When Dad announced that he had purchased a speedboat, I was thrilled. Just eleven at the time, I knew my brother and I would no longer be the only kids spending summers at Lake Mahopac just sitting on the beach. Now we could water ski any time we wanted, no longer at the mercy of invitations from other kids.
Grandma was appalled at her son’s purchase and thought it was fiscally reckless. Privately she told me Dad had taken a loan to buy the boat. When she and Grandpa bought two different summer homes, first the one at Lake Hiawatha, and later the one at Lake Mahopac, they paid cash.
The brownstone on the Lower East Side housing Grandpa’s medical office, railroad flat, and two rental units, had been bought with cash in the early 1920’s. True, the reason they needed no mortgage is that Grandma’s parents helped with the purchase.
The summer homes she and Grandpa purchased were for the benefit of their grandchildren, as was the bulk of their spending. Each week I would see Grandma hand Dad cash that he would deposit in bank accounts for my brother, sister, and me. Those bank accounts paid for all college expenses, including the dorm and the books, plus medical school for my brother.
In ways that might elicit a smile or two, Dad was in a position similar to that of Judge Sonia Sotomayor, the Supreme Court nominee. He didn’t need to pay for anybody’s college, and neither does the judge, who has no children. He too worked in government, and though the pension was certainly not as generous as that of a federal judge, I think he figured he’d be o.k. He later had a Thrift Savings Plan (TSP), the government worker equivalent of a 401K plan.
As Harvard economics professor Greg Mankiw notes in his blog, because federal law does not require that a TSP be reported, we don’t know if Judge Sotomayor has one. Still he notes that his grandmother would be very disapproving that a woman who earned $205,330 last year has a net worth of just $740,000.
I know Grandma would be equally disapproving, and not just because she lived in different times. Her relationship with money was different. She viewed one’s net worth as a source of power and independence in and of itself.
There’s a vestige of Grandma in me. Last month I took the advice of a personal finance column, suggesting that I divide my monthly mortgage payment by 12 and then add the result to each payment – with the goal of paying the mortgage off more quickly. If I told Grandma what’s happened to my 401(k), she might suggest that the balance would be even lower had I not started contributing the max after paying for Daphne’s college.
I’m not suggesting it’s inappropriate to require financial disclosure from a Supreme Court nominee. If some of the judge’s law school classmates making considerably more were asked to reveal their net worth -- say in a divorce filing -- the grandmothers would be even more disapproving of the spending habits of the well-compensated.
But there’s also a side of me that would ask both grandmothers to be less judgmental of other people’s spending. Unlike many of the Ivy Leaguers with whom she went to Princeton and Yale Law School, Judge Sotomayor doesn’t come from money, so it’s harder for her to accumulate significant wealth.
According to The New York Times, Judge Sotomayor lives in a 980 square feet condo in Greenwich Village -- which while a lovely area, is hardly the lap of luxury. She also drives a White Saab convertible, and likes traveling and dining out. Is this really so out of the ordinary for a divorced woman working long hours and living alone?
The Times says she also contributes to the support of her mother and stepfather, is inclusive when she throws a party, and gives nice holiday gifts to her clerks and others who work for her. How can we begrudge her these simple pleasures?
Greg Mankiw’s Blog
gregmankiw.blogspot.com/2009/05/scotus-appointee-is-spender.html
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