Advice you'd give your 25 year old self

[sunsnow]

1. Everything is going to work out even better than you think, so relax and enjoy the ride.
2. Don't put off learning and exploring. You're going to spend a lot of your life not w*rking, so you need something to live for beyond w*rk.
3. Don't let other people know how well you're doing financially. Envy and competitiveness will ruin otherwise good relationships.
4. Stay fit. Eat right. No excuses.
5. Don't try to beat the market by trading frequently. Buy and hold.
6. You can accomplish just about anything you set your mind to, so choose your challenges wisely. Don't short-sell your abilities by aiming too low, or over-extend yourself by choosing something so difficult there's no time or energy for anything else.
7. Take more vacations. And sometimes, visit places outside of your comfort zone.

 

[Lisa99]

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...

Wow, I didn't pick up on the fact that the OP is 25...that puts a whole different light on the question...and good for him!

 

[EvrClrx311]

The car thing is a great point... even after reading the Millionaire Next Door and deciding that I was never going to buy new, DW and I managed to convince ourselves that because we are keeping it for 12+ years we might as well get something nice that we really like. Saving 15-25% buying used wasn't too appealing since there is always the risk of a lemon, and we would lose extra years off the end since we plan to keep this a VERY long time.

Two months ago my Integra died at 238,000 miles so I took over our 5 year old Accord and we went out and bought a 2012 Odyssey. I did my homework and we ended up driving out of state to get a really good deal (below Invoice... or $2,500 less than the lowest we could haggle for local at 5 dealerships)

although... I'm questioning now if we really should have gotten the Touring Elite model ($15,000 more than cheapest trim). I certainly got caught up in the whole "well we're going to have this for a long time and for MANY family trips"... which is true. Leather, Duel TV screens for kids, sound, navigation, bluetooth everything, oh and +1 MPG from being 6 speed - that's gotta be worth a few thousand $ in savings over 150,000 miles . Though spending $40,000 on a minivan is a bit insane, even if we get 12-15 years out of it.

I guess we're doing ok though... most of our neighbors are driving a brand new car every 2 years on a lease. That can sting a lot more than $40,000 every decade or so. I like the Accord, and its only at 80,000 miles... at my current mileage rate, it'll take me 15 more years to get it near that 250,000 mile mark I was so close to (guess we'll see if I make it this time ).

Short term is seems like a bad choice... but looking ahead a decade or so, I'm sure we'll be happy that we got a few of the bells and whistles.

 

[Midpack]

Kudos on your cars, I think you're on the money! Long term you come out way ahead.

And IMO there's nothing wrong with getting something decent when you do buy every 10 years or so. We'd never buy a Lexus, but that doesn't mean we buy a stripped Toyota Yaris either. My wife drives a loaded Camry Hybrid with every option we'd ever want, but we'll keep it 10 years or so like you. I'm driving a 9 yo Honda with 125K miles, when it starts to act up considerably, I'll get rid of it.

Like you, we're so far ahead of the 'lease a new BMW every 2 years crowd,' it's [-]comical[/-] no contest. To each his/her own...

 

[bentley]

As I pose this question to myself, a number of responses come to mind. I have two kids (both just over 25), and I have given both of them this advice.

When you buy your first home, do not, under any circumstances finance it longer than 15 years. The same advice applies to 2nd, 3rd, 4th,.....home as well.

The freedom that comes with a home that you own free and clear is worth a lot.

See all above advice about 401k's, Roth's, etc....

B

 

[obgyn65]

Well said. I was still studying at the age of 25. I would add : pay attention to your health, keep a good BMI, avoid drugs and promiscuous sex. Give more of your time to help others.

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.

 

[brewer12345]

Don't wait until you are pushing 40 to do much other than work, commute, study and chase kids.

 

[scrabbler1]

Age 25 for me back in 1988 was a fun time. But I would have done a few things differently, some of which would have have a significant effect on me, had I known then what I know now.

(1) I would have stayed in my current rental apartment for another year. The real estate market dropped a lot from 1989 to 1990, so another year of savings along with lower RE prices would have enabled me to buy a better apartment than the one I live in now (not that it is a lousy place) at the same price. Also, interest rates had dropped a lot so my ability to save more would not have been hampered. And I would have opted for a shorter ARM than the 5-year ARM I got (even if I bought my current place in 1989), enabling me to take advantage of dropping interest rates instead of having to go the trouble of refinancing the loan in 1992.

(2) I would have visited the dentist more often, saving me some grief in that area both then and years later.

(3) and......I would have put more moves on that woman I briefly dated LOL!

 

[jclarksnakes]

1. Read "The Millionaire Next Door".
2. Never stop getting an education. Go to school every year of your life (you can take a break when you reach FI if you want). Learn to do your job better and also learn some totally unrelated field. The field you are now working in and making good money may not even exist 10 years from now. If your field/job does still exist there is a very good chance that someone will figure a way to do your job cheaper. Like moving it overseas maybe.
3. Never hire a yardman or a tax preparer. Those things you can and should do for yourself. Only hire a plumber for very big problems. Leaky or stopped drains or leaky faucets you should fix yourself. Do at least some of your own auto maintenance.
4. Take care of your health including your teeth.
5. Marry the right person.

 

[Midpack]

5. Marry the right person.

His DW might have a say...

 

[Chuckanut]

Worry less, play more.
Don't waste your life living somebody else's. (With thanks to Steve Jobs)
Don't waste time on regrets.
The best time to plant a tree was 30 years ago. The next best time is today.
Children are worth it!

And listen to this song at least once a week:

 

[Danmar]

Everything's gonna be OK. Stop stressing about it!

Exactly. Everything did in fact work out just great.

 

[Danmar]

Kudos on your cars, I think you're on the money! Long term you come out way ahead.

And IMO there's nothing wrong with getting something decent when you do buy every 10 years or so. We'd never buy a Lexus, but that doesn't mean we buy a stripped Toyota Yaris either. My wife drives a loaded Camry Hybrid with every option we'd ever want, but we'll keep it 10 years or so like you. I'm driving a 9 yo Honda with 125K miles, when it starts to act up considerably, I'll get rid of it.

Like you, we're so far ahead of the 'lease a new BMW every 2 years crowd,' it's [-]comical[/-] no contest. To each his/her own...

Sure but if you can afford it BMW's are great cars