Money Matters

Amongst taboo topics: money.

Listening to Oliver wonder why we shouldn’t talk about our savings and earnings I understand his confusion.

I liken it to gender and race, explaining that we shouldn’t categorize people based on facts that they can’t control. He rebuts that we can control how much money we have.

I answer that like everything else that is complicated.

I mean it is public record that our house is on the market for 1.5 ish million. Like many things I share more about my personal finances than most polite people. So here it is for you. Second to food money is the most complicated relationship of my life. In part I believe because we don’t talk about it enough.

I grew up in Newton, Mass. When I was really really little we lived in a garage in Sumerville nicknamed Slumerville and/or scumerville. Now Sumerville is the Park slope of Cambridge which is the Brooklyn of Boston. If you follow. Then it was scummy.

My father was savvy about real estate and bought and managed several multi families (one of which had our home sweet garage in the back.) while he ‘worked’ as a sculptor. Eventually in his real estate scoutings he came across a Newton Victorian with a decaying carriage house (studio!) and moved us there. I don’t know if it had been abandoned, or just maltreated, but there was super cost effective renovation going on, and when we went to visit the house my only questions was where the workers would sleep.

So between real estate and other investments my family lived a pretty close approximation to an upper middle class life. We rarely ate out, drove mid level cars, and vacationed at a summer house reminiscent of our garage, but I lived in Newton…so that meant brand name jeans, cabbage patch kids,  a large selection of tween luxuries. I even had my own phone line.

When I was in eighth grade my grandmother died and left us money. I never knew exactly how much money, but she left a fair amount, like a millionish dollars to me in trust until I turned 35, and a bunch to my father.

From then on we were 1% ers before I knew the term. We built a large house on a lake in Newton, we flew at least business and often first class, and whatever my father wanted he bought. Now this made my mother uncomfortable, but he didn’t really factor that in.

He had odd tastes though, so he would buy sports cars, and art, and gold fingernails, and hired a full time personal assistant, ostensibly to help with his sculpting (and they were all artists themselves) but he used them to take out the garbage and buy him classic cokes. Between money, age, and non-conformist views he isolated himself on lake ave. Emerging to battle the sprinklers, gardeners and site seers who would walk up our drive thinking it couldn’t be a private home.

Amongst other questionable decisions that I championed at the time my father broke my grandmothers trust when I went to college, so I entered Brown with a credit card and a larger than average checking account. That worked out pretty well while I lived on campus. Sometimes I would foot the bill at a dinner, or buy my roommate a sweater but I spent within reason. This was the start of the time that I used money to help buy friends, a practice I am 99% over, but always fear will come back. I cringe as a write this, but the examples are myriad and embarrassing. For the most part I just made people uncomfortable, because my friends have never been the sort to want to be bought. It just took a while for me to recognize that.

Post college graduation I moved with my boyfriend to Brookline, the fancier version of Newton, and rented a nice apartment for above market rate. I had a job, it would turn out to be the most money I have ever earned, and had a paycheck and then whatever my money was earning. At the time my account was throwing off 40,000/ month. Per MONTH. So that year I lived like a mini version of Leo D, renting out all of Boston Billiards for my friends, writing BIG checks to local non profit, generally spending with no plan and no regard for the future.

We moved to Vermont where we couldn’t find an apartment that suited us, so I bought a house. Naturally. We were both unemployed. So we lived on my trust fund. I began working for the school system, got recruited to grad school and became a teacher. Around this time my dad got sick and died, I got married and divorced from my college boyfriend, and I became very depressed.

My self medication was shopping. Not only did I buy big ticket items like a second house (check out the view) 65 inch HD TV when there was not a single HD channel, but I shopped catalogues like it was my job. Between shopping, supporting our household while in grad school, and continuing to give to both Mass and VT non profits I was spending down my account. My father was dying, my mother was caring for him (not that I would have listened to them anyways.) My money manager worked out of the Twin Towers in NY. I was probably his lowest net worth client, and we had never put together a plan to disregard. So I did whatever, and didn’t open the statements.

For six years I earned a teacher’s salary which mostly was relevant because it gave me benefits.

Then I left teaching because I had opened the waiting room and needed to run it. Why did I open the waiting room? Because I bought the building (a good idea) and rehabbed it (could go either way) and wanted a nice bar to meet my second husband (no comment.) When I couldn’t find anyone locally to rent the space I imported friends of friends from Boston. They helped make a hip urban place. I had never worked in a restaurant and I owned it. They knew what they were doing and they operated it.

