Marrying someone kind and smart, always saving half of our income, investing in low-cost mutual funds, continuing to invest no matter what, always learning and growing in my career to earn more. None of my good decisions have to do with real estate.
Best decision(s) in your financial life
Re: Best decision(s) in your financial life
Don’t overbuy on housing. Invest half your income in TSM index funds. You will be financially independent in 10 to 20 years.
- lthenderson
- Posts: 8525
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Re: Best decision(s) in your financial life
Figured out what I needed to retire and paid myself first. I then lived on less than the rest and invested the leftovers so that I could retire even earlier. A very close second was marrying someone who thinks about money the same way I do but that wasn't really a decision more than just dumb luck.
Re: Best decision(s) in your financial life
Was in a similar situation as DW started off slower in her career while I excelled during dot com bust but as tech really hit its stride in the last 10 years so did her career (director in dev) so I just took a backseat and take care finance/some of the chores/childcare duties. She'll be retiring in April and she'll take over some of the childcare work while I coast at work. So it is just a balancing act between the 2 and support whomever is doing the heavy lifting at the time. At the end, both will hope to enjoy the hard earned reward. my 2 centmikejuss wrote: ↑Tue Feb 23, 2021 4:10 pmWhat are your feelings about that? I'm in a similar position, uneasy about it, and trying to adapt. Relationships are indeed a balancing act--and in ways that you least expect.stoptothink wrote: ↑Tue Feb 23, 2021 4:07 pm
Not going to share (too much of) my anecdote, because it is pretty much this. When we met 8yrs ago, we were on completely different levels (education and career-wise) and the plan was for her to be a SAHM. That's changed (to say the least), and if anybody is staying home in the near future it is likely me.
Re: Best decision(s) in your financial life
I had a co-worker who dumped all his tech stocks and mutual funds at the starting 2000 into cash because he was finalizing his divorce. Said he didn’t want her to get one penny more than what she thought she was getting. Ended up being the best decision of his life.BrooklynInvest wrote: ↑Tue Feb 23, 2021 3:47 pm Market timing my divorce for when I was already broke...
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Re: Best decision(s) in your financial life
Realizing that I am perfectly happy living below my means and walking away from status things.
My "Civic factor". I drive a 2009 Honda Civic full of urban battle scars and 105K miles. I consider it just recently broken-in. When I see the younger me in the next lane in a new German whatever all that comes to mind is the depreciation and dealer service fees. I literally used to be that guy (fancy Audi). So much happier now.
My kids in 5 years: "It's OK dad, drop us off here and we'll walk the last block to school"
My "Civic factor". I drive a 2009 Honda Civic full of urban battle scars and 105K miles. I consider it just recently broken-in. When I see the younger me in the next lane in a new German whatever all that comes to mind is the depreciation and dealer service fees. I literally used to be that guy (fancy Audi). So much happier now.
My kids in 5 years: "It's OK dad, drop us off here and we'll walk the last block to school"
Re: Best decision(s) in your financial life
Am glad I stuck with such similar BH approach through my working life, including taking advantage of 401K company matching. Do recommend it to most anyone but I made a good call to transition away from it once net worth hit $1M with BH method, slowly moving into direct private equity/loans (not PE funds). $1M NW (outside home) qualifies for 'accredited investor' in private world, opening up many more opportunities. Moving to Self-Directed IRA allowed investing 401K/IRA buildup into PE world. Not that sticking with BH strategy would've been a poor call but direct PE/loans eventually got me to top 1% territory. And I still live small and sometimes shop at Dollar Tree.drummerboy wrote: ↑Tue Feb 23, 2021 2:50 pm Obviously many Bogleheads principles are perfect: Low Fees, 3 or 4 Index Funds, Live below your means, start early, time in market, etc.
Re: Best decision(s) in your financial life
Reading “The Millionaire Next Door.” Then learning about Bogle philosophy and putting it into action, about 20 years ago. By choosing an AA based on risk tolerance I wasn’t tempted to sell in 2008 or last March. I don’t tinker. I rebalance on my birthday. I ignore the noise. And by investing considerably every payday for the last 2 decades I have made an awful lot of money, and in my kids’ college funds as well.
Nobody knows nothing.
