The financial gurus next door

In 2003, I left the Beverly Hills apartment I’d rented for years and bought a Spanish bungalow near Manchester and Western in Morningside Circle. The last thing I expected to get from the move was a lesson in financial planning. But as I watch so many scrambling to weather this recession, I’m both humbled and impressed by how the longtime homeowners in my South L.A. neighborhood are riding out the financial storm.

My neighbors Thurman and Etheline bought their home nearly 50 years ago. They paid their mortgage, raised two kids, sent them to college and worked until they retired with pensions. Things they invested in were low risk, cautiously considered and meant to last. The Mercedes that Thurman drove until it stopped running must have been more than 20 years old. When he died last summer, his burial plot had been purchased years earlier. He may never have been what I once considered “rich,” but he and his wife carefully planned for financial security and slowly achieved it.

As the recession strengthens its grip on California, it’s worth considering the lessons of my neighbors. Six of the families on my block have been in their homes for more than 40 years. Some houses have been passed on to adult children who remain in them. Some now have several generations living together. Only one house is empty, and it’s in escrow. Only two homes are rentals; the rest are proudly owner-occupied. A few people are out of work, but that’s the case even in better times. This neighborhood of Spanish-style bungalows and English Tudors with manicured lawns still looks good.

Folks here have always known how to get by in tough times. They grow fruit trees and vegetable gardens, clip coupons, re-sole shoes and repair clothing. They save on gasoline at Costco and find bargains at the dollar store. Most will live through the recession the way they’ve been living -- within their means.

Of course, this is South L.A., not paradise. There are problems, and they have worsened. Youth programs have been cut, resulting in more graffiti on our commercial corridors and more kids selling drugs. A prosecutor for the area tells me that as the economy has faltered, crime has increased, especially home burglaries being committed by unskilled workers forced out of jobs that skilled workers have taken because of layoffs.

The chair of the neighborhood council says that there have been more than 50 foreclosures in our area in the last year. Perhaps I’m just fortunate to be on a block where there are stable households. But as I drive through my community, it really doesn’t look much different than it did before the economy tanked. A couple of businesses have closed on Manchester Boulevard, a hair-replacement (toupee) shop and a bakery, but two new businesses have opened down the street, a pizza place and a sandwich shop. Community-based organizations have lost funding and cut services, but churches, beauty shops, mortuaries, car washes, nail salons and even nightclubs are still operating, though they’re certainly feeling the pinch.

When I moved here, the plan was to fix up my house, then sell it and buy something “better.” As it turned out, I relished the low overhead and stayed put rather than trading up. As a self- employed screenwriter, I found myself able to relax when I wasn’t working because my expenses were manageable. Watching my neighbors has shown me the value of appreciating the home I already have. Slow and steady seems to be a good way to navigate the long, bumpy road back to financial stability.