Hereditary Financial Habits – My Investing Discoveries

A Money and Music Memoir

Back in 2021 when I was still gathering my ideas for this blog, I started a money playlist. When I was prompted to think about my relationship with money, some of the first things that came to mind were song lyrics. My parents raised me on the blues (my dad’s favorite) and hard rock (my mom’s favorite), so now my brain acts like a very specific music encyclopedia filled with all my influences and the hybrid genres of modern music.

Each song on the playlist represents a memory for me: “Addictions” by Lucy Dacus from her album “Historian” is a song about some long-ago failed relationship, with the lyrics, “Buy-low-sell-high kind of guy / Invest your time in what’s worthwhile / Was I a risk without reward or did I make you proud?” The album came out in 2018, the year after I began working at AAII. I recall listening to it on the train into the city, feeling like I was part of an inside joke—I had just become entrenched in this investing language, and it was used in a creative way I hadn’t thought of before. I started to notice other finance phrases seeping into my own writing, like “last in, first out” (an accounting approach). I was beginning to see how this thinking could be applied to all aspects of life—everything took either time or money, everything was a risk, but would it be worth it?

Of course, I had to include the classic “Taxman” by the Beatles. “Revolver” (1966) was one of my first Beatles albums growing up. My dad had the CD, and he would play it in the car for us. Later when I became independently interested, he would let me listen to it on my beloved, consistently broken Walkman. I never took the lyrics seriously until I was an adult, “Should 5% appear too small / Be thankful I don’t take it all.” Now with a financial education, I know that 5% is quite a lot, especially when it comes to fees. In fact, 1% is still too much for you to be paying anyone to manage your money. The Beatles are using satire in this song, assuming the point of view of the greedy government, but many British musicians (including the Rolling Stones, Led Zeppelin, David Bowie and Adele) have had similar complaints about taxes when they reached fame. The more you make, the more they take!

“Suga Mama” by Beyoncé might be my favorite song she’s ever done. In it, she subverts the skewed power paradigm between a man and a woman. Not only does she have enough money to be independent, but she can also take care of a whole man, buying him whatever she wants? Go off, girl. The song practically drips with feminist confidence with the lyric, “let mama do it all.” This is Beyoncé after all! She has proven herself to be capable of more than anyone thought possible, breaking down race, gender and genre barriers to be able to express herself and reclaim her past without feeling trapped in any predetermined box. She has so many great songs about money, and I wish I could include them all, but “Suga Mama” is one I keep coming back to. When I got tickets to see Beyoncé in 2023, it was the first song I started blasting to celebrate! Recently, the friend I went to see her with jokingly asked, “Where are the sugar daddies!!!!!?????” I responded: “BROKE” 😂.

The lineage of influence in music is a fruitful topic for me, so the playlist includes some cover songs along with their originals. In addition to “Credit in the Straight World,” first written by Young Marble Giants and popularized by Hole, we have “List of Demands (Reparations)” by Saul Williams, later covered by my favorite band the Kills. Williams is also a poet and all-around creative person, much like Alison Mosshart and Jamie Hince of the Kills, who have deliberately been independent musicians in a greedy industry. The song starts with the lyric, “I want my money back.” Williams says of his song about power and freedom, “I’m tired of the hustle and the make-believe hustle. I’m tired of buying into ideas that divorce me from my potential. I’m tired of having my potential explained in terms of money.” Williams expresses how easy it is for art and hard work to be exploited and lists his demands for getting free from the perpetual capitalistic churn.

I hope you enjoy the playlist! Let me know what songs come to mind when you think about money so we can grow our money music library together.

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On Money and Transparency: Wealth and What It’s Worth

Somehow in 2024, we still live in a world where people are afraid to talk about money. Capitalism dictates that our worth is based on what and how much we have in terms of money, material things, etc., and there is less emphasis on who we are as individuals.

Money can take the form of ambition, leading people to seek further education for higher-paying jobs like a lawyer or a doctor. In this way, we give up our time in the present in hopes of receiving more money (and freedom) in the future. We believe we are making ourselves more “valuable,” but by whose standard? I find that this line of thinking can quickly descend into elitism: This person doesn’t have the same ambitions as me, so what’s wrong with them? Why don’t they want to be “successful” like I am?

