Patriot Action Network
A Father's Letter to his Children
Posted by Roger O'Daniel
December 14, 2013

Family wisdom and the life story of family patriarchs often are lost because parents neglect to pass it on to their children.

This letter is about advice given to me by my father, now deceased. I was about to enter high school when this conversation took place. It also includes a bit of personal history that followed that conversation. Hopefully, you might find a thought or two worthy enough to pass on to your children when they are old enough to understand and disposed to listen.

I was not a hugely gifted person. I had to work hard and study long hours to accomplish whatever I set out to do. Our family began from humble beginnings. My dad did not finish high school. However, he used his God-given gifts and personal relationships wisely and well. His business success earned upper middle class income, so finances were not a huge problem. His personal challenge to me was to become the best that I could be. Affordability was not an excuse.

He taught me things I did not learn in school through his example and shared wisdom. One day, he shared this with me when I was depressed.

“Son, successful endeavors are 5 percent inspiration and 95 percent perspiration. You will be competing with peers that are a lot smarter than you. You are now in the age group that can learn and remember more easily and have more time to do it than in future years. Do not waste it. Do not damage your health and ability to think with unhealthy life styles and bad habits.

“Also know that you must continue to learn and study throughout your life. Job skills can become obsolete. You need to learn how to excel in your present career and prepare for an optional career skill in an emerging job market. One of the biggest mistakes people make is accepting the idea that they cannot do something. It becomes a self-fulfilling prophesy. Do not go there. It is a recipe for failure.

“Learn to cultivate friendships and be trustworthy. You will need the respect, trust and help from others to succeed. Friends also are a valuable teaching resource. Those who try to protect their career turf will lose it. Those who share their career turf gain more because they are promotable.

“One more thing . . . Seek balance in what you do. Never focus your energy on just one thing. Get involved in activities. Cultivate friendships that endure. Treat people the way you wish to be treated. Broaden your scope of study. Do not fall into the trap of knowing almost everything about almost nothing. Your education should qualify you for a lasting career, not a hobby.

“I learned these things the hard way. You can learn them from me if you listen, remember and follow my advice.”

I had a lot of personal talks with my father about many subjects that were not taught in school. It stimulated a sense of discipline and discernment that proved highly valuable throughout my work career career and personal life.

My teenage life was more difficult than most. Dad was a business man, owner of his own companies, and had over 50 employees. He also was a prominent civic leader. I was the eldest son of a local celebrity. People expected me to fill my father’s shoes. Sometimes I had to take the heat for my father’s alleged mistakes. Dad also worked long hours. As the oldest son, I became the second father of the family. That was tough with three siblings and a baby sister. I had a part-time childhood. That was sad. However, it gave me a head start in becoming a responsible adult.

Mother and Dad always knew that I was destined for a career in science or engineering. I was always taking things apart to see how they worked. One day, knobs were missing from a bathroom wall light fixture. They found them on a Heath kit I was assembling in my photographic dark room. I also was into photography. I would buy bulk film and reload my cartridges. I also did my own developing and printing. One day, Dad brought home a used pin ball machine and a box of spare parts. My siblings and friends played pin ball. I had to keep it running.

My high school grades were good enough to be accepted in a major university's School of Mechanical Engineering. I had to register for military draft, so the college deferment was a welcome relief to my parents. However, I had a patriotic streak and was accepted into the university’s Air Force ROTC program. My eyesight did not qualify me for flying status, but my engineering major qualified me for “technical non-flying” status. Upon receiving my Air Force Commission, I was accepted at an Ivy League University. The US Air Force granted me a Category C Delay that postponed my tour of active duty for two years. I double-concentrated in managerial economics and finance to earn a Master of Business Administration (MBA) Degree.

I served my Country for thirty-seven months active duty, two more years in the ready reserve, three years in the standby reserve, and then resigned my Commission. I was a civilian at heart. After a few months of my first year of active duty, I married. My parents wanted me to learn how to live on my own and accept responsibility. We had to live within a budget, make car payments and live like everyone else . . . within our means. This included a stay-at-home mother of our first son.