Re: Best decision(s) in your financial life
Purchasing and reading the book "The Smartest Portfolio You'll Ever Own: A Do-It-Yourself Breakthrough Strategy" by Daniel R Solin; as a result I found Bogleheads.org
“Manifest Plainness, Embrace Simplicity, Reduce Selfishness, Have Few Desires” - Lao-Tzu
Re: Best decision(s) in your financial life
Interesting that some people mentioned not having kids as being one of the best decisions of their financial lives. In our case, the opposite was true. Before kids, my wife and I both worked, and we had well-paying, comfortable 9-5 jobs. After the first child, the wife wanted to stay home to raise the baby, and I fully supported that decision. In order to make up for her lost income, I looked for a more challenging job in the same field, and was able to triple my income in a few years. A decade later, that position lead to me starting my own company. Now my wife and I work together, and we are much more successful than if we had both stayed on in our original positions pre-kids.
So, from my perspective, having kids was the best decision of my financial life.
So, from my perspective, having kids was the best decision of my financial life.
Re: Best decision(s) in your financial life
While I understand it may not be every man's cup of tea, I would argue any man who has lived in or near poverty would revel in it. You'd be hard-pressed to get much sympathy from the general public for not being a "manly man" if it means having great household income. It's like taking bad-tasting medicine. Whether you like it or not, you know it's good for you. If it continues to bother you and you have a healthy relationship with your spouse, you might want to discuss it and see if you can work it out somehow or if just getting it off your chest helps get over it. The fact that you're on this forum probably means you have a hand in managing your family finances, which I think it is a great complement to a high-earning spouse. My wife appreciates that I teach her about investing, but she doesn't really want to do it herself or put in the time to research it, and she has even said she would rather just pay an advisor if she didn't have me helping her out. Therefore, I think it's safe to conclude that we're both better off as a whole if we both continue to focus and do better at what we're good at. Whether or not she makes more than me is largely irrelevant.
Re: Best decision(s) in your financial life
One of the best lines I ever heard about relationships when a person was asked if they had a 50/50 relationship with their husband. She said "sometimes it's 70/30 or 60/40 and sometimes it is 100/0. As long as you can come to 100% together that is all that matters."mikejuss wrote: ↑Tue Feb 23, 2021 4:10 pmWhat are your feelings about that? I'm in a similar position, uneasy about it, and trying to adapt. Relationships are indeed a balancing act--and in ways that you least expect.stoptothink wrote: ↑Tue Feb 23, 2021 4:07 pmNot going to share (too much of) my anecdote, because it is pretty much this. When we met 8yrs ago, we were on completely different levels (education and career-wise) and the plan was for her to be a SAHM. That's changed (to say the least), and if anybody is staying home in the near future it is likely me.dboeger1 wrote: ↑Tue Feb 23, 2021 3:42 pm Before just an hour ago or so, I might've put something other than the cliche spouse thing, but my wife just found out today she's getting a surprisingly huge bonus from work and her boss more or less implied that she would be getting a promotion soon. That means she's making more money and accelerating her career at a far faster pace than I am. I started out earlier with a better degree in a position with seemingly more upside potential, but I just don't have the same drive to climb the corporate ladder, compete for top positions, negotiate for higher pay, etc. She started out in a low-paying position for a pretty mediocre company, switched to a better company which more than doubled her income overnight, got a substantial raise after her first year, and is now getting big bonuses and promotions. Meanwhile, my income has only risen very gradually, but I have also been the Boglehead of the family and convinced her to max out retirement accounts and whatnot.
The funny thing is, when we got married, her income potential was the last thing on my mind. I know this has fallen a bit out of favor, but I always just assumed I'd be the traditional male breadwinner. I work in tech and my work is doable remotely, plus I have many side projects I'd like to pursue. With her career going the way it is, there's a good chance I end up becoming a stay-at-home dad when we eventually start having kids. I love it. I know it's kind of cheesy when people describe marriage as a sort of team relationship, but having a spouse who just goes off and excels on their own outside of whatever I'm doing really feels like inheriting a great passive investment that goes and makes money on the side (I know it's not passive for either of us, but it's not like a 2nd job either). It really reduces a lot of the stress I felt back when I was making more money and having to plan how to save and invest it for our future. Even though my work isn't being reduced in any way, it feels like a massive weight has been lifted off my shoulders, because I'm no longer carrying it alone. Heck, I'm in the process of applying to higher paying jobs just so I can get back to carrying at least half, haha.
Marriage involves balancing a lot of variables. Money is just one of them. I would never suggest young people looking to get married base their choice of partner solely on income potential. But knowing what I know now, man, I don't think it's possible to overstate the value of 2 incomes that could each support the family on their own. I realize that's not possible for everyone, but I recommend people at least consider that in their decisions, both before and during marriage. It provides so much overhead for savings, vacation, buying a home, vehicles, etc. It really is amazing. My mother passed away when I was growing up and the medical bills and raising kids alone crushed my father financially. He has yet to fully recover and quite frankly probably will never have the financial success he once had before that whole ordeal. I wouldn't wish that struggle on anybody. I don't want us to be DINKs forever, but I'm in no rush to change that, either
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Re: Best decision(s) in your financial life
The opportunity to serve a career in the military - very thankful for my friends who coaxed me into looking at the opportunity and the recruiter who came by our college and offered me a second chance at an interview.