Material success does not equal happiness for everyone. Some people will become a CEO just to say they did it—not because they truly wanted it, but because the world told them that was what success looked like. Climbing up the corporate ladder just to be at the top doesn’t make a good leader. There are people who can lead in their own way, those who are more fulfilled working behind the scenes, whose talents lend themselves to middle management. These people have jobs to do just like anyone else, and the CEO who got there by thinking it was the finish line will soon learn that there is a lot more responsibility and transparency that comes along with having that level of power.

When I think about money and transparency, I return to how money was taught to people growing up. Was it an emotional topic? Were the discussions stressful for children, or did they help them understand the family finances better? A study from Forbes looked at how different generations talk about money, and how comfortable they would be discussing salaries with their coworkers.

Not surprisingly, baby boomers had the lowest percentage of the four generations. In addition, “not only were respondents from older generations less likely to have grown up in families that frequently talked about money, but they were also less likely to report positive experiences from such discussions when they did happen.” Twenty-one percent of baby boomers reported that the money talks were stressful, whereas just 10% of millennials felt this way. As transparency about money has improved over the years, we can see the positive effects this has on how people approach it.

The sentiment around salary transparency continues to evolve, and it seems to have had an overall positive impact on hiring and retaining employees. In the Forbes study, millennials were the generation most comfortable talking about salaries. I was happy to see this as a millennial, as I have been trying to implement this practice in my life more as I get older. I have friends who make more money than me, and good for them! They work hard and I value them just the same as someone who makes less than I do. Money can be emotional because we allow it to be, but it doesn’t have to dictate how much we value ourselves or others. At this point in my personal finance journey, I would put a lot more value on how you manage your money than how much you have.

Check out the AAII PRISM Wealth-Building Process to start your own personal finance journey.

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Hereditary Financial Habits: Lessons From a Businessman

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My grandfather Earl Kuntz passed away last week at age 94. He was my only grandparent for most of my life, and I’m so thankful he was able to stick around for a while. Not only was he a man who set an admirable example for everyone around him, but he was also incredibly supportive. He was a subscriber to this blog and an AAII member for many years before I started working here. Every time I saw him in recent years, he would ask, “How’s the blog?”

For a minute there, I didn’t have much to say on the topic of hereditary financial habits. I thought I had already distilled so much of how I was raised into how I manage my finances. My money is working for me in a few different investing vehicles, which gives me the opportunity to be even more independent should something happen to me. I have enough in savings that it doesn’t all have to be delegated to the scary emergencies anymore, it can be for the fun emergencies too!

As my family and I decided how we would honor my grandfather, we gathered old photos and shared memories of how he was thrust into the family telecommunications business at a young age, how he met his wife at work and made his work his life. Here are a few lessons I learned from him over the years. I hope I can do his wisdom justice.

Baby Anine with Earl on a boat, his favorite place to be.

Everything is an investment. During my lifetime, we helped my grandpa move twice. Both times, trying to get rid of things that were old, expired or downright dangerous to have lying around was like taking away everything he owned. To my grandpa, everything was an investment. He was born in 1929, months before the stock market crash that same year, and he was raised by two immigrants who were trying to get their business off the ground. In his eyes, clothing, furniture, plates, glasses—any material thing—was something that could appreciate in value and be sold for more than he bought it. Though there were things he held onto that were worth a pretty penny, many times this wasn’t the case, and we would have to negotiate with him to sell at lower prices or to give up on the sales completely. He even considered the things he passed down to me and my family to be investments and encouraged us to seek out more money for things.

Everyone has the right to be a customer. One of the first stories my grandpa told us was about a time when he was a kid at the soda fountain and a Black customer was turned away. My grandpa recalled that he was sitting enjoying his drink and a Black man came in ready to buy something. However, the man behind the counter said, “We don’t serve you here.” My grandpa was appalled at this already, but even more so when the Black customer said, “But I’ve got money, sir!” He was forced to leave without buying anything. It was in this moment my grandpa came to the conclusion that there was no difference between him and the Black man, that the man behind the counter was the problem in this equation, not the customer who had every right to pay for and receive goods and services. If my grandpa could solve all of the socioeconomic problems in the U.S. to put everyone on equal footing, he would. He carried out this sentiment not only when it came to business, but also with how he treated everyone in his personal life. He spoke to people about who they were and what made them tick with the same level of interest he had in business.

