Best Financial Advice I Received and Followed

[WhoDaresWins]

My parents were both very debt-averse and were assiduous savers. Education was a priority for both my sister and I (both were college educated first generation Americans at a time when this was unusual...the 1920's and 1930's). I did not really start to think seriously about investing and expenses until after my husband died suddenly. Fortunately I had a few significant underpinnings to see me through to retirement at age 60: large nest egg left by husband, small invested inheritance from father, a good government job with a pension and guidance from a financially savvy aunt who also left me a chunk of money in 2011.

 

[eytonxav]

But that is only half of the formula. The rest is "Collect early, pay late." (or put another way -- "A dollar today is worth more than a dollar tomorrow.")

Therefore the best financial advice I ever received was indeed; "Buy low, sell high, collect early, pay late."

If you take the pay late statement literally better be careful or your credit could get dinged, and that would not be good. Also, may not work very well in a deflationary environment.

 

[Meadbh]

"Save for a rainy day, and never buy anything on hire purchase"

Mom, 1960-ish

Hire purchase = financing

 

[RonBoyd]

If you take the pay late statement literally better be careful or your credit could get dinged, and that would not be good. Also, may not work very well in a deflationary environment.

Why does everyone jump to the conclusion that "Pay late" means "Past Due"? "Collect early" means you want to be paid as soon as the amount is owed -- don't extend credit (except with enough interest to protect against default, of course). "Pay late" means you want to pay the amount at the last possible moment (without penalty is assumed).

Don't pay next month's bills this month is all it means.

Additional thought: "Buy low" doesn't mean "Insider trading." Nor does "Sell high" require (or even suggest) fraud.

 

[Beldar]

"Pay yourself first" and "You'll never get your financial life in order if you don't have your tax life in order", or words to that effect.

From none other than CJG himself, in the late 80s. As much as that man was maligned, he did make me pay close attention to my taxes, and thus to my finances. Which forced me to not only educate myself about investments but to DO something about them. That single step led me to FI and hopefully to ER in the next year or two.

 

[Midpack]

The most important advice we ever got wasn't strictly financial. We always lived within our means, and it wasn't the mechanics of reaching FI that really did it for us, we've known that from the start.

Only when we fully grasped 'the most important things in life aren't things' did our progress toward FI really accelerate. When we were younger we aspired to nicer things, but fortunately we resisted mostly. Now we're amazed at how little we need (material possessions) to be happy. Sure we give in to little splurges from time to time, but living well below our means is the greatest reward.

 

[eytonxav]

Why does everyone jump to the conclusion that "Pay late" means "Past Due"? "Collect early" means you want to be paid as soon as the amount is owed -- don't extend credit (except with enough interest to protect against default, of course). "Pay late" means you want to pay the amount at the last possible moment (without penalty is assumed).

Don't pay next month's bills this month is all it means.

Additional thought: "Buy low" doesn't mean "Insider trading." Nor does "Sell high" require (or even suggest) fraud.

No worries, I just said to be careful with that, especially if you rely on USPS for paying your bills.

 

[RonBoyd]

No worries, I just said to be careful with that, especially if you rely on USPS for paying your bills.

People still rely on the USPS... for anything?

 

[Car-Guy]

People still rely on the USPS... for anything?

NetFlix's DVD's

 

[MooreBonds]

My grandfather only stayed in school until 8th grade (he was born in 1918), then worked his butt off his entire life. However, he understood the effect of compound interest, and always talked about the great attributes of the EE savings bonds he purchased, which give you "interest on top of interest".

The concept of compound interest seemed obvious to me (and him), but apparently it's something that eludes most people...

 

[MichaelB]

People still rely on the USPS... for anything?

<raise hand> We send and receive lots of mail.

 

[RonBoyd]

NetFlix's DVD's

DVDs? They still make those?

 

[38Chevy454]

Pay yourself first, which was accomplished by participating in the company 401k/403b plans; save the amount to at least max out the matching contribution, and then maxing out to tax limits once able to. Also LBYM, don't carry bad debt. House mortgage is OK debt, a car payment if you need to.

