Most important financial decision in your life

[MBAustin]

Every house purchase was made so that the household could continue to run on only one one paycheck. This was our single best way to implement LBYM.

+1

Also starting to invest early - thanks to my dad, I started investing in mutual funds after about 6 paychecks.

 

[Rdub]

Although I haven't attained all my financial goals yet, the financial successes I've had so far came from a combination of things:

1. Education
2. Hard work
3. Being deliberate with my career choices
4. Taking control of my personal finances early
5. Some luck / good timing

+1

 

[mrfeh]

Article on marketwatch today that echoes comments made here:

10 things rich people do better than you - MarketWatch

 

[Cobra9777]

These are the key decisions that enabled me to retire at 52 with sufficient assets to sustain $100K per year spending:

1. Went back to grad school for an MBA at 26.
2. Worked very hard and rose fast, resulting in steady bonuses and stock option grants over 20+ years.
3. Stuck with my company's DB pension when offered the choice to switch to DC+match in late 90s.
4. Sharply reduced my equity exposure in mid-2008 and increased it in mid-2009.
5. Worked overseas for 3 years late in my career (nice pay increase & pension booster).
6. Maxed out 401Ks, LBYM, avoided debt, invested intelligently, and constantly learned about retirement planning.

 

[retire2020]

1. Eduacation BS+MS
2. Paid off house in three years at age of 37
3. Saved and then bought cars in cash after first car
4. Maxed out 401K/IRA/Roth
5. Educated myself on finances and sorted out asset allocation last year

 

[bob boag]

Joined MegaCorp's voluntary contributory retirement plan in 1981. I don't recall what the contribution was back then, but it was maybe $80/paycheck when I retired in 2011.

I'm now three years into a $2.1M five-year pension payout. My 401K was worth about $600K so upon retirement those two sources provided a $2.7M nestegg. Weeee!

 

[FIREd]

There were no single most important decision for me, just a series of smaller but cumulatively important decisions such as getting a marketable degree, moving to America, marrying someone with similar financial ideals, LBYM from the first paycheck, etc...

 

[dallas27]

5. Educated myself on finances

now that I think about it, that easily is the most valuable action taken.

 

[bobafett]

1. Staying single (a third of my friends are divorced and paying alimony)
2. Not having kids (see above)
3. getting lucky with career after the dot com bust.
4. buying a home in a growth area when everyone said it was crazy.
5. paying off said home early
6. elminating all debt asap
7. socking away a big part of my paycheck (35%+)
8. LBYM like everyone else here.

 

[splitwdw]

• saving/investing
• 401k
• saving/investing

 

[jollystomper]

1. Marrying DW. Financial conflicts are the biggest reasons marriages break up. It was important for me to find someone who had similar financial goals, wanted to save instead of spend, and was willing to sacrifice short term financial pleasures for long-term financial stability.

2. Learning from the financial mistakes and successes of others. Growing up I saw a LOT of folks make bad decisions on education, relationships, illegal activities, etc. Rather than say "that can't happen to me", my fear was "that could be me". That motivated me to not only avoid those mistakes, but to seek out those who were successful - not to envy them, but to learn from them.

 

[freedomatlast]

For me, the key decisions were:

• Getting an engineering degree right after high school
• Getting into management when the opportunity arose (bigger bonuses)
• Trying to be almost totally independent, ie: fixing rather than buying new, learning to repair everything myself such as cars, appliances, all home repairs, furnace, HVAC systems, etc.
• Never buying new when used will do.
• Buying a fixer-upper in a great neighborhood for my first home
• Buying rental property
• Refusal to carry debt on depreciating assets
• Always having an extra beater car that I use for local use
• And of course, LBYM

 

[Dog]

Both DH and I are savers
Both subscibe to LBYM
We don't pay someone do something we can do ourselves
No expensive vices

 

[PERSonalTime]

LBYM was #1!

 

[Lagniappe]

Deciding that I wanted to be FI. I didn't know anyone who had achieved FI growing up, but I decided that this was what I wanted. This led to researching what it would take to get there (LBYM, YMOYL, asset allocation, index funds, bogleheads, finding people who had achieved FI, etc.)

The realization that it was possible and the decision to achieve it changed my outlook on life, my relationship with money, and my subsequent actions.


Sent from my iPad using Early Retirement Forum

 

[RobLJ]

1. Growing up with parents and grandparents from the Great Depression, with savings ethos compensated by spending for goals (including enjoyment).
2. Marrying DW more frugal than myself.
3. Going to and completing grad school.
4. Having 2 children, which focused that salary/assets were not just for myself.
5. Despite being a Humanities major (or because of it), being interested since teens in economics and investments.
6. Reading anything I was interested it, with parents and DW who encouraged that.
7. Taking responsibility for a 403b from the beginning, given my interests in economics.

And getting the hell of our OK/Texas during the 80's oil bust to grad school.
A lot of this was luck or circumstance by the way--what if Galbraith, the Great Depression, and economics bored me? If it was uninteresting, I undoubtedly would not have pursued it. Also my father cosigned a 1k loan to get me to grad school 1/2way across the continent to California, cheerfully. It was a lot of money for him.

