Simple financial lessons of the past still ring true
When my grandparents lost their house during the Great Depression, my Dad was just a little boy but the experience never left him.
Of course, he did not fully comprehend what was going on at the time. He knew the backyard that had been his world was no longer his to play in, that life was harder and older kids were leaving school to go to work.
Most of all, he saw the worry on his parents’ faces, and how they tried to protect him.
When he left school to be a carpenter’s apprentice, and eventually start his own business, he retained a morbid fear of debt. But teaching him the trade was a great chippie who also subtly showed him how to navigate a tough world.
This broader education was the rock upon which he built a life for my Mum and I.
I still marvel at how he built our family home by himself, without turning to the banks.
I absorbed many of his lessons without realising it. This is how many economic lessons are taught. Over generations.
My Dad found it pretty ironic when his son became a banker, and he was not afraid to remind me of the fallibility of the economy. He was right, too. Over the past 250 years, there have been 39 financial crises of some shape or form.
On average, they’re every six or seven years.
When many bankers see financial crises coming, they think of the price of swap rates or things like liquidity. When my Dad saw financial crises coming, he thought of the price of food and schoolbooks.
We can’t forget principles like this. Things like spend less than you earn, put money aside for a rainy day and protect what you can’t afford to lose.
Whether the economy is booming or in turmoil, we need to make sure a measure of our success is how much we collectively invest in education – a key part of which is supporting our teachers.
Some of us have people like my Dad, who impart these values. For others, those lessons are often taught by our teachers. They are there on the good days and often help carry our kids through hard times too.