Friday, June 27, 2014

"How to save $400,000, raise 14 children and buy a $1.3 million farm"

Regular readers know we aren't really into the "Financial Secrets..." thing, although I did do one as part of a "Revealed" obsession, links below.
The reason for posting this piece is to show how important it is to keep outgo lower than income, regardless of what the latter number is.
From MarketWatch:

Financial secrets of the Amish
When the Great Recession hit, the Amish barely blinked. “They put aside 20% of their earnings — most of them were just fine,” says Lorilee Craker, author of “ Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving .” Craker, a Mennonite who grew up in Winnipeg, Manitoba, and now lives in Grand Rapids, Mich., spent several weeks with the Amish and says the experience changed her life.
MarketWatch spoke with Craker about what financial lessons we can learn from the Amish. 

MarketWatch: The Amish didn’t have subprime mortgages, did they?
Craker: No, they did not. I met this one farmer, Amos, near Bird-In-Hand, Pennsylvania. He had saved $400,000 over the course of 20 years while raising 14 children and renting a farm for around $1,800 a month. He was about ready to put down $400,000 on a down payment on his own $1.3 million farm. They’re big on big down payments and being in as little debt as possible. 

MarketWatch: How did he save all that money?
Craker: It’s this incredible bone-deep thrift, which is not really stinginess. It’s a generous frugality. They will go to great lengths to re-use, re-cycle and re-purpose. They don’t do it to be green, they do it to be thrifty. 

MarketWatch: Where do those you interviewed put their savings? Do they invest?
Craker: They only invest in real estate and owning their businesses (carpentry, boat covers, quilts et cetera). They don’t buy stocks and bonds....MORE 
Tangentially related: 

I think it all started with:
...That headline, "Revealed" reminded me of my two post fling with scandal headlines last year:
Darkest secrets, EXPOSED!

“Do you have a moment for the environment, sir?”
“No,” I barked as I evaded her, “I don’t!”...