Invest in stock market and let it ride over time. Don't panic and sell when a correction or drop occurs. The whole point is buy low and sell high, which has always happened over a longer time horizon.

 

[RonBoyd]

... receive lots of mail.

I don't doubt that at all.

I have stopped all mail that I could (it is impossible to stop government stuff -- license plate notification, real estate tax, IRS stuff, etc.). All Statements come to me electronically -- utilities, financial, etc. We travel a lot and USPS is not set up for that -- yes. there is "Hold Mail" but that 30 day expiration thing is a real pain.

Anyway, we were gone for 28 days a couple months ago. When I picked up our mail it consisted of 54 pieces. Only five of those 54 were of semi-importance. You can guess what the rest was. (This was, BTW, prior to the onslaught of political stuff of the past several months.)

Furthermore, I have instructed Amazon, for instance, to never use USPS for my shipments and UPS and FedEx have been instructed to not "hand-off" any packages. Yes, I pay a couple bucks more but I get a Tracking Number and delivery within a week.

 

[RonBoyd]

USPS for paying your bills.

Using USPS would violate the "Pay late" mandate. Electronic transfer would be "later." (Not to mention more certain of arriving on-time.)

 

[eytonxav]

Using USPS would violate the "Pay late" mandate. Electronic transfer would be "later." (Not to mention more certain of arriving on-time.)

Ron,

I'm not sure what you are talking about, but nevertheless, you may end up needing to argue with a credit agency if your payment is received late even if caused by USPS.

 

[RonBoyd]

Ron,

I'm not sure what you are talking about, but nevertheless, you may end up needing to argue with a credit agency if your payment is received late even if caused by USPS.

Of course you would. That is what I said -- certainty of "on-time" delivery.

 

[Chuckanut]

DVDs? They still make those?

Some of the best stuff on Netflix is still only on DVD's.

And to keep this on topic:

Here's some good, money saving, financial advice: Cancel cable TV. When a favorite show's season ends wait for that season to either go to Netflix streaming or be available on DVD's for an extra $8 a month. Far cheaper than most cable TV rates.

I just finished the first few seasons of Game of Thrones using this system. While I wait for the current season to be on DVD, I will watch a few other shows and movies that are out on DVD and/or being streamed. The cable guy? I kicked him to the curb years ago.

The bigger picture financial advice: A dollar saved is like a dollar earned - TAX FREE!

 

[RonBoyd]

When a favorite show's season ends wait for that season to either go to Netflix streaming or be available on DVD's for an extra $8 a month. Far cheaper than most cable TV rates.

Or Roku (Via Amazon Prime, for instance).

 

[sailor]

I have stopped all mail that I could (it is impossible to stop government stuff -- license plate notification, real estate tax, IRS stuff, etc.).

It is changing. At least where I live, you can get a lot of government stuff electronically - including license plates notifications (but not the stickers) and real estate tax.
Car insurance used to be physical mail, but nowadays police here have your insurance record available electronically and your smartphone app can also double as proof of insurance.

 

[Car-Guy]

So far it seems like contributing to a 401k is going to be a common theme here for many of us. Not unexpected.

 

[Walt34]

People still rely on the USPS... for anything?

Yup. A bill comes in, I sit down and write a check, put a stamp on the envelope, it goes out the next day. Works for me.

 

[RonBoyd]

Yup. A bill comes in, I sit down and write a check, put a stamp on the envelope, it goes out the next day. Works for me.

What's a Check?

 

[Walt34]

What's a Check?

A paper document used to transfer money. They used to be widely used but now only cantankerous people use them.

 

[WhoDaresWins]

I am also one of those dinosaurs who still writes checks and puts a postage stamp on envelopes. A couple of things are billed to a credit card and my health insurance is auto deducted from my pension but otherwise I get a bill by snail mail, write a check and post it within a day or two.

My only complaint is the paucity of mailboxes in suburbia (they have become like pay phones). When I worked, my office was near a large central post office and I walked into the lobby several times a week to deposit mail. I don't like to leave my outgoing mail in my mailbox as I have on occasion gotten other peoples' outgoing mail mysteriously mixed in with my incoming mail.