Final comment--I'm a little saddened by the mini-theme of no kids, although I don't doubt this was an important factor in most or all who mention it. In my case, having kids increased the impulse to save since the responsibility for them going to college, etc, was on me/us. Otherwise, I probably would have blown it on books and maybe travel.

 

[LoneAspen]

1. Growing up with parents and grandparents from the Great Depression, with savings ethos compensated by spending for goals (including enjoyment).

I always find it interesting when I read something like this, because my parents also grew up during the Great Depression and were very frugal. We always had the basics (housing, food, cars, etc) and didn't want for anything critical to living, but never had anything I'd consider "nice".

The one example I can always think of as a kid was...my parents didn't like to travel, so the yearly family vacation (which they probably wouldn't have even done if not for us kids) was a drive to Opryland in Nashville for a few days. Nothing ever more than that, nor anything different - same old thing year after year. As a kid, I remember hating it because other kids' families always went to Disneyworld, or Yellowstone, or other "cool" places and then we had to hear about it when school resumed and all the kids got up in front of class and talked about where they went over the summer.

My sisters inherited some of my parents' penchant for frugality, but I did not. My parents got even more frugal as they got older, which I was exposed to more because I was born a few years after my sisters. While I did manage to save, I never hesitated to buy something nice for myself once in a while, or go on a vacation to somewhere I really wanted to go (and spared no expense doing it). Drove my Mother crazy.

My sisters and I have often commented about how our parents never treated themselves to anything "nice" while they were alive. They always seemed to be in frugal mode, and never really got to enjoy what they'd saved up all those years, and like the old saying goes, you can't take it with you. Always made me a little sad for them.

 

[BellBarbara]

1. Taking a huge risk to uproot my 10 year old to the East coast to take a new job which elevated my career trajectory.

2. Second marriage to a man who shared the same financial values - LBYM, save, etc. enabling us to retire at 56 and 57.

 

[Mo Money]

Being a bookworm. One day, on my lunch hour, I went to Waldenbooks (presumably now defunct) and stumbled upon the personal finance section. Saw a book titled "Your Wealth Building Years" by Adriane Berg. I bought it. It taught me the time value of money (I was probably 27 or so at the time). Fast forward: I am now 53. But for that book, I would not have gotten the desire to FIRE. The Rule of 72 that Ms. Berg's book taught me has treated me well....

 

[Senator]

Living below my means
Getting out of the USAF after only 4 years to pursue life
Completing college and getting an IT degree
Staying Single
Not having kids
Buying Real Estate in 2008+. Picked up 5-four-plexes, one each year
Discovering this forum and realizing it's possible I can FIRE

 

[mjs111]

For me:

1. Being raised by frugal, smart-money parents who instilled in me early-on the value of saving and compound interest. This got me started saving by the time I was 6 or 7 and investing in my early twenties, both much earlier than I likely would have done if left to discover these things on my own.

2. Staying single with no kids. I have nothing against marriage, and if I meet someone I'm attracted to (who's also attracted to me) who also happens to be good with money I might be up for it, but so far those things have not aligned just yet.


Mike

 

[W2R]

After my divorce, I did a lot of soul searching and spent a great deal of time in introspection. One of my goals was to pin down what I really want.

Deciding to figure out what I really want in life may not sound terribly financial, but the financial implications were tremendous.

 

[mystang52]

Believe it or not, it was my decision to start payroll savings plan of $6.50 per biweekly paycheck back in 1984, to get a $25 paper Savings Bond once a month. DW was stay at home Mom, we had 2 young kids and a small house. Seemingly living paycheck to paycheck. Besides mortgage, we had no debt........and no savings.
I didn't know what we could afford to save, but I knew we wouldn't miss $6.50. That amount grew VERY quickly, as I "discovered" the pay-yourself-first savings approach.
It changed our entire future financial picture.

 

[RobLJ]

I always find it interesting when I read something like this, because my parents also grew up during the Great Depression and were very frugal. We always had the basics (housing, food, cars, etc) and didn't want for anything critical to living, but never had anything I'd consider "nice".


My sisters and I have often commented about how our parents never treated themselves to anything "nice" while they were alive. They always seemed to be in frugal mode, and never really got to enjoy what they'd saved up all those years, and like the old saying goes, you can't take it with you. Always made me a little sad for them.

Oklahoma Grandad and grandma were very frugal (also the Worcester Mass grandparents), but he saved, brought his own land --where his father had taken him at the turn of the 20th century--and built his own rather humble cabin in one of the prettiest areas of Colorado. He retired about 5 years early from the Post Office, then spent half the year in Colorado (paradise) and half the year in Southern Oklahoma (not so much). He was a great fly-fisherman. Now, we own a cabin in Southeastern Colorado, so his influence was immense.
What are you going to do with your money?

(I tried to buy his cabin to keep it in the family but couldn't quite swing two mortagages, in the 90's when we were starting out with two kids in child care. The one we bought is very similar in size and appearance only modernized and winterized.)

 

[jkern]

This may sound like a broken record:

1) Education with an Engineering degree
2) Well paying steady job
3) LBYM, save and invest starting at an early age
4) Became self educated on personal finance and investing
5) End result: retired at 51