7 lessons from my Grandmother

I had a very unusual Grandmother. I grew up in her home. I was never quite clear if my mom and dad chose to live with her to save on expenses or to care for her. But she ruled the roost, which made for interesting family dynamics. She was a little Italian woman, born in New York, growing up in the great depression. She often amazed me with her fantastic stories of dealing with dirty old men in movie theaters, taking care of her 9 siblings after her mother’s death, and, my favorite, how she made millions in real estate.

She is not my Grandmother, but looks like her.

Lesson 1: Be lucky enough to be in the right place at the right time.

My grandmother was a wealthy woman. As the story goes, she married well to a German man with money from a shipping business. As prohibition  and the great depression progressed, her husband received income from his family's shipping business. As you might guess, bringing illegal goods in during the days of prohibition could be a profitable business. So her husband had some money he wanted to invest. My grandmother became aware of all the people losing their homes through bank auctions. She had an idea; she would buy these homes with her husband’s money. She told me how resistant he was to the idea. He was a man that did not like to work. To him, a bunch of foreclosed homes meant a lot of work fixing them up and then reselling them. So my little Italian grandmother had to promise her husband that she would do all the work. She swore he would never have to lift a finger.

Lesson 2: Cash is king when the chips are down.

So he agreed. She went on a buying spree. She bought home after home, lock-stock-and barrel. That meant she not only got the home but the contents, the clothing, and jewelry. She was working every waking moment. She owned 20, 30, 50, then a hundred homes. She became a regular at pawn shops selling off the confiscated jewelry and furniture. She had full time construction workers. She knew it wasn’t the time to sell the homes, so she rented them out. She became a landlord. Soon she had larger apartment buildings, stores, restaurants, even a car dealership. In a period of 10 years she had built an empire. In many ways, it was her example that has driven me to my own empire building attempts.

Lesson 3: Buy at a discount to actual value and time will give you a payoff

True to her word, her husband never lifted a finger. His usual habit was to start drinking early in the morning, visit his favorite bar, drink some more, and then stumble home to sleep the rest of the day away. He was, according to my mom, a very bad drunk.

My grandmother took care of him despite his weakness. She not only ran her growing real estate business, but she cared for her husband. When he had a series of strokes, she provided night and day care for him at home, hiring a physician and caregivers. I was a little boy in that house. I am named after the doctor that practically lived at our home, providing care. My grandfather never spoke. He stayed in bed all day.  He would smile at me. That’s all I remember about him.  Luckily I did not see the drunken rage, the beatings, or the violence. That was all before, so I could only think of that smiling man as my grandpa.

Lesson 4: Once you make your money, keep it safe. Don’t gamble forever

When I was 3 he passed away. By the time I was 7, my grandmother had sold off most of her real estate holdings. She had made herself a very wealthy woman by 1976. She had moved most of her money to bank certificates of deposit and blue-chip stocks. She told me once that she still had trouble trusting the banks, but she did believe in their FDIC protection. But so often, she said, “Never put all your eggs in one basket”. She owned the mortgage notes to several buildings, her stock portfolio was significant, and she still owned some properties. “One day,” she told me, “This will be yours.” I believed her.

Lesson 5: Money is not a substitute for love or wisdom

It was not to be. I think you can blame this on my grandmother’s habit of trying to control her family with money. If she wanted you to do something, she would wave the money before your eyes, until you gave in. I grew up with this, so it actually seemed normal at the time. But it was sick and twisted. It just took years before I realized it. If you were dating someone she didn’t like, you could get paid for dropping her. If you decided not to go to medical school there was a  bribe to make you want to go. She waved those carrots around like there was an endless supply. And as she aged, it grew worse. She pitted her three children against each other. She paid for one child to not work for 5 years while begrudging another. It was fiendish. And it proved her undoing. 

Lesson 6: Never construct your life so your family will benefit more from your death than your life.

My two uncles conspired against her. They convinced her to sell the home she shared with my mother and father and move in with one of them. Then, within 2 months, they had gotten her to sign over all her assets to them. Then came the awful  phone call. At 11:00pm at night, my grandmother was left alone in a bus station in Tampa. She was wearing a housecoat and slippers. She appeared drugged. She did not have a penny on her. By the time my mom was able to sort things out, my uncles had transferred most of her wealth to their names. There was nothing to be done. It turns out, there are no laws stopping children from taking their parents money.

My grandmother passed away within a year. My mother did everything she could to provide for her mom until the moment she passed away. I even pitched in to care for her as much as I could. This involved me leaving Hawaii and moving back to Florida and leaving  a life I was truly happy with. My grandmother cried about her loss of money until the moment she died. I often think she died over that grief. For her, the money was everything. It was like her child. But because of it, she had lost her two sons and her assets. I loved my grandmother. I was with her the moment she passed away. It was one of the most painful moments in my life. I never saw a penny of an inheritance, but that was never something I expected. I loved her like a mother, and her passing left a hole in my life that has never been filled. She did many wonderful things for her family with her money. But that was tainted by all the terrible things. She created a family of dependents, people who would rather look to her for help than working things out themselves. And in the end, she created blinding greed that overtook my two uncles' better judgment.

Not my family, but that is a LOT of mouths to feed.

Lesson 7: Use your money to create independence in you family, not dependence.

If you are wealthy, consider how your money affects those around you. Giving gifts and presents may seem like a fun way to spend your time, but think about the message that sends your loved ones. I think my grandmother should have offered to loan money to her children so they could have started their own businesses. She could easily have helped them create their own real estate and small business wealth by being their banker. That would have meant real mortgages where they would have had to make payments to her. Not a handout, because I don’t think that motivates people. Instead, she gave and gave to the point where her family saw it was easier to get a hand out that actually work for the money. In the end, she made those around her dependent.  And I doubt that was her goal. She always wanted to know her family was provided for. The problem was, she provided too much.

Doug