Last edited by RogerWilco on Tue Feb 23, 2021 9:25 pm, edited 1 time in total.
Re: Best decision(s) in your financial life
When I was about 30 and ready to buy my first house I left the Bay Area, which has always been expensive, and moved to an area with a higher quality of life where houses cost maybe a fifth of what they cost in the Bay Area.
The other big one was being lucky.
It easy to think that if you make the right choices that things will work out great but there is also an element of luck involved.
There are not doubt a lot of financial idiots out there but a lot of the people that I have seen that have financial problems have them because they were unlucky and they or a spouse or kid or parent had health problems, layoffs, etc which were not really because of things they had done wrong, it was mainly just that they were unlucky.
The other big one was being lucky.
It easy to think that if you make the right choices that things will work out great but there is also an element of luck involved.
There are not doubt a lot of financial idiots out there but a lot of the people that I have seen that have financial problems have them because they were unlucky and they or a spouse or kid or parent had health problems, layoffs, etc which were not really because of things they had done wrong, it was mainly just that they were unlucky.
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Re: Best decision(s) in your financial life
Throughout my life i have stuck to the old adage of having only one job, one house and one spouse. Till death do us part. The grass is not greener on the other side. Tend to your own garden and keep it growing. Fidelity and frugality are the fundamentals. Stick to this and live a life of stoic joy.
Re: Best decision(s) in your financial life
I made two different decisions that worked out well. I bought a LTC Policy as a retirement option the same month I retired. The plan will pay 113 dollars a day with no time limit or maximum payout limit. The second was selling my large home and investing the proceeds with Vanguard. I am currently paying for my Assisted Living with current retirement income and LTC insurance with Vanguard assets as a backup.
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Re: Best decision(s) in your financial life
Studying engineering at university, instead of something less practical.
“Now shall I walk or shall I ride? |
'Ride,' Pleasure said; |
'Walk,' Joy replied.” |
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― W.H. Davies
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Re: Best decision(s) in your financial life
1. Attended a financial seminar when I was in High School which taught me about managing credit, the power of compound interest, saving, investing and developing a financial plan.
2. Utilized 401K as soon as one was available.
3. Read the book "The Simple Path to Wealth"
4. Married my wife - This is apparently a taboo answer, but connecting with a person who is also fiscally responsible and onboard with long-term financial goals was/is important. I didn't realize at the time, but I do now.
2. Utilized 401K as soon as one was available.
3. Read the book "The Simple Path to Wealth"
4. Married my wife - This is apparently a taboo answer, but connecting with a person who is also fiscally responsible and onboard with long-term financial goals was/is important. I didn't realize at the time, but I do now.
- ruralavalon
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- Location: Illinois
Re: Best decision(s) in your financial life
I lucked into a well-paid profession, doing work that I almost always enjoyed.
I married a woman who is not a big spender.
We switched from a full service broker at a major national brokerage to do-it-yourself index investing.
We contributed as much as we could every pay period.
I married a woman who is not a big spender.
We switched from a full service broker at a major national brokerage to do-it-yourself index investing.
We contributed as much as we could every pay period.
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Re: Best decision(s) in your financial life
By far my best financial decision has been to invest in low cost index funds (VFIAX/VTSAX)
Re: Best decision(s) in your financial life
i mean i don’t really know for sure but, not marrying or having kids....i think my ability to buy houses, live a middle class life, and save (almost as much as I should ) has all benefiting from those decisions.climber2020 wrote: ↑Tue Feb 23, 2021 2:33 pm 1) High savings rate
2) No kids. This wasn't primarily a financial decision, but it had a huge secondary effect on net worth progression.
Though, I guess it wasn’t a fully decision I actually made but...
ScoobyDoo!
