What I would tell my younger self: If only I knew what I know now about money…

 

Go ‘Back to the Future’ to pass down finance knowledge!

Kurt Vonnegut:  “Of all the words of mice and men, the saddest are, “It might have been.”

My wife and I are really grateful that we were able to retire early and reach financial independence at the age of 51 and 48.  Don’t get me wrong.  It was a difficult thing to do, to have the willingness to forgo wants, to sacrifice the now for a better tomorrow, and to push through our own doubts about whether or not we were doing the right thing.

In the end, it was definitely well worth it!  Not needing to go to work I didn’t enjoy, has reduced most of the stress from my life.  I wouldn’t change anything right now.  We’re happily retired and doing the things we always wanted to do, namely, traveling and spending more time with family.

It got me thinking though.  What if I had a time machine, like the DeLorean from the movie “Back to the Future?”  What would I tell my younger self?  Would that equal even earlier retirement and reaching financial independence earlier?

In this post, I’d like to share my thoughts on the things I would tell my younger self.  In doing so, I hope this post helps others to focus on what needs to happen to reach financial independence and to retire early.

I think everyone can relate to the general premise of telling your younger self and to impart knowledge you now have, to your younger self.  I always ponder what would’ve happened if I had invested earlier, say age 22, rather than at age 35.  

Everyone probably wonders what would’ve been if they had purchased stocks of big companies like Apple, Microsoft, and Amazon, when they were just starting out.  Wow.  It makes me happy just thinking about it, but it’s followed immediately by regret, at not doing just that…

Living to be 50 years of age has imparted in me knowledge of things I’ve learned through my personal experiences and of my own learning.  Honestly, I still can’t believe I’m 50 years of age.  When I was in my teens, I thought 25 years of age was old.  I couldn’t see myself at 25, let alone 50 years of age at that young age…

I may not have the youth or the energy of a teen anymore, but what I do have now, is knowledge about life, and most importantly, about money.  Some of you may wonder what’s more important.  Is it knowing about life or knowing about money?  

I’m a firm believer in knowing about money, as we’re currently living in a capitalist society in the United States.  If we were an indigenous people living in the Amazon jungle, then the concept of money, would be utterly useless.

In a capitalist society, knowing about money and having money will make your LIFE that much more easy.  To have money means YOU have options if things happen.  If you get laid off from your job, you can plan a new career, or retire, if you so choose.  If your car breaks down, you can replace or repair it.  

I would argue most things we have to deal with as we become adults, are made easy if you have money.  Having money and knowing money means you control TIME.  If you’re financially independent, you can choose to work to make more money, or choose to retire to spend time how you want to spend it.

Money is what most married couples fight about.  Money is omnipresent in our everyday lives.  We need money to put a roof over our heads, we need money to eat, and we need money to get to work so we can get paid. Clothes require money, many entertainment options require money.  Mundane things like the internet, utilities, and personal grooming products also require money.

Although some things like love, enjoying nature, enjoying time spent with family, reading, doesn’t require money, most things do…The bottom line is that it’s better to know about money and have money in the world we’re living in.

With that introduction out of the way, let’s take a look at some of the finance related things I would tell my younger self.

  • Don’t spend every dollar you earned on your unreliable sports car!
In my teens, I owned a used sports car.  It broke down the day I brought it home, then it never stopped breaking down for the next 3 years!  It was the worst car I’ve ever owned or leased in terms of money spent to run that beast, and it was also the best car I’ve ever owned in terms of many awesome memories.

In those tumultuous 3 years, it overheated multiple times, it was in a collision (thanks to my reckless driving), and air conditioning stopped working multiple times.  I must’ve spent several thousands of dollars…

It wasn’t just money spent on fixing the car.  I also spent prodigious amount on sprucing up the car:  Air fresheners, fuzzy dice, car cover, car bra, decorative items, tinted windows, and so on.

I could’ve spent less on that car by trading it sooner for a less problematic car if I only knew how troublesome that beast was going to be…
  • Don’t spend so much on everything else…
Besides the car, I bought so much other stuff!  Let’s start with music media format.  I bought cassette tapes initially, then to records.  CD’s came next.  I had same album in three different media formats!  How stupid was that?!?

Same for movies.  I initially bought VHS tapes, then DVD’s.  It would then be replaced by Blue Rays.  Aarrgghhh!  This all equaled less money in my pocket.

Clothes!  So many clothes!  I tried to keep up with the times.  When Hong Kong’s ‘Heroic Bloodshed’ movie genre came out (A Better Tomorrow, The Killer, Hard Boiled) thanks to John Woo, I had to buy a long coat worn by main characters in those movies.  

When Sony Walkman came out, I had to buy something similar.  Things I bought never stopped…Every dollar I had, went to buying things and eating things…Savings?  What’s that?

After I got married, I shouldn’t have booked that all-inclusive Cancun trip on credit card, but I did.  Eating out was our ritual on weekends to treat ourselves and to alleviate all the stress from our jobs.  

I would tell my younger self to do one of the most important things in life which is…

  • Budget, budget, and budget!
I would’ve told my younger self to learn to budget, to figure out how much is coming in vs going out.  Financial independence is not possible without learning to budget.
  • Use the money spent on our huge wedding reception on a down payment on a condo instead
Looking back, I really wished we could’ve had a small reception just for our family and our closest friends.  We could’ve bought a condo with that money and be at least 4 years ahead of where we are today financially.
  • Don’t be afraid of the stock market
Every adult I knew were all skeptical and scared of the stock market.  Everyone had a story of someone they knew who had lost money in the stock market.  

