The Best Investment Advice I’ve Ever Received

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Hi, I’m The Happy Homeowner and I’m interrupting Anna’s posting schedule today to tell you about the best investment advice I’ve ever received. Anna and I are swapping posts today, so you can head over to to read her post.

pennyThe best investment advice I’ve ever received is a very simple sentiment offered to me from my grandfather: Two pennies for me first, then one penny for them. Considering that I was 5 years old when he shared this tip with me, it makes sense that it’s rather elementary as I hardly understood the value of money at the time (I was much more focused on learning the perfect technique for devouring Oreos and what the Number of the Day would be on Sesame Street). But even now, some 25 years later, I often find myself thinking about this phrase and how it’s impacted my current financial situation.

The beauty of this simple phrase is that it alludes to a few major tenants of personal finance: Pay yourself first, save enough that it hurts, and maintain an emergency fund. Here’s how I currently apply my grandfather’s wisdom to my financial decisions and goals:

  • Two pennies for me: I have automated deposits set to max out my Roth IRA, contribute to my 403b, and funnel money from each paycheck into long-term savings. Additionally, my emergency fund is intact and sits at a healthy $20K. These transactions are mindless because they happen without any effort on my part, month after month, but they are vital as they are the building blocks for what I hope will be a very successful financial future. In keeping with the 2:1 ratio my grandfather championed, I work hard to maintain a savings rate of 50% of my income or more.
  • One penny for them: After all of my automated savings deposits are made, I next divvy up the remaining funds according to importance. First up is the mortgage, insurance, condo fee, and food. Next, the utilities and miscellaneous expenses such as gasoline and pet care. Finally, the small sum leftover is earmarked for fun. If extra income comes my way, it’s automatically put towards one of my various savings goals and I strive to keep my expenses as low as possible in order to continue to boost my savings rates (not having cable, packing my lunch, not shopping mindlessly, etc.)

While I certainly fell off the financial savvy wagon in my early 20s (I once had over $14K in credit card debt but paid it off in less than a year once I finally pulled my head out of the sand), I’ve never lost sight of my grandfather’s advice. I’m happier than ever with my financial progress, and I continue to work hard in order to keep those two pennies for myself.

What’s the best financial advice you’ve ever received?


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