Re: Best decision(s) in your financial life
- My first boss at my first 'real' job sat down and showed me the difference between a $10k yearly investment in the first 10 years of career compared to $10k in the last 10 years of your career (message: invest early, use compound interest)
- That same boss told me about a '401k' plan, he basically said 'put in as much as you can, and never stop' -- I wish he had told me which fund to invest in as it spent the first few years in a money market !! I did, early in my career, turn off my 401k contributions for about 6 months because I needed the cash (which I kick myself to this day)
- In the great recession (2008) I purchased about $60k of $MEGACORP, I remember telling my wife the company was WAY too punished, had a ton of cash on hand, and made products that everyone loved. That has turned out to be a really good decision (and a testament to either dumb luck of my shrewd acumen). I know this is not very bogle-headish but I was sort of 'in the industry' and knew it should be valued at least 2x (it turns out I grossly misestimated how much it would grow... it ended up being considerably more than 2x)
- Lived well below my means for most of my life (drove cheap cars, didn't take expensive vacations). It's only in the last few years that I've opened up the purse string to enjoy life a bit more (not worrying as much about how much things cost)
- started and ran my own business on the side for about 10 years. This was very satisfying from a personnel point of view, but also let my wife quit work to take care of our two young children (I effectively replaced her salary) without dipping into our investments (this occurred from 2006-2016)
- invest steadily in my company stock purchase program (again, I mostly just accumulated stock which has worked out well but arguably a more bogle-headish approach would have said sell it to invest in index funds)
- I don't include my wife as she wasn't a 'financial decision' (but certainly picking someone who has compatible goals makes the above much easier!)
I would have written a shorter letter, but I did not have the time. |
- Blaise Pascal
Re: Best decision(s) in your financial life
Choosing a spouse who shares the same investing/saving/living-within-our means philosophy. 37 years and counting!
- quantAndHold
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Re: Best decision(s) in your financial life
No decisions I made were as important to my success as being in the right place at the right time and getting lucky.
- MikeWillRetire
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Re: Best decision(s) in your financial life
Ha! Well done!BrooklynInvest wrote: ↑Tue Feb 23, 2021 3:47 pm Market timing my divorce for when I was already broke...
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Re: Best decision(s) in your financial life
I’d say: To read a lot, starting very young.
I started with Suze Orman, because she was the only woman I saw in that space at the time...and she spelled out in plain language financial concepts. She also would say “no” to people, in a time when everyone supposedly could afford everything.
I moved on to Dave Ramsey and The Millionaire Next Door. It was the antidote to the overlegveraged use of OPM that became quite popular in some circles, where someone “owns” an empire, yet every item has a loan on it and the pea moves around under the shell so much, it’s impossible to tell what’s really going on.
(Blindly following his steps about 13 years ago got us to reprioritize and be efficient and focused. Things he said to do, we did -reluctantly sometimes, but we submitted to the plan, as he says - and it worked way beyond what we could understand at the time we began.)
Then I added the FIRE crowd and Bogleheads as an alternative view from work 40+ years in one j-o-b and ‘marketing must lead to consumption’. That, and our 3-legged stool for retirement is us, us, and us.
I suspect that at every stage of this evolution, I talk about it too much to DH, but he takes the pearls of wisdom and runs with it.
I started with Suze Orman, because she was the only woman I saw in that space at the time...and she spelled out in plain language financial concepts. She also would say “no” to people, in a time when everyone supposedly could afford everything.
I moved on to Dave Ramsey and The Millionaire Next Door. It was the antidote to the overlegveraged use of OPM that became quite popular in some circles, where someone “owns” an empire, yet every item has a loan on it and the pea moves around under the shell so much, it’s impossible to tell what’s really going on.
(Blindly following his steps about 13 years ago got us to reprioritize and be efficient and focused. Things he said to do, we did -reluctantly sometimes, but we submitted to the plan, as he says - and it worked way beyond what we could understand at the time we began.)
Then I added the FIRE crowd and Bogleheads as an alternative view from work 40+ years in one j-o-b and ‘marketing must lead to consumption’. That, and our 3-legged stool for retirement is us, us, and us.
I suspect that at every stage of this evolution, I talk about it too much to DH, but he takes the pearls of wisdom and runs with it.
Please spell out new acronyms. Thank you.
Re: Best decision(s) in your financial life
Why do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
Re: Best decision(s) in your financial life
Kids are expensive but well worth it in our case.OldSport wrote: ↑Tue Feb 23, 2021 8:32 pmWhy do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
Re: Best decision(s) in your financial life
This is really sad in that I have a close friend of mine who is 44 and single in a serious relationship, and is waffling on what to do with the relationship solely due to having kids.
He is in the tech field and can EASILY lean FIRE (2/3 income replacement with 4% withdrawal rate), and is hesitant to continue the relationship (they are REALLY good together otherwise) as she really wants kids, and he is very apprehensive.
I have kids and it's not that bad. If anything has motivated me to move up and take assignments where I've made more.