There was friction.

After the business break up I left teaching to run the restaurant/bar/music venue that I now owned. That went about as well you you would expect. I had an incredible staff, except the cocaine dealer and a few nut cases, and I proceeded to befriend them (not necessarily the best idea but I was 26 and lonely) I ran that venue the way I ran my life. Big bold ideas: health care for wait staff! weekly arts projects with visual and performance art! Local and organic without the prices to match!10% of sales to non profits! Fresh flowers! One of a kind artwork! Handcrafted tables, check presenters, blah blah blah. It was a joy that made money for lots of people around me. When I closed the doors I had lost $800,000.

So now I was down to much much less money, so naturally I went to work for non profits. I earned very little but established some great systems and events while also have time with my little little boys. The Strut fashion show was my idea. There are lots of others.

When I operated the waiting room I gave back through the business so some of that 800K took the place of my annual philanthropic giving. Now I was back to having to write those checks from my family account. I mean, the waiting room account was pretty much just funded by my family account anyways…but some things were going to have to change.

During the time I operated the business my mother bought a lake front lot in sheburne and steve and I rented the ranch house from her. This, along with the original gift from my grandmother, and the art collection from my father, is what has allowed me to maintain a higher than average quality of life even as I pump money into the local economy way beyond the ratios most people advise.

After I left the non profit world I found myself unemployed, with a house renovation sponsored by my mother. Steve made a really good for Vermont but not impressive for the whole world salary, and health care for the first time since teaching came from someone other than me, or whatever S Corp I was currently running.

It was around then that I took stock of my spending, and my family and made some big decisions.

1. I am currently spending money at a rate that we will never be able to afford this life.

2. Investing in local companies (which I had done 40x by then), buying local art, buying local food, and giving time and money to non profits were practices that I wanted to continue.

3. My actions show me that I don’t want to build traditional wealth the way lots of other people do.

4. I don’t want my mother to be supporting our life AT ALL.

So I was left with either scaling back to the right sized life, which would mean ceasing #2, and living much more modestly in every way. Or liquidating my one remaining asset. So I sold the art.

I have raised about 4 million from art sales. A full half of that went to the IRS. Don’t get me started/you are welcome. First I paid off the mortgage on my house, and had my mother sign it over to us. Then I bought two properties in Florida, one that could be considered an income property and the other a lovely little mistake. (Also currently on the market.)

Then we shopped for a house in Shelburbia. And although I continue to state that I could have would have gotten a smaller more modest house than we did we still cut the price in half and the carrying costs by 2/3. If that lake house had sold we would be able to maintain our lives at this level for a pretty long time. Currently though we have 4 properties with their associated property taxes, utilities and debt service. And despite win win apps, marble jar, Refresh Collections, and I’m sure there was at least one other venture in there, I continue to pay to work rather than get paid to work.

So I drew a line, kids need to have fully funded college accounts, and we need to have 1 million in the bank. A sort of symbolic symmetry that re-sets me to where I started Freshman year of college.

Despite paying to work lots and lots of my real estate investments have made money, and as crazy as my see saw of gain/lose gain/lose has been my average annual income comes in around the same as Steve’s not including any money my money makes.

I have used the pronoun “I” through this, because early in our relationship Steve and I established that outside of the college funds and the million dollar safety net everything else is mine to grow, use as angel funding, or toss down the drain. He cringes for sure when I tell him about each 80,000 check. However he lets it go, saying that he believes in me. Im not quite sure why given my track record, but it is nice to hear.

So there it is, my sordid money history. Which includes lots of lucky inheritances. And a more cavalier attitude than most. I wish there was a way to follow the money trail, and see some of the good that has come out of what are apparent losses. It hard to attribute full responsibility to any one of my investments or ventures, but there have been successes.

Events, places, relationships, art sales, etc.

The next chapter is pending. Hopefully I will post something later this week, my aim is to create a sustainable way to reinvest in our community, using one big initial investment (social venture endowment style.) In the mean time I have cancelled the catalogues, completed the college funds, and called the realtor. Three of the four properties are on the market. If you throw enough darts you will eventually hit the bulls eye.

So thats my story. At least so far. Oliver tuned out a long long time ago. He doesn’t have my demons, or my imagination. He saves with gusto. Leo on the other hand…

I’d like to hear in the comments:

1. Your complicated relationship with money.

2. How you talk to your kids about money

3. Whether any of my expenses or investments have effected your life. I’d LIKE to hear positively, but I will also listen to negatively.