Uncle’s Story Part 2: Digging out of Poverty

Today, I’ll be sharing the second part of my uncle’s story.  If you missed, Part 1 you can read it here.  Once my uncle was scooped up by the red cross and resettled in the US, he started to rebuild his life with his new bride Sophie.   The two of them worked about 10 years before their first child was born and then my aunt stayed home.

I’m sure a lot of people wonder how someone can come to the states with only the shirt on their back and eventually build up a great fortune. Well, I’ll tell you how my uncle did it.   First and foremost, he had a perspective that few get to have this day and age.  Like my mom, he grew up in a one room farmhouse with 9 siblings, no running water or electricity.  Their primary transportation was the one family horse.   Moving to America where he instantly had all these things was a gargantuan lifestyle upgrade.

Back in the 40’s and 50’s not many people ate out, so that wasn’t even something that was common back then, so there would be no spending there.    For housing, he rented a crappy apartment in a crappy part of town until he saved enough money to be able to buy a rental property with cash.  They both worked as much overtime as possible.  He worked at a factory that made military weapons.  I’m sure it felt good to work somewhere that helped lead him to his freedom.  My uncle’s first property was a 6 unit apartment building purchased for $16,000.    It was cozily nestled between a funeral home and the highway.  It was not a prime location. It was not in a good neighborhood or good school district. It was not in good condition.  My mom lived there for a while too and she was convinced the house was haunted and the dead people from next door were coming to visit her at night.

Although he knew nothing about plumbing (how could he, he had none), he taught himself how to be a handyman.  He did all the repairs at his house by taking apart broken things, seeing how they were put together and doing trial and error until he figured out how something went together.    He never ever outsourced anything.  If he couldn’t figure out how to fix it, he didn’t do it.   After about 10 years of collecting rent from these properties and working, he was able to move to a nicer part of town, and bought another 3 family neighborhood in the old Jewish section of town.  By then, the Jewish people were moving into big single family homes and he was able to snatch up a nicer 3-decker.  This one had hardwood floors, built ins, tile bathrooms, the works.  It needed work too, but it was 100x nicer than his last place.  He also claimed to buy a bunch of their furniture too, because again, the deco furniture was being upgraded to more modern styles and he was able to furnish his home with quality used furniture that still is in use at my cousin’s home today.

By this time, he was getting rent from 7 apartments and it was a good thing too because now it was the 60’s, the war was long over and he  got laid off.  He was always bitter about losing his job, but this is the point that he became a handyman and started working for himself.  His time was occupied with fixing and managing his own rental properties and he also started roofing and siding houses.  This was the toughest kind of construction work that yielded the most amount of money, so that’s what he did.  I think he called some roofers and eventually ended up finding a Lithuanian man who he learned the trade from.  Roofing is one of those professions where you are always looking for help because most people just can’t hack the physical toll it takes on your body.  Once my uncle learned the trade from him, he went out on his own but they still helped each other on different jobs.   My uncle was roofing until well past retirement age.

My uncle amassed a small fortune.  Here are the classic things he had going for him.

He had multiple sources of income

In addition to social security, a pension from his days at the bomb factory, and a reparations check from the war, he also had substantial rental income.   His rental income alone was enough to replace a very good paying salary.  If you think about how much money 5 three bedroom and 3 two bedroom apartments can fetch in a city these  days, you’ll get an idea of the type of income he was generating monthly.   He did all of this without investing a penny in the stock market or borrowing a single cent from anybody.

He spent less than he earned

Unfortunately, after he settled his family in his newer rental, I don’t think they saw another new piece of furniture enter that house for the next 40 years. His broken couch leg was replaced with a brick and he had this Archy Bunker-type chair that everyone hated and wanted him to toss.  It was still pretty comfortable so I could see why he wanted to keep it but he did border on miserly.  He really hated spending money and was always afraid of falling back on hard times. He very much had that depression era mentality.   The one thing he splurged on was his pickup truck. He would buy a new truck about every 15 years.

Although this is a good thing to do when you’re digging out of poverty, for a lot of immigrants it’s often hard to make that transition and let a little lifestyle inflation creep in.   His idea of lifestyle inflation was to quit roofing so that he’d have more time to fish and forage.  He never took vacations, he never bought good cuts of meat or upgraded worn out things in his home.   He spent his free time during retirement fishing, berry picking, mushroom picking, collecting firewood and tending his garden.  His hobbies were all about reducing his grocery and heating bills.  He and my mom enjoy those hobbies immensely but they are practical in nature too.

I’m sure he was often glad that he sponsored my mom to come over to the US, because the two of them spent a lot of time together, especially the last 10 years of his life.  I had moved out of town by then and my aunt had a stroke and couldn’t do as much anymore. He would take my mom grocery shopping and stop over every couple of days to see her.  Babci does not skimp on food, so she would always feed him the stuff that he was too cheap to buy for himself.  It really was a win/win situation.  They were very close.

He Didn’t Have a Sense of Entitlement

If I think about when people fail to dig out of poverty these days, I think the two biggest barriers to wealth are laziness and a sense of entitlement.   People don’t want starter homes.   If I showed you my uncle’s starter apartment buildings, I bet 95% of the people I’d poll would say “I could never live in a place like that…It’s too loud, it’s not safe, its blah blah blah.”  Even Babci wouldn’t go back there because it’s haunted.

Many people think their dreams aren’t possible because they are too lofty so they give up.  The problem is that someone’s dream is no longer home ownership, it’s home ownership in a nice suburb, with a minimum of 4 bedrooms, hardwood floors, granite countertops and a 2 car garage.    In most parts of the country, home ownership isn’t out of reach because housing is too expensive. It’s out of reach because they refuse to live in the neighborhoods they can afford right now.

Being a landlord is a hassle and a lot of work.  Anyone who will tell you it’s easy has just gotten lucky.   It does require hard work but it also yields tons of income.  I don’t know why more people don’t buy duplex’s and start there.  In most cases, you can have your mortgage paid for by your rental income and save your own income towards that next house.

Lastly, He had a Can Do Attitude

If I think about the last thing that made my uncle successful, it was that he believed he was capable of learning anything.   Even though he grew up without electricity and plumbing that didn’t stop him from learning how to do electrical and plumbing work for his own homes.  He learned how to maintain his car and fix brake pads…he learned every skill he needed for survival.

Do you think he ever stopped and said “I can’t learn how to change the oil in my car…now if you asked me how to shoe a horse, I can help you, but this car stuff, well, that’s out of my league.”  Of course not.  Every one of us should believe in ourselves and our capacity to learn. From personal experience, I’m convinced that nothing is hard if you put the time in figure it out.   Sure you’ll be slow and make mistakes along the way, but with enough practice you’ll be a pro in no time.

The next segment will be about my uncle’s family…who he brought over from Poland, his children, and the last and saddest days of his life.

 

Tagged as: Frugal Living, how immigrants make it, saving a fortune, starter houses