I remembered another thing Dad said during one of our “teaching moments” together. “Son, it is not enough to live day by day. Emergencies will come along that must be met. Build up savings to get you through these emergencies gracefully when they come. Buy insurance for the big risks. Prepare for the certainties that burden a family with children. Do not get into debt that you cannot afford. Borrow only for things that save you money or are necessary. Share with your wife the financial affairs of the family so she can learn to manage the family income wisely and well when you are not around. Learn how to do her duties so you could manage the home when she is not around. You are each other’s backup. That is critically important now that you are a father.

“Also be generous in charitable causes with your time, talent and treasure. God expects us to care for each other. You may find that you will need outside help through the generosity of another person. Give to your church. God requires it

“If all is well and you live a long life together, you will eventually retire. Be aware that retirement is a lot easier to finance if you start early. If you earn an income for 45 years or so, and live another ten years, you must save enough and invest enough to have a retirement income. Salt that money away first so you do not notice it missing. ‘Take-home pay’ is net of both taxes, insurance, and personal savings.”

Little did I know that up to 80 percent of my retirement nest egg would be stolen from our family without any legal protection. Hold that thought because I am getting ahead of my story.

Throughout my career, I saved and invested like Dad taught me. My broker also was my financial adviser, or so I thought. We invested in an annuity that turned into a Ponzi scheme. We lost $4,000 at a time when that was one tenth of our annual income. That hurt. It also taught me to do my homework and not rely solely on another person’s advice.

We did all the right things to be financially responsible. Once our children were grown up, my wife entered the work force. Eventually, she became eligible for Social Security. I allocated the maximum in my employer’s 401-K plan. We started an IRRA for ourselves. We also participated in the employee “cafeteria plan” to minimize the cost of our family’s health care. We invested in a diversified portfolio. I purchased insurance to cover emergencies. We sacrificed to educate our children. We lived within our means.

When retirement came, we looked back and wondered if we had saved enough. When we married, bread cost 34 cents per loaf. It is now over $3.50 per loaf. Back then, gasoline was 28 cents per gallon. Now it is over $3.00 per gallon. When we bought our home, our mortgage and property taxes were less than one sixth of our current property taxes alone. What happened to the purchasing power of our life savings? More importantly, WHY did this happen?

Our family’s purchasing power eroded for many reasons. Your income and savings are eroding for the same reasons. They include the following:

The Federal Reserve central bank inflated the currency, eroding its purchasing power. This is a hidden tax upon personal savings and investment.

The Federal Government outspent its revenue so badly that the US National Debt soared to unsustainable levels. When we married, it was less than $300 billion. Now it is $17 trillion.

Organized labor received more pay for the same or less amount of work. Pay increases even exceeded the savings of their employers through increases in productivity. Their contracts included work rules and “maintenance of standards” clauses that stifled productivity savings.

Government at all levels outgrew the private sector. The cost of government choked return on investment. Taxes, tort lawsuits and legal expenses stifled business innovation and economic growth.

Employers had to raise prices to cover their increased costs. Their suppliers had the same problem and had to increase their costs.

Portable energy became more expensive to extract because the easy-to-reach resources were exhausted. Foreign price competition drove manufacturing away to foreign shores.

Government taxes and shoddy trade agreements made foreign trade uncompetitive. Government growth and interference consumed resources in competition with the private sector. Government regulation increased administrative costs and imposed outcomes that made no sense.All of these circumstances, and others not mentioned, combined to steadily erode the purchasing power of the dollar. Some people call it “quantitative easing” and “economic stimulation.” I call it “theft by swindle.”

It gets even worse. The Government taxes capital gains that are mostly inflation. We are paying taxes on government monetary and fiscal mismanagement. How is that for a ripoff?

Now we wonder how much longer we will have access to quality health care. We tried our best, played by the rules, and have less and less to show for our financial efforts through no fault of our own.

For your consideration,

Dad

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