided that fresh strawberries were a valuable commodity, and that our neighbors would not pass up an opportunity to purchase some, given the price was right. We went into Mom’s drawer and pulled out some sandwich baggies and filled 4 or 5 of them up with an equal amount of strawberries. Then we were off out the garage door for some door to door sales.
I think the first three or four houses laughed at us, and told us to go home, but the one after that showed some interest. We were excited. A sucker born every minute right. We unloaded all 4 or 5 bags to this one poor lady. I can’t remember the price. Maybe 25 cents a bag.
It was years later when we heard the retelling of the story by a parent. Our customer had, in fact, been able to tell where the fruit came from, and had just given us the money because it was so damn cute I guess. Right after her purchase, she had called our Mother, and told her what had happened. They had a great laugh about it, although I’m sure my Mom was a little embarrassed.
Anyway, had to share it because your contest made me remember it, and I hadn’t thought of it in many years.
My first job was fetching golf balls, by hand, at a local driving range. I was paid 50 cents for each large basket I brought in. The owner would then charge $1.50 for each small basket sold. This my my first lesson that the real money comes from being an owner.