And it wasn't that expensive. DW stayed at home while kids were young, so we didn't have childcare costs. DW didn't have a high paying job before, so we didn't find kids to be that expensive. We dont spoil our kids - wealthy grandparents do that.
He is in the tech field and can EASILY lean FIRE (2/3 income replacement with 4% withdrawal rate), and is hesitant to continue the relationship (they are REALLY good together otherwise) as she really wants kids, and he is very apprehensive.
I have kids and it's not that bad. If anything has motivated me to move up and take assignments where I've made more.
And it wasn't that expensive. DW stayed at home while kids were young, so we didn't have childcare costs. DW didn't have a high paying job before, so we didn't find kids to be that expensive. We dont spoil our kids - wealthy grandparents do that.
Re: Best decision(s) in your financial life
You still have to buy food and clothes for them. I'm too cheap. Anyway, each to their own. We need kids to pay off today's debts.OldSport wrote: ↑Tue Feb 23, 2021 8:32 pmWhy do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
Re: Best decision(s) in your financial life
What all do you find expensive about kids? We are not planning to pay for private school or private university. We did the math at it makes no sense. DW got her degree after having kids, went to a community college, did extremely well, and finished at a Tier 1 University, did great, and has a job at a level most undergrads at private schools get.smitcat wrote: ↑Tue Feb 23, 2021 8:37 pmKids are expensive but well worth it in our case.OldSport wrote: ↑Tue Feb 23, 2021 8:32 pmWhy do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
We probably spend the same on vacation, housing, and vehicles, just maybe have different experience and have larger suburban house vs smaller closer in property and a larger SUV vs a smaller SUV, but don't think we spent any more than we would have.
Re: Best decision(s) in your financial life
True, but I don't consider that expensive. Our kids are probably gifted 75% of clothing, and food isn't that expensive. We don't take the kids to fancy restaurants.SrGrumpy wrote: ↑Tue Feb 23, 2021 8:44 pmYou still have to buy food and clothes for them. I'm too cheap. Anyway, each to their own. We need kids to pay off today's debts.OldSport wrote: ↑Tue Feb 23, 2021 8:32 pmWhy do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
Airplane flights are the one thing that is a bit more expensive, but I wouldn't call it that bad, as we're not traveling overseas with the kids or flying in a premium cabin.
Re: Best decision(s) in your financial life
I read stuff like this and shake my head.Silversides wrote: ↑Tue Feb 23, 2021 5:12 pm Realizing that I am perfectly happy living below my means and walking away from status things.
My "Civic factor". I drive a 2009 Honda Civic full of urban battle scars and 105K miles. I consider it just recently broken-in. When I see the younger me in the next lane in a new German whatever all that comes to mind is the depreciation and dealer service fees. I literally used to be that guy (fancy Audi). So much happier now.
My kids in 5 years: "It's OK dad, drop us off here and we'll walk the last block to school"
Frugal now equals a 12 year old car?
Yes, I did.
Both ways, uphill, in the snow.”
Re: Best decision(s) in your financial life
Got an engineering degree (2 actually- BS and MS degrees) & applied it to the fullest by working at a exceptional company for 38 yrs.
Worked hard and enjoyed it, but I still made all the kids sporting and school events.
Started saving 10-15% of salary in 401k all career. Never missed the amount. Pay yourself first!
Refinanced home loan from 30 yr to 15 yr when rates dropped and house paid off "early". Saved more.
Drive your cars to 170-200k miles before replacing.
Lived modestly and was very happy.
Worked hard and enjoyed it, but I still made all the kids sporting and school events.
Started saving 10-15% of salary in 401k all career. Never missed the amount. Pay yourself first!
Refinanced home loan from 30 yr to 15 yr when rates dropped and house paid off "early". Saved more.
Drive your cars to 170-200k miles before replacing.
Lived modestly and was very happy.
Re: Best decision(s) in your financial life
Buying term life insurance for my wife and myself when we started having kids, though it would be nice if I had done more on her policy as things turned out a little differently than I might have imagined. Regardless it's made a huge difference in the last year and I'm not worried about finances anymore.
- AerialWombat
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- Location: Cashtown, Cashylvania
Re: Best decision(s) in your financial life
.....
Last edited by AerialWombat on Thu Apr 01, 2021 10:56 pm, edited 1 time in total.
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
Re: Best decision(s) in your financial life
Similar Experience. I bought Enphase Energy (ENPH) at $0.80 and sold it at $30. Good deal but it hit $200 this month. The idea of being able to retire off a $4,000 investment sometimes drives me crazy. Just have to shake it off and buy VTSAX. Then it becomes a "best decision" with no regrets and anxiety.