They all thought the best way to make money was to buy a small business, work your butt off, then sell the store for a profit.  This way of thinking would’ve been fine for my parent’s generation, but not fine for me.

I didn’t want to run a small business with its long hours, crushing isolation, no vacations, and dealing with angrier people.  This was not the kind of life I had envisioned in my teens.  I wanted to make money by working for someone without the headache of running a small business.

I would’ve said to embrace and learn about the stock market to my younger self.  I would’ve said to buy some index funds with low expenses, then keep buying more of it.  Sit back, then watch it grow over decades!
  • Have interest in investing and retiring early 
This is a futile exercise I know, but if I had opened up a Roth IRA in 1998 when it first came out and bought S&P500 index funds, then I would be MUCH better off financially right now!  Oh, that hurts!

I would’ve said to my younger self to have interest in wanting to retire early and to learn about investing.  

  • Don’t cash out your 401k twice!
I would’ve said to my younger self to have an emergency fund so I wouldn’t need to cash out my retirement accounts!  Had I left these two retirement accounts, these two would’ve added up to a decent amount now.  
  • Use company sponsored retirement accounts like the 401k to your advantage
I didn’t understand or wanted to understand 401k when I started working!  Big mistake!  

I would’ve said to my younger self to put away 10% of your paycheck, then start to increase the percentage every year until you’ve maxed out the allowable amount.  

In conclusion:

There are so many things I’ve learned about money and life after living on this earth for the last 50 years or so.  There are so many ‘what ifs’, ‘could’ve beens’, ‘should’ve beens’, and ‘would’ve beens’ to fill the entire post, but it’s too late for me.  I can’t, unfortunately, magically take a time machine to go back and talk to my younger self…

What I hope to see is for our nieces and nephews (and our readers to this blog) to learn from my mistakes and to diligently learn about money.  

Regret is too common for too many people as they reach their retirement age.  Many regret not saving enough money.  Don’t be that person.  Be proactive and seek out knowledge from various sources to learn about investing and wanting to retire early and to be financially independent.  

No one else will do it for you…

I wish you the best of luck in your path to financial independence and to retire early!

Thank you all for reading!


Jake

Wandering Money Pig 


If you missed the post ‘What’s it like to hand in your resignation...’, please click here.

If you missed the post ‘How to retire early...’, please click here.

If you missed the post ‘We sold our home during the pandemic...’, please click here.

If you missed the post ‘What is the FIRE (financial independence retire early) movement...’, please click here.

If you missed the post ‘Magic of compounding interest...’, please click here.

If you missed the post ‘Our minimalist update…’, please click here.

If you missed the post ‘Dangers of entitlement on your path to happiness…’, please click here.

If you missed the post ‘Get rid of debt to reach your goal of financial independence…’, please click here.

If you missed the post ‘Thinking of moving to Pennsylvania…’, please click here.

If you missed the post ‘Learn to say enough to be happy on your path to financial independence and to retire early…’, please click here.

If you missed the post ‘Why is downsizing/minimalism so difficult…’, please click here.

If you missed the post ‘Is America still a land of opportunity…’, please click here.

If you missed the post ‘Learn a skill that pays you well to retire early…’, please click here.

If you missed the post ‘Invest and not save for retirement…’, please click here.

If you missed the post ‘Learn to enjoy the moment for life and for FIRE…’, please click here.

If you missed the post ‘The correlation between consumerism and early retirement…’, please click here.

If you missed the post ‘Retire on $200,000 (200k)…’, please click here.

If you missed the post ‘Adapting to change for life and for FIRE…’, please click here.

If you missed the post ‘Thinking of moving to Hawaii…’, please click here.

If you missed the post ‘Tough childhood leads to success in later life…’, please click here.

If you missed the post ‘Thinking of moving to New York City…’, please click here.

If you missed the post ‘Importance of finding purpose in early retirement…’, please click here.

If you missed the post ‘What is the rule of 72…’, please click here.

If you missed the post ‘Retire on $100,000 (100k)…’, please click here.

If you missed the post ‘The importance of a significant other’s role in your path to FIRE…’, please click here.

If you missed the post ‘Save for retirement or pay off debt…’, please click here.

If you missed the post ‘How much do I need to retire…’, please click here.

If you missed the post ‘Early Retirement Manifesto…’, please click here.

If you missed the post ‘Pros and cons of early retirement…’, please click here.

If you missed the post ‘How to save money when traveling…’, please click here.

If you missed the post ‘What is the average 401k balance…’, please click here.

If you missed the post ‘Doing a garage sale during the pandemic…’, please click here.

If you missed the post ‘First few months after early retirement…’, please click here.

If you missed the post ‘Not caring too much equals happiness…’, please click here.

Please check out our YouTube channel ‘Wandering Money Pig’ showcasing our travels and our Pomeranian dog! https://www.youtube.com/channel/UC3kl9f4W9sfNG5h1l-x6nH


Popular posts from this blog

AirBNB horror story: How we got a refund from AirBNB due to a noisy neighbor…

Review of Vdara Hotel, Las Vegas, NV (Nevada): Pros and Cons

Review of Falls Lake Dam Recreation Area, Wake Forest, North Carolina