“My limited experience with it has instructed me that debt complicates my finances and invariably costs money.”
–little brother
if someone asked me who my heroes might be, i would immediately say the amazing mr. benjamin franklin with his many contributions to mankind, and the current (14th) dalai lama and his infinite compassion towards all beings. but there is one person that i also admire in our day-to-day ‘everday’ lives, and that would be one of my younger brothers.
this younger brother — we’ll call him Little Brother — is currently 21 years old. i helped to raise him since i was 10. over the years, i have watched him grow up into the awesome person he is today, with much amazement and pride.
Little Brother has been quite frugal and careful with money ever since his youth when he became aware of the role of money. although always appreciative and happy whenever he received gifts from me or others (monetary or otherwise), he has always been rather humble and respectful towards money.
he has never asked for much, and when he has, it has been usually something practical. for instance, for several years he just wanted a subscription to discover magazine. he does not spend much, if anything, despite having the financial resources. he prefers used over new, saves, and invests.
as such, he has been taking great care of any assets that he has grown over the past several years since he completed high school. he is currently with the US air force as a linguist in the mid-west. i wanted to ‘interview’ him to better and more thoroughly understand his attitude towards personal finance, and to share with you some of his habits in and attitude towards spending, frugality, investing, and saving.
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big sister: tell me about your assets? (types of accounts,amounts, banks use). what is your feedback about those products/businesses’ quality/service? would you recommend to other?
little bro: I kind of put off doing anything with my money for the majority of the first year of my enlistment. I think it was in the autumn of 2006 that I had something like USD10,000 just sitting in my BOFA checking account. I decided to open an HSBC Online Savings, and kept directing my monthly salary to it until around spring of 2007. Around that time I started reading about mutual funds, and I had in June the avarice enough to throw in 12k across a few T. Rowe Price emerging market funds (latin america, new asia, emerging europe), with automatic monthly transfers (~250/mo. overall). Over the next few months I put a few thousand dollars towards some careless stock choices using Zecco. The expense ratios for the international funds are pretty high, but my original hope was that in the long term it would be worth the price. Zecco is great, though, for not charging commissions for the first 10 or so trades every month.
big sister: what are you thoughts, concerns about the economic downturns lately?
little bro: I had that sinking feeling in my gut when I reviewed my investment accounts the other week and saw the total value of investments reduced by 17k, or around 40%. I think I should to try to take advantage of the discount prices to lower the average cost of my investments, and hope everything bounces back by the time I’ll end up needing the money. I feel so ridiculous out of all of this; certainly I’ll adopt more conservative strategies concerning my money. No more trying to get rich quickly.
big sister: what advice might you give another young person just starting out with work and the ways of the world wrt money? for instance, our baby brother?
little bro: I don’t think baby brother should take the sort of risks that I did. I would suggest to him to allocate the majority of his investments in CDs and other low risk investment vehicles, and to do the kind of research that I mostly didn’t do 
big sister: do you think personal finance should be taught in high school? sooner? later in college? or ?
little bro: Absolutely yes. My econ teacher in high school ever so briefly touched upon investing and related topics, but as something so tied to one’s well-being as this, it’s something that deserves a broader introduction for young people.
big sister: do you do your own taxes? why?
little bro: yes/no? I use turbotax online because it streamlines everything. I can provide them with the account information for my stock/mutual fund accounts, and all the data is transfered automatically.
big sister: where do you go shopping for clothes, other things? used over new?
little bro: I typically shop online whenever I need something new, but rarely. I’d purchase used if there were a Goodwill nearby.
big sister: what do you use to pay for things? cash? check? credit cards? atm/debit cards? a combination? how do you decide to pay for various things?
little bro: Whenever possible I use my credit card, for its cash back rewards, and pay the balance off at the end of the month. Otherwise I’ll simply use cash for goods/services at places that don’t accept credit.
big sister: when do you hope to retire by? what are you doing at the moment in getting closer to that goal?
little bro: I’m not sure I know how retirement works? As long as I’m physically able, I think I’ll always keep myself active and productive. Currently I’m not so concerned with saving for retirement as I am for university. But can I have work and at the same time draw from any retirement funds that I might have, or?
big sister: what is your philosophy about debt? about credit? about frugality? about simplicity?
little bro: My limited experience with it has instructed me that debt complicates my finances and invariably costs money. I’ll never take a loan for anything, ever; not even for a house!
big sister: what do you think are the most helpful lifestyle habits or changes to assist a person (or at least you) with your financial goals, outside of finances directly?
little bro: Speaking for myself, I always try to find lower cost alternatives in the areas I spend money in, and in whatever way possible. For example, I might make my own lunch rather than go out, or limit going to the cinema, or buy used books, and so on.
big sister: who has been the biggest role model for you in forging your perception and attitude towards money?
little bro: It’s likely daddy. He still wears clothes that he received as gifts in the 80’s! It’s something I took notice of only later on, in high school, but he rarely buys things for himself, except for bare necessities. He reuses even floss, for example.
big sister: do you have a book or literary resource you would recommend for all to read to gain valuable insight?
little bro: Unfortunately I haven’t read very many finance books. Tangentially, I recommend everyone read ISBN 0425202399 and 0399153128, and his forthcoming 0399155376. His blog is readily available with a google search of his name.
big sister: i know you’ve suffered a bit of financial loss recently. what are your plans or reactions to that moving forward? what advice might you have for others from your own experience or knowledge experiencing the same?
little bro: I don’t think I should freak out. I don’t currently need the money, so I’m willing to wait a few years for my funds and stocks to bounce back, and in the meantime lower their average costs by pouring money into them.
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hmm.. i never knew our dad reuses floss.. gross, i think that’s going a little extreme!
incidentally, i had first heard of hsbc from this little brother.
i remember learning from our dad that my german tutor (and his friend) had saved up for his house, and did not take out a loan to purchase one! ..although housing prices were quite different 50 years ago. however, somehow knowing my little brother, i wouldn’t be surprised if he found a way not to borrow to purchase a house someday.
well, there you have it — wise words from a young but bright saver and investor. thoughts? questions? comments? please feel free to leave them below, and i will ask him to respond as appropriate.
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December 22, 2008 
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blog carnival, diy, Do It Yourself, frugal living, home improvement, how to, jubilee, saving