Re: Best decision(s) in your financial life
1. Switching from a bank to a credit union.
2. Discovering Jack Bogle => index funds and then Vanguard
2. Discovering Jack Bogle => index funds and then Vanguard
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Re: Best decision(s) in your financial life
Started stock investing in an automatic way at 20 years old.
Re: Best decision(s) in your financial life
1. Great parents who were role models for living below your means
2. Same great parents who paid for my college and medical school (in their minds that what money was for)
3. 25 years of military service (& benefits)
4. Wife and I living below our means
5. Choosing career path based on maximizing personal priorities and interests, not simply money (granted, as a science nerd that is an easier decision)
Lots of other cool stuff like buying (and still holding a bunch of) AAPL & MSFT in 1993, but living below our means the most important
2. Same great parents who paid for my college and medical school (in their minds that what money was for)
3. 25 years of military service (& benefits)
4. Wife and I living below our means
5. Choosing career path based on maximizing personal priorities and interests, not simply money (granted, as a science nerd that is an easier decision)
Lots of other cool stuff like buying (and still holding a bunch of) AAPL & MSFT in 1993, but living below our means the most important
"Pretired", working 20 h/wk. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% Int'l LC, 8% emerging, 25% GFund/VBTLX. Military pension ≈60% of expenses. Pension+SS@age 70 ≈100% of expenses.
Re: Best decision(s) in your financial life
The life events/decisions that have most improved my financial well-being are those that led to being in a situation where I can make all financial and investing decisions on my own. To wit:
Divorcing my ex: Reasons for and timing of the divorce had nothing to do with finances. However, my ex was always concerned with appearances and "keeping up with the Joneses". And in the startup/VC space in VHCOL Silicon Valley, many of the Joneses make multiple millions of dollars per year. Together my ex and I made in the mid-six figure range, but there was no way that we could save money and also keep up the types of appearances that mattered to him. Now that we have separate households and finances, I save close to a third of my income. I have a lot less coming in than before, but I feel financially healthier and much less anxious now that I am in control and can make decisions on my own.
Relatedly:
NOT moving in with/marrying my fiance. I adore the man, he is the love of my life and an amazing partner in so many ways. Given our VHCOL area, we could economize by getting hitched and combining households. However, he wouldn't know a budget if one walked up and punched him in the nose. His approach to budgeting is to check his bank balance on his phone every few days. He does not contribute to his workplace 401k to get the employer match. He has no emergency fund, no savings of any kind other than his house (25 years left on a 30 year mortgage). He makes good money (more than me) but is constantly "short." I've tried to (gently) share personal finance resources with him, talk about my own practices, be very clear that a thoughtful financial approach is very important to me, none of it seems to lead to any behavioral change on his part. And I just can't. I cannot give up my hard-won sense of security and financial control. We got engaged because we were tired of referring to each other as "my partner". But we have no plan to actually move in together or get married for at least the next 6-8 years. Maybe never, if our approaches to finance continue to be incompatible. We'll see.
Divorcing my ex: Reasons for and timing of the divorce had nothing to do with finances. However, my ex was always concerned with appearances and "keeping up with the Joneses". And in the startup/VC space in VHCOL Silicon Valley, many of the Joneses make multiple millions of dollars per year. Together my ex and I made in the mid-six figure range, but there was no way that we could save money and also keep up the types of appearances that mattered to him. Now that we have separate households and finances, I save close to a third of my income. I have a lot less coming in than before, but I feel financially healthier and much less anxious now that I am in control and can make decisions on my own.
Relatedly:
NOT moving in with/marrying my fiance. I adore the man, he is the love of my life and an amazing partner in so many ways. Given our VHCOL area, we could economize by getting hitched and combining households. However, he wouldn't know a budget if one walked up and punched him in the nose. His approach to budgeting is to check his bank balance on his phone every few days. He does not contribute to his workplace 401k to get the employer match. He has no emergency fund, no savings of any kind other than his house (25 years left on a 30 year mortgage). He makes good money (more than me) but is constantly "short." I've tried to (gently) share personal finance resources with him, talk about my own practices, be very clear that a thoughtful financial approach is very important to me, none of it seems to lead to any behavioral change on his part. And I just can't. I cannot give up my hard-won sense of security and financial control. We got engaged because we were tired of referring to each other as "my partner". But we have no plan to actually move in together or get married for at least the next 6-8 years. Maybe never, if our approaches to finance continue to be incompatible. We'll see.
