Advice you'd give your 25 year old self

[Ronnieboy]

While it would be nice to say, "buy $10k of whatever stock and hold till you reach multiple millions" it wouldn't have been realistic for me to do that at 25 y.o.

What I would tell myself is:
-LBYM all the time, no matter how hard it may seem, don't buy the new car, electronic gadget, dishwasher, lawnmower, etc. when the old one is working just fine.
-Save the first 10-15% period. Max out retirement funds, don't liquidate when you get laid off. (I hate to think what my measly 401K from 1989 might be worth today if I had rolled it over (and put more into it) instead of cashing it out). Not to mention the times that I would take some time off of not putting money into it because I wanted the money now! Retirement is so far away.
-read the books that have been previously mentioned.

 

[MichaelB]

My one piece of advice to my younger self (or my children) would be - Don't forget to keep balance in life.

 

[clifp]

More sex. More drugs. More rock & roll.

More sex definitely
More drugs Nah the amount I did was just fine
More Rock & Roll yes
Less junk food.

 

[KiraC]

Great question! I've been looking back on all the money I spent on stuff over the years and now wondering if it was worth it, especially the expensive car. I wish now that I would have questioned then whether I really needed something versus just wanted it. I could have save so much more money that could be put to better use now.

good luck!

 

[rescueme]

Let's see. Age 25? That would be 1973, for me.

Married for four years, with a three year old son.

I was the only one wor*ing, and at a slightly over minimum wage j*b; DW stayed home to take care of our (disabled) child.

Did not earn much, did not spend much. As far as saving/investing for retirement? At the time, my company had a defined benefit (e.g. pension) plan, and this was before 401(k)/IRA's. No need to look decades ahead and make personal plan/decisions in this area. BTW, I left the company after being there just under eight years. At the time, pension vesting was set at 10 years, so I received nothing for the time "invested".

There were little options for myself, and my family. We just held on while the wolf was at the door. There's nothing I would have changed, since there were really no options to do so.

Now, some four decades later, I could have not forseen (as a 25 year old) how things turned out - much, much better than expected. I guess I/we made the correct decisions, later in life...

 

[JSadler]

"Stop stressing! The student loans WILL be paid off!"

 

[Sarah in SC]

At 25?
Yeah, enjoy every moment you get to spend with your friends, all of them won't make it with you into the next decade.
Spend money on experiences, not things.
Cut people some slack, as not everyone is as driven, motivated, intense, as you.
More live music--you'll get to an age where you can't stay awake as late!

 

[Ed_The_Gypsy]

Avoid debt like the plague.

Save 15% of your earnings and all of your raises. If you can. If you are paying off student loans, pay them off first, then put those payments into savings.

Use a Roth.

Do not spend windfalls. Do not 'treat yourself' if you get one. If nothing else, stick them in an S&P 500 index fund and do not touch them. I have had two windfalls in my life and did not manage them well. Do not make my mistakes.

Don't buy a big house or a fancy car. Buy only what you need. Think minimalist.

Find ways to entertain yourself without spending money. Play an instrument. Paint. Go hiking.

 

[panhead]

some thought

I’ll chime in here…
The absolute most important thing is your health, it’s been said over and over but pay attention, because at 25 we are usually in great shape. Once the reality of a full time job with expense account lunches and dinners, high stress, etc. really kicks in, your health will decline unless you pay very close attention to it. It happens when you’re not looking too, so be vigilant!
Saving and spending, you wouldn’t be asking questions on this board if you didn’t know something about this, but I’ll say this, purchase what you want, if it truly brings you happiness. It’s the image purchases that kill you, but don’t avoid expensive things (within reason) b/c they are too expensive. If it means that much to you and you are ok with the effect it will have on your FI goal, buy it. Just be very clear on the opportunity cost of your decision.
Learn how to fix all kinds of things. This will save you a lot of money early on in your career where you have more energy and time and less money. This includes appliances, cars, plumbing, etc etc. Later in your career, in your 40s or so, you will likely not have the time or energy to do much of this yourself, but by this time, you should be at or close to FI.
IF you purchase a house, make it a very reasonable purchase. My first one was an extreme fixer upper. I was young then and didn't mind coming back from work to work on it. It was cheap to begin with and paid off in 3 years.
If you get married, choose wisely. This could possibly be the biggest breaker of RE that there is...picking wrong and/or divorce.
Nurture your releationships with the people who are most important in your life. Spend time with your parents if they are alive, as they won’t be forever. Eliminate toxic relationships from your life as quickly and with as little drama as possible. This is a tough one, but trust me, you will be happy you did later.
Make sure you have a little fun every day, whatever that means to you.
It’s funny, I had the idea of early retirement when I was about this age, maybe even younger. I understood investments, time value of money, opportunity costs, and all of that. What I didn’t take into consideration is the physical and even emotional changes that take place when you age. My original budget for ER was about 500k in my early twenties, in my early thirties, I wanted more comfort than that, so the budget increased. In my forties, same thing happened again.
OK probably too long but it’s kind of an interesting question….
-Pan

