Timeless money wisdom from mothers

The best place to start getting money savvy is at home. Our mothers and grandmothers have a wealth of accumulated and practical wisdom.
By Larissa Fernand |  05-09-21 | 

This is a true story, and a beautiful one.

Rezvani from Iran shared a brief chronicle of his aunt, and I was delighted when he gave me the permission to reproduce it.

(I honestly believe that if padded with some drama and a healthy dose of comedy, it would make for an engaging family movie.)

His maternal grandmother traced her origins to Herat, Afghanistan. She died at the age of 32, leaving behind six children, the age difference between the oldest and the youngest being 14 years.

Zehra, one of the older siblings, had to shoulder many responsibilities. Not only was she beautiful but also an astute learner who quickly grasped that homemaking is more than keeping a house clean. She was married at a young age into a very wealthy family, that successfully operated a bakery business on a large scale. Though fortunate to have a wonderful and kind husband, his flaw was that he sucked at money management.

Without his knowledge, she began to put away money.

It was customary for older people to give a monetary gift to their younger relatives who came to stay with them on a holiday. So whenever Zehra’s siblings visited, she would urge her generous husband to gift lavishly. He graciously obliged. Meanwhile, she entered into an agreement with them that she would get to save some of it and they would keep the rest.

She took charge of buying not just groceries, but expensive imported alcohol that her husband desired. The money allocated for these purchases was significant, enabling her to secretly stash a portion away.

Over time, this amount grew.

Not only was she creatively resourceful, she even possessed brilliant business and investing acumen. When the times were good, she accumulated expensive jewellery and kept it as an asset. Using her network and her savings, she bought small houses, shops and farmlands south of Basra. The real estate appreciated in value and provided her with rent which was again saved. She purchased cattle remotely in Iraq and received remuneration from the milk sold to dairy producers. As she got wealthy, she began to lend money to small traders.

Even though no one might have spelt it out to her, she followed the absolute basics of portfolio construction:

  • Save crazily, even when times are good.
  • Invest the proceeds into a diversified portfolio of assets.
  • Ensure a steady cash flow.
  • Reinvest.

When the family business collapsed, and her husband and his brothers squabbled over property and the loss of revenue, she was unperturbed. She was in a position to maintain the identical standard of living as before.

In 2019, Zehra Sadeghpour died a wealthy woman, in her eighties. She passed away in Kuwait, surrounded by her four children and grandchildren.

Women are intuitive savers, and the generations before us have a lot of accumulated wisdom.

My grandmother told me that spending must be done depending on what is valuable to you. Food and shoes were valuable to her. But she was more than happy to cut corners when it came to attire. Her reasoning:

  • Always put good (meaning nutritious) food on the table. This is something you must never compromise on because your health depends on it.
  • Always have good footwear; comfortable and sturdy. (This was because she walked everywhere.)
  • If you can’t afford new clothes, it is perfectly fine to wear old ones or hand-me-downs. But never have a good wardrobe that comes at the cost of good food or footwear.

My mother’s advice was threefold:

  • Never waste money impressing others. No one deserves that much attention.
  • Strive to always be financially independent to whatever degree you can, irrespective of your marital status. You never know what life throws at you.
  • Save as much as possible when you can, because there may be periods when you cannot afford to save anything.

Shaina Gulati, known for her financial infographics, recently shared with me the money lessons her mother imparted.

  • Save, Save, Save. If you have no savings, you will always be at the mercy of other people.
  • Money in a savings bank account won’t help much. The return will not even beat the inflation rate. Of course, Shaina’s mother was risk averse and lacked the knowledge to invest in equity, so she preferred bank fixed deposits, Public Provident Fund, post office saving schemes and gold. Shaina is an equity market enthusiast and holds a balanced portfolio
  • Be debt free. Shaina’s mother was averse to being in debt, and believed that if you were forced to, make loan repayment the topmost priority. You cannot get rich when you are servicing debt, and it is unethical to build your wealth when you owe others money.

When Shaina asked Twitter folk to share the lessons they learned from their mothers, these were some of the gems:

  • Gain ethically. Spend reasonably. - Prasad
  • Save when you can, not when you have to. - Thadeus Delroy
  • Not everyone who looks rich is really rich. In fact, many are poor simply because they are trying hard to look rich. – Sick Economics
  • Don't accumulate too many household possessions; be it crockery or furniture. – Finalysis
  • Invest in improving your skills. If you can do more, you'll earn more. – Pooja Lapasia
  • Keep a bucket full of water in the bathroom for emergency purposes. Got the idea of Emergency Funds from here. - RichifyMeClub
  • Saving is important, very important. But equally crucial is to maintain a good balance between saving and spending. After all, we must also enjoy life, but learn to do so within our means. - Mrin Agarwal

The wisdom from home

Some women run small businesses from home, while others go on to become well-known entrepreneurs. But a lot of women funnel their savings into investing into their children’s lives and education. Something that society does not acknowledge adequately.

I would love to read the experiences of women in your family. Do share it with me at larissa.fernand@morningstar.com.

Larissa Fernand is Senior Editor at Morningstar India. You can follow her on Twitter.

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