Earl and Mary Kuntz, the dreamer and the realist.

Sometimes you have to dream a little. My mom will say of her parents and how they ran their telecommunications business that my grandma was the realist and my grandpa was the dreamer. More specifically, business decisions were driven by my grandpa’s willingness for everything to work out and were made possible by my grandma, the treasurer, crunching the numbers. He would buy up accounts, answering service companies and locations, and he would merge them in order to grow the business. My grandma was the one who kept his feet on the ground and the company profitable.

When I say my grandpa made his work his life, I mean that quite literally: He never retired. Work was the one thing that “pushed all of [his] buttons.” Though I don’t have the same focused feeling about any one thing in my life—finding joy from art, music, dancing, reading and writing—I admire just how much of his life he gave to what he loved. It has been an honor to know him and tell his story.

Hereditary Financial Habits: The Generational Wealth Gap

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When I was first developing my ideas for this blog, I would talk to my best friend Ilana about her perspectives on money, investing and finance. One night, I asked her what she thought of the word “wealth.”

Many other millennials and young people likely feel the same about “wealth” remaining an idea. So, what gives?

My super light and fun research revealed a few compounding issues that affected many millennials in the beginning of their wealth-building years: 1) We have lived through two major recessions, and many young professionals were just starting their careers in 2007–2009; 2) student loan debt has increased exponentially as the cost of college tuition rose faster than the rate of inflation for decades, starting in 1980; and 3) wages have remained stagnant while inflation and cost of living have increased.

Economic Recession

In 2001, around the time when the millennials born in the early 1980s were in college, the economy entered a recession for a period of eight months from March to November. My only potent memories from this time were of 9/11 when I was in second grade. My baby boomer parents, in contrast, recall that “9/11 caused a sharp and shocking drop in the market, and the uncertainty of the time caused people to view what had been a fairly mild recession with more fear, causing more volatility.”

The dot-com bubble that burst in 2000 also contributed to this recession, and many people lost their jobs as unemployment climbed to 5.7% by the end of 2001.

Then there was the Great Recession that lasted from December 2007 to June 2009. This one I remember. I was at the tail end of middle school, and it was on everyone’s minds—yes, even 13-year-olds! My parents recently told me, “It did put a hurt into our 401(k) and stock values. It started with the burst bubble of the housing market, and then unregulated financial institutions, especially mortgages. We didn’t buy or sell a home, so we weren’t affected too much there. Beginning in 2009, stocks started to slowly come back and did well for the most part for 10 years.” My dad says it was “a wake-up call, and I tended to watch the market more closely for signs of volatility after that. I still do. Not that I can do that much about it!”

This recession greatly impacted not just the U.S., but the world. Many countries felt the shocks at different times. At the end of 2009, U.S. unemployment was at 9.9%.

According to an article from Trust & Will, in both of these instances of recession, people with the least amount of wealth—millennials—were the most affected.

Student Loan Debt

First, I want to say that I was extremely lucky in that I had very little student loan debt despite going to an out-of-state, private liberal arts school. My parents started 529 college savings plans for me and my brother in 2001, right around the time of that recession, and my dad recalls that they grew nicely over the years despite blips in the market. I’m so incredibly grateful for the planning that preceded me. It gave me a huge leg up and allowed me to simultaneously start paying off my debt and saving as soon as possible.

When I asked my parents about how much they paid for college, my mom remembered writing a check for $1,000 for a semester (!!!) and my dad said it was between $3,000–$4,000 per year for him. Nowadays, the average tuition for a year at an in-state public school is around $10,000; for out-of-state public school, around $23,000; and for private school it’s closer to $40,000.

Let me throw some more numbers at you from that same Trust & Will article: “In 1989, 40-year-old boomers had a median income of $70,000, median wealth of $112,000 and median debt of $60,000. In other words, income and wealth far exceeded debt. In contrast, millennials have more debt relative to their income and accumulated wealth. With a median debt of $128,000 and income of $73,000, millennials have a much harder time paying off debt and building wealth. In addition, you might notice that the median income for millennials is only $3,000 more than the median income for boomers back in 1989. Wages remain stagnant and are outpaced by inflation.”