 

[farmerEd]

To be honest, as far as accumulating wealth I have done things pretty much right, so no new advice there for me; but if I could go back in time I wouldn't have gotten so serious about it so early in my life (I made my first ER spreadsheet at 22) which led me to give up so many things (backpacking across europe, living in various parts of the country before settling into one place, living overseas working for an international company etc), those are some of the biggest regrets I have - and now at 47, with 4 kids, +pets school schedules etc, even though I am ER'ed, with 9 more years to go before the last one leaves for college, most of those things will never happen at least not in the same way they would have had they been done when I was 30 years younger than I will be the next time I have that opportunity.

So in other words, don't put off your entire 'bucket list' for 'someday'. 'Someday' may never come.

 

[Ed_The_Gypsy]

Excellent points from Sarah, panhead and farmerEd. Life is more than money. The great thing is that you can put the money part on autopilot. Wind it up and let it go, then focus on the important stuff.

 

[DFA]

To myslef:

1. Buy WalMart
2. Buy Apple
3. Buy Microsoft
4. Buy Gold and Silver
5. Here are the PowerBall, lotto, and Mega Million number for the next 29 years when the big jackpots come up.

 

[Andre1969]

1) Stay at home another year, save up a bigger down payment for a house.
2) DON'T marry that woman!!
3) Start 401k earlier (I didn't start one until I was almost 28)

But, as it turns out, none of those points were permanent setbacks. And who knows? They may have been blessings in disguise. For instance, if I stayed home another year, it's not a given that I would have managed to save up any more money. Who knows; I might have blown through it rather than save it. Plus, it would have delayed me getting out into the "real world" a bit longer.

And, if I hadn't gotten married and burned, I might never have gotten the drive to work my butt off, pay the debt down, save up a good nest egg so that I'm never in that kind of financial situation again, etc. I often wonder too...even though my marriage was a disaster, would I have regretted it if I hadn't gotten married? Would I still be wondering what kind of life I could have had (not knowing how it would turn out in real life).

As for not starting my 401k earlier, well, can't cry over spilt milk, I guess! Back then I worked for McDonnell-Douglas. Most likely I would have invested in their stock fund. When I first started there in '92 it was around $20/share. It did a 3:1 split, then a 2:1 split. When we got bought out by Boeing in 1997, it did a 1.3:1 split and came out to around $56/share. It was December 1997 that I started my first 401k. I wouldn't have been able to put away very much in those days, but even $20 per week would have been a nice start.

 

[TromboneAl]

I often play this game, but it usually has rules. Like: you are limited to three words.

The advantage of going back in time, is that your younger self is likely to listen to you. Giving advice to your son or daughter isn't the same, because they may decide that your advice isn't good.

But if I only had three words, I'd say: "Eat fewer carbohydrates." That would have allowed me to eat more enjoyable foods, and spend less effort trying to keep my weight down.

If I had another three words, I'd say "Retire very early." Concerning the balance between spending and saving, for me, the freedom of retirement outweighs the privations of LBYM. And, being free at 40, when you have so much more energy, is much better than being free at 55.

Another three words: "Vanguard Target Funds" though they didn't have those back then. My investing would have done just as well as it has (or better?) and I wouldn't have needed to spend as much time on it.