Tell me, what is it you plan to do with your one wild and precious life? |
~Mary Oliver
Re: Best decision(s) in your financial life
Not paying off student loan. Now it is holding steady with 0% interest and no monthly due.ArtsyProf wrote: ↑Tue Feb 23, 2021 2:19 pm What do you think is the best decision(s) you have made in your financial life? and why, if you wish to share (Did the decision make your financial life more abundant, easier, more productive, less time consuming etc?)
I"ll start.
1. Investing in 457 plan at work (in addition to 403b which is mandatory) even though I didn't understand what it was at first, started with very small percentage of my salary and conservative balanced allocation . why: better late than never; 457 turned out to have the lowest cost index funds available anywhere and I can pull out money prior to retirement age without penalty if needed
2. Figuring out what a 1031 is and using it to buy a new rental condo when the entire building of my prior smaller/lower price rental condo was sold. why: Instead of being afraid of something new, I decided to embrace the opportunity to upgrade and keep investing, and defer taxes.
3. Investing time into my education even though it meant sacrificing years of earnings. why: Can't put a price of the time and freedom to learn. Life is about more than just material wealth. Feel like I used my time well.
"Know what you own, and know why you own it." — Peter Lynch
Re: Best decision(s) in your financial life
- Stayed with a job that has a classic pension. Based on the 25x multiplier, it will have a value of $3M+ when I retire at age 60, with full medical coverage for myself and spouse.
- Started investing with my first job out of college; steady and consistent has made a big difference.
- Bought a fixer-upper house, and stayed in it for nearly 20 years. We didn't use it as an ATM, so we took the equity and turned it into a substantial downpayment for house #2.
- Started investing with my first job out of college; steady and consistent has made a big difference.
- Bought a fixer-upper house, and stayed in it for nearly 20 years. We didn't use it as an ATM, so we took the equity and turned it into a substantial downpayment for house #2.
Re: Best decision(s) in your financial life
Different decades had good decisions.
After being laid off for six weeks within the first year of buying my first house, I had a two digit amount of money left when I received my next paycheck. I said "never again" and become a diligent saver before age 30. Saved most of each COL pay increase going forward. A couple of years later about 1980, my employer offered something named 401k with index funds, so I maxed my contributions there, then continued the same paycheck deductions into after-tax contributions when the max 401k amount was reached before year's end, for the next 25 years. I also funded IRAs every year for us. We both retired at my age 55.
At work, I transferred from the city to a rural town while keeping my city wages. Sold the mortgaged city house for enough to pay cash for the smaller next home which was slowly remodeled to be larger, so no more house payments.
In retirement, I did Roth conversions every year until starting SS at age 70. For that I am grateful to the Bogleheads, especially Celia, who is very good at explaining tax procedures which are a foreign language to me. Now, my RMDs are only on the slow growth bond index funds which are the sole remaining component of my shrunken tIRA.
After being laid off for six weeks within the first year of buying my first house, I had a two digit amount of money left when I received my next paycheck. I said "never again" and become a diligent saver before age 30. Saved most of each COL pay increase going forward. A couple of years later about 1980, my employer offered something named 401k with index funds, so I maxed my contributions there, then continued the same paycheck deductions into after-tax contributions when the max 401k amount was reached before year's end, for the next 25 years. I also funded IRAs every year for us. We both retired at my age 55.
At work, I transferred from the city to a rural town while keeping my city wages. Sold the mortgaged city house for enough to pay cash for the smaller next home which was slowly remodeled to be larger, so no more house payments.
In retirement, I did Roth conversions every year until starting SS at age 70. For that I am grateful to the Bogleheads, especially Celia, who is very good at explaining tax procedures which are a foreign language to me. Now, my RMDs are only on the slow growth bond index funds which are the sole remaining component of my shrunken tIRA.
Last edited by heyyou on Tue Feb 23, 2021 11:55 pm, edited 1 time in total.
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Re: Best decision(s) in your financial life
I'm 38 and have 4mm. Biggest mistake was paying off debt and not investing early on. That costed me millions. I also should have bought a multifamily and lived in one unit. Best decisions were picking right career that I enjoy and pays well and marrying frugal spouse who is on board.
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Re: Best decision(s) in your financial life
Wow that’s pretty good. Do you know what was her investment strategy? My grandparents died when I was little, but I’d be fascinated to know what your grandma was investing it.Vtsax100 wrote: ↑Tue Feb 23, 2021 3:46 pmAlong those same lines. I remember my grandmother telling me, Its not what you make its what you do with it... I can still hear her saying that.brian91480 wrote: ↑Tue Feb 23, 2021 3:11 pm When I turned 16 years old, I got a job as a bag boy at the grocery store making $5.10 per hour. My mom advised me to take my weekly paychecks and invest them in mutual funds. I had no idea what a mutual fund was.