It’s likely that most of the debt millennials are carrying is related to student loans. An article from Visual Capitalist investigating the rising cost of college tuition found that “Since 1980, college tuition and fees are up 1,200%, while the Consumer Price Index (CPI) for all items has risen by only 236%.” This staggering difference need not be quantified further: College is so damn expensive that we need the government to subsidize our education, but we need the education to qualify for a career to pay off the debt!

Thankfully, there is some good news. For the first time since 1980, the cost of college tuition is finally not rising faster than inflation.

Wage Stagnation

As I briefly mentioned in my book review of “Broke Millennial,” wages stayed roughly the same for 40 years compared to inflation, as supply likely overwhelmed demand in the job market.

When I looked into this further, I found a Fast Company article that noted, “While recent pay hikes are certainly a positive development that will benefit millions of workers, they are not close to making up for years of wage stagnation.” They also can’t outpace inflation over the last year, which has overtaken most of the raises people received in 2021.

In addition, the purchasing power of the average American hasn’t really changed in 40 years and everything around us has become more and more expensive, forcing many people to work multiple jobs just to pay rent and get food on the table. Some news outlets will give this a trendy name like “polywork,” as if it’s something new and exciting to report on instead of people being overworked and underpaid into eternity.

Conclusion

Though I won’t be able to solve all of these economic problems in this blog post alone, knowing that all of these factors are at work helps me to understand why millennials have struggled to bridge the generational wealth gap. Are there any other possibilities you think I missed? If you’re an older millennial, how have you combatted these external circumstances? If you’re a younger millennial with a lot of student loan debt, stick around because I’ll be looking into how you can invest even while you pay it off.

Hereditary Financial Habits: Introduction

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Before I got my first paid internship as a college student, money was something that was just out of my reach. Like many kids, I was given an allowance by my parents to do chores around the house. I would empty the dishwasher, set the table for dinner, take the garbage out, etc. I appreciated that there were also things I was expected to do that I didn’t get paid for, like doing my own laundry and cleaning my room. I would get paid for the things I could do for other people, but the things I didn’t get paid for had to be self-motivated; it was a great way to build discipline.

I learned from a young age that being independent and doing things for myself was an asset to me. To this day, I will try my hardest to solve any problem that arises before asking for help (yes, sometimes to a fault, but I’m working on it!).

As I’ve gotten older, I’ve noticed more similarities between me and my parents in the way we think, the way we conduct ourselves socially and how we interact with the world. Some of those things my dad will address as “the family curse,” others as his “insanity,” but one of the ripest that I want to break down further is what financial habits, if any, I inherited from my family.

Unfortunately, my grandma on my mom’s side died when I was very young, so all I have is stories about her. As I grew up, I learned that she was an accountant and started her own tax business in the 1950s. It wasn’t an easy time to be a woman, let alone a businesswoman. She was the only woman in her accounting class, and people questioned why she wasn’t getting a teaching degree instead. But she proved all of them wrong, and she went on to meet my grandpa on my mom’s side, who was active in his parents’ phone and answering service business. My mom’s parents ran the phone business together, and my grandma kept her tax business on the side up until the 1980s when my mom recalls a little old lady about four feet tall coming to the office asking for my grandma to do her taxes because she couldn’t possibly go anywhere else!

On my dad’s side, his father died very young, so we never got to meet him. But his mom was around for a little while after I was born. She was big into investing, and when she passed, she left her estate to my parents. My dad told me that when he was 15, his mom bought him stock in IBM Corp. (IBM) to get him into investing. To keep him engaged, she also had him oversee her dividends! My dad would have to verify which amounts were going into her account and match the dividend depending on the company and the month. They had a manual bookkeeping spreadsheet (on paper!) of when the dividends were expected that he helped to maintain.

So I grew up with a lot of business-minded people in my family. But how did that affect how I view money?

As a kid I used to think that my parents would always have enough money to take care of me, that money was something infinite, but I quickly learned that wasn’t the case. My parents had just made good decisions with their money and gotten lucky. I think the biggest lesson I learned from growing up in this environment was to save. When I started making a steady income, I was big into saving because I wanted to be someone who had reserves if something went wrong. If I had a sudden health issue and couldn’t work, I wanted to make sure I could live for at least a year on my savings. It also strikes me as an extension of my need to be fiercely independent; I didn’t think of asking anyone else for help if I fell on hard times, I expected to be able to handle everything myself.

How did you view money growing up, and how did that influence your relationship with money and investing?