 

[TromboneAl]

But what I'd really like to do is talk to my parents back when I was five, and tell them to make me take piano lessons. Then I could avoid my current hellish struggle to get better at sight-reading.

 

[Live And Learn]

1. Learn about asset allocation
2. Learn the basics of investing but dont try and be a broker !
3. Keep saving and living below your means even when you think you're on track to ER
4. Spend time with friends and family. Take vacations together - a simple weekend away is well worth the spend !

 

[EvrClrx311]

Lots of great advice... thanks everyone!

 

[nun]

Don't date Mount Holyoke women, concentrate on the Wellesley women.

 

[Big Game James]

• Save all you can, that you've already figured out. Many don't even grasp this...
• Read The Millionaire Next Door and The Four Pillars of Investing, and take them both to heart.
• Understand that you'll be different than your peers and mainstream western culture, especially the USA. You'll have the last and best laugh.
• Make your goal FI, ER is a separate decision you can consider later.
• Enjoy your life every day in the meantime. Relationships and experiences are much more valuable than "things."
• Best of luck.

YES!!!!! THIS!!!!!! Right on Midpack!!
FI/ER
The only thing I'd ad is to educate yourself and don't be afraid to make you own moves.

Learn why things are done the way they are, the motives behind them and how you can use that to leverage yourself.

People work hard and either forget, get lazy, or get scared about truly doing the most to leverage forward what they just worked so hard for.

Every single day your money is out in the market tangible or intangible, you're losing money one way or another (outright losing or getting left behind) so don't ever let that keep you caged. Let the fear of others be your tool as to why you make the moves you make because the real money is making moves around the herd, not inside of it. The minute you get over that, is the minute you've opened the door to FI.

When moving your money around or making money find as many ways as possible to release the handcuffs!!! - everyone has their own definition, find yours and grow it.

Find a mentor.. It takes a little asking around and little work but please don't let excuses write your future. =) That one alone was my problem (and still is in some cases) for a while if I can be completely honest. You'll find that people that have been there and done that (especially if they've come from a humble background) are happy to share their experiences because they don't want anyone else to live out the rough side of what they did to get there.. Not only that you'll find that for some people they look at it as a way to "pass on their legacy" so to speak... Finding quality is the fun part.

Probably the biggest for me personally is that depending on how you chose to set up your future - setting yourself up with fixed payments for an uncertain future can be disastrous and has been for many. For those that are doing well... AMEN!! =) If you can set something up where money keeps coming then you're a lot better off then having something fixed and whether it's an intangible or tangible source/asset that's true diversification.

 

[Lisa99]

I agree with a lot written here, but at 25 I knew everything so wouldn't have listened anyway.

And if I had the ability to change anything I did, I don't think I would.

If I did go back in time for a do-over I might not be where I am today with a loving husband (2nd marriage going on 22 years), most of the way to FIRE and an ability to know how to live for the now and to save for the future (former spendthrifts can be reformed but I will not sacrifice enjoying life today for the hope of enjoying it at some future point).

 

[hankster]

Note to my 18 year old self: Don't sell the '68 Camaro

Lots of great advice from the other posters. I would emphasize the avoidance of debt to buy depreciating items. Paying interest on something going down in value was a terrible mistake I made in the early years.

 

[Midpack]

I agree with a lot written here, but at 25 I knew everything so wouldn't have listened anyway.

Me too, but this OP is asking so he's a lot smarter than I was/am. I wouldn't have even asked when I was 25...

 

[tkopel]

Don't buy that @!#$%^! truck that was waaay to expensive for a college student to own! Take out as few student loans as possible. Be patient, things will all be OK.

 

[jclarksnakes]

Note to my 18 year old self: Don't sell the '68 Camaro

Lots of great advice from the other posters. I would emphasize the avoidance of debt to buy depreciating items. Paying interest on something going down in value was a terrible mistake I made in the early years.

Let's see? I sold the 68 Camaro and a year later sold the 69 Camaro. The MUCH larger mistake was not buying that new 1970 Ferrari Daytona I was actually lusting after.

 

[clifp]

Note to my 18 year old self: Don't sell the '68 Camaro

Ditto on the 57 Chevy for me. Darn car bought it for $500 sold it for $1500 and spoiled me for life thinking cars went up in value.