The best financial decision I ever made:
I LISTENED TO HER
I once found a chart of the market during WW2 and it was fascinating. Battle of midway was the local low and it went up after that.
I also saw the German stock market, didn’t recover till the 60s.
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Re: Best decision(s) in your financial life
Lots of them most of which are not part of any book you’ll find anywhere on investing!
Let’s see:
Working toward and being awarded to be relocated to an office ina different city. Which involved a buyout of my house at the bottom of the real estate crash. Pure luck.
Being relocated back a few years later and buying a house just before the market started coming up.
Taking a series of expat assignments that allowed me to rent that house out and also save a pile of mile (put into general properties)
Dumping actively managed complex UBS discretionary investing to invest in real estate.
Maximizing tax advantaged accounts fully everyday for a decade or more.
Exiting my rental property portfolio and reinvesting only a subset into a reit to better balance exposure and liquidity.
Striving daily to get ahead and do better in my career.
Let’s see:
Working toward and being awarded to be relocated to an office ina different city. Which involved a buyout of my house at the bottom of the real estate crash. Pure luck.
Being relocated back a few years later and buying a house just before the market started coming up.
Taking a series of expat assignments that allowed me to rent that house out and also save a pile of mile (put into general properties)
Dumping actively managed complex UBS discretionary investing to invest in real estate.
Maximizing tax advantaged accounts fully everyday for a decade or more.
Exiting my rental property portfolio and reinvesting only a subset into a reit to better balance exposure and liquidity.
Striving daily to get ahead and do better in my career.
You can do anything you want in life. The rub is that there are consequences.
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Re: Best decision(s) in your financial life
Reading Common Sense on Mutual Funds until I understood it, then acting on what I learned. Stopped chasing returns and at the first chance (thanks to a termination) rolling out of a high cost low option 401 into my own IRA at Vanguard of course.
Re: Best decision(s) in your financial life
Various things like medical ,clothes, child care, food, vacations, education, communications, transportation, athletics, activities etc.OldSport wrote: ↑Tue Feb 23, 2021 8:49 pmWhat all do you find expensive about kids? We are not planning to pay for private school or private university. We did the math at it makes no sense. DW got her degree after having kids, went to a community college, did extremely well, and finished at a Tier 1 University, did great, and has a job at a level most undergrads at private schools get.smitcat wrote: ↑Tue Feb 23, 2021 8:37 pmKids are expensive but well worth it in our case.OldSport wrote: ↑Tue Feb 23, 2021 8:32 pmWhy do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
We probably spend the same on vacation, housing, and vehicles, just maybe have different experience and have larger suburban house vs smaller closer in property and a larger SUV vs a smaller SUV, but don't think we spent any more than we would have.
Many of which are mostly fun for us as well but definately a cost in each occurence.
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Re: Best decision(s) in your financial life
This is a constant discussion on this board; kids cost pretty much what you want them to cost. We did not buy a bigger house or bigger car because we decided to have two kids. We do not go on lavish vacations (and therefore need to pay for flights and hotels for two more). Our kids do not ride horses or go to expensive summer camps (our most expensive reoccurring cost is $75/month each for their jiu jitsu and muy thai training). Clothes cost us maybe $250/yr between the both of them, Christmas and birthday gifts are <$150/yr total each, they can count on one hand the number of times they've been to a restaurant in their 8 and 5yrs on this planet, etc.. Our kids have costed FAR less to raise than most estimates, but certainly they can be very very expensive if you choose to have a specific lifestyle.OldSport wrote: ↑Tue Feb 23, 2021 8:53 pmTrue, but I don't consider that expensive. Our kids are probably gifted 75% of clothing, and food isn't that expensive. We don't take the kids to fancy restaurants.SrGrumpy wrote: ↑Tue Feb 23, 2021 8:44 pmYou still have to buy food and clothes for them. I'm too cheap. Anyway, each to their own. We need kids to pay off today's debts.OldSport wrote: ↑Tue Feb 23, 2021 8:32 pmWhy do people keep saying this? Kids aren't all that expensive, unless you choose to send them to private school and spoil them. Kids were a bit more expensive the first 4 years, but it really hasn't been bad since then. You do not have to buy them a car at 16 and do not have to pay for an expensive college or private school. It really hasn't been that bad. Now if you have a lot of kids, that's a different story. But 1, 2, or even 3 is not THAT expensive.
Airplane flights are the one thing that is a bit more expensive, but I wouldn't call it that bad, as we're not traveling overseas with the kids or flying in a premium cabin.