The phrase stuck when Tom Brokaw published his 1998 book about the generation that lived through the great depression, fought in World War II, and ushered in an era of productivity, opening the door to the affluence we enjoy today.
While it takes an entire novel to fully appreciate the impact of the generation, a few key lessons can be applied to managing your finances today.
Don’t overcomplicate things
Times are definitely a changin’ - faster now than ever before. It can be hard to keep pace and make sound, educated decisions. The greatest generation teaches us to keep things simple and focus on the elements you can control. That’s our approach when it comes to investing. There’s not much we can control in the market, but by sticking to a simple approach - focusing on the big picture, rebalancing on rules rather than gut feelings, and aiming for long term growth - we can create smart portfolios that put us on a good path to our goals.
Be frugal, but not cheap
Quality doesn’t have to be expensive. The greatest generation is epitomized by those who lived within their means, fixed things themselves, and thought function before fashion. When it comes to investing, that approach pays huge dividends, and helps us control costs. Some of the most trusted fund managers in the industry are the ones with the lowest fees. Innovations in the advice space also allow us to get advice from experts without breaking the bank. Frugal spending today means more money saved for when it counts.
Stop kicking the can down the road
Pick up a paper any day and you’ll find a story about rising debt levels of Canadians. While financial innovation is a significant factor in the uptake, the greatest generation did not indulge in debt the way we do today, especially when it came to buying ‘want’ items on credit. Consumerism debt, like credit cards, carries large interest rates and can get overwhelming if it’s not paid down immediately. The lesson? Use debt to pay for things that will improve your future earning power, like a home or school, and avoid using debt to pay for things today that you could do without.
A century ago, our economy was much less robust and the standard of living was poorer. It’s important to remember these lessons and consider how past generations used them to build the foundation upon which we stand today.