Our Spring blog series includes excerpts and basic financial lessons from the book In A Most Delightful Way, by our founder and CEO, James Twining, CFP®. The book aims to explore and simplify concepts based on the author’s own recollection of his early life and storied career path. The formula includes a story or anecdote (the “Spoonful of Sugar”) as well as “medicine” in the form of a lesson learned. Request a copy of the book anytime from your FP Inc. advisor or staff member.
Spoonful of Sugar: How to Pluck a Chicken In 5 Minutes
By James B. Twining, CFP®
By the summer of 1982 I had been working as a teller at Southwest Bank in southern California for one year. Our first son, Matthew, was almost two years old, and Jeanne was pregnant with our daughter, Stephanie. We were living in a cheap apartment in Encinitas, California, and it seemed that every hillside in our neighborhood was being graded for new housing developments. The sleepy little beach towns that I loved so much were all being connected, and I developed a strong urge to escape to the country.
Around this time, I read an old book that had been in my family for years called Five Acres to Independence. It was the bible for self-sufficiency. It wasn’t long before I was consuming other titles like: How to Pluck a Chicken in Five Minutes and, Keeping the Family Cow. It seemed to me that living on a small farm would be a great experience for our children, and it held romantic appeal for me. After living in the southern California desert for so many years, the green beauty and four seasons of the Pacific Northwest appealed to me. Jeanne had a little more sense, but being a good sport, she went along with it.
That August, I loaded up a backpack and boarded a Greyhound bus traveling north to find suitable land in the Pacific Northwest. I got off in Ashland, Oregon and inquired about property there. I got off in Eugene and looked at property on the McKenzie River. By the time I got off the bus late one Friday night on Railroad Avenue in Bellingham, Washington I was discouraged. All the property I had seen so far was beyond my low-price range.
I found a place to roll out my sleeping bag behind the old Sears building on Cornwall Avenue. Waking early, I walked around downtown, looking for a restaurant that wouldn’t mind a customer with a backpack who hadn’t bathed in a week. I entered the Horseshoe Café and realized that I fit right in. After a plate of greasy eggs and bacon I walked down to Prospect Street and found the Arneson Realty office. A realtor name Wilson Buyer drove me east of town to look at a property with some acreage.
Among the things I did not know was that in 1982, Bellingham was in the midst of a full-scale depression. The local economy at the time depended upon three things: Logging, fishing, and tourism; and all three were in a severe downturn. There were only 28 property sales in all of Whatcom County that year, and they took place at very low prices. I was shown a wonderful, six-acre piece of land with a barn, a creek, a pond, and a meadow. It looked like paradise and I bought it on the spot. You might say I “bought the farm.”
The Medicine: From time to time, young people who have not yet purchased a home ask me if they should begin to invest for their retirement. You might expect a financial advisor to encourage them to begin right away. I don’t.
Here is my advice: take care of first things first: Buy a starter home, get a reliable, used car. Make sure the basic needs of your family are taken care of first. Only then should you begin to accumulate financial assets for your longer-term life goals such as retirement.
That is the natural way that assets are accumulated: Property assets first, financial assets next. A young couple has important demands on their limited funds; from food and shelter to caring for young children. As the income increases over the years, it becomes reasonable and wise to save for retirement.
Having said that, most people wait far too long to begin to save for retirement. A thirty-year-old who begins a systematic savings plan has a tremendous advantage over the typical person who waits until age forty. Begin as soon as you can after the basic needs are met.