Hello SOTGC community,
Like any typical child, my mother received an allowance from her father. Unlike a typical child, she continued to receive that allowance for a very long time. How long? Until the year my grandfather died. He was 97.
My mother received financial support from her father because she could not make ends meet on her own. My mother divorced my father when I was four. Then my mother and stepfather divorced when I was 10. There was no man in the house for a few months and soon thereafter came the string of boyfriends.
Of all my mother’s boyfriends, I remember Robert the most. They were not together very long — perhaps a year or two — but he certainly made her happy during that short time. My mother seemed to feel proud and privileged to be his girlfriend. Robert was a handsome marketing executive with a major Pittsburgh department store who drank dry martinis and drove a Datsun 280zx. He never moved in with us because he was still legally married to his wife, who lived in Florida.
When Robert was diagnosed with cancer, he moved back in with his wife and children to die. My mother told me after his death that he had “abandoned” her. I was only 14 and felt confused by the choice of words she used to describe her pain. She could have said she was “sad” or “lonely” but instead she used the word “abandon.” I looked the word up in the dictionary and it meant that Robert had “ceased to support” her. I decided that I would never put myself in such a vulnerable, helpless situation and from that point on, I vowed to support myself.
Robert’s death sent my mother into a deep depression and my brother and I were impacted significantly. We yearned for a mother to nurture us but at times she was emotionally unable to do so. I longed for my home to be a sanctuary but concluded that would never happen; it was up to me to create my own sense of security.
I figured out early on that adopting a life of frugality would be necessary if I was going to stay out of debt and be financially independent. In contrast, my mother always knew that if she really wanted something — such as a down payment on a house, new furniture, new carpeting, new clothes or shoes — her father would pay for it. I don’t think he ever refused. Ironically, my mother never felt close to her father, and I believe that is because her role never evolved from dependent child to independent woman.
Unlike my mother’s parents, my grandparents on my father’s side were poor. When my paternal grandmother died, she left me $1,600. Although I wanted to spend that windfall on things that young women like to spend money on (such as clothes and shoes), I needed to begin investing for my future. At 24, I was currently employed but had already lost two jobs previously and concluded that I couldn’t count on a job to provide financial stability. I had to build a financial cushion in case I was without a job in the future.
In thinking about where I would invest that $1,600, there was only one clear choice: the stock market. I recalled an eye-opening chart presented by Wharton Professor Jeremy Siegel when I was studying finance that demonstrated that over the long run (despite its short term risk) the stock market generated higher returns than other asset classes. Since I was in my mid-20’s, I had quite a long time horizon and knew that stocks were the place I wanted to invest my cash.
On January 23, 1993, I took my entire $1,600 inheritance and bought stock. I chose Starbucks as my first investment and bought 40 shares at $39 ¾ per share. In my book, Every Woman Should Know Her Options: Invest Your Way to Financial Empowerment, I explain the steps I took and the decisions I made to grow that $1,600 into a million dollar stock portfolio before I turned 40.
If you have saved some money, you can start to grow your money today. And if you haven’t saved any money, you are never too old to start. If the stock market is big black box to you, this book will shed light using colorful analogies and vignettes about other successful female investors. If you have some investing experience, you will learn risk-mitigating strategies to add to your repertoire. To be notified when the book is available for sale (expected in early February), please go to www.theoptionslady.com and subscribe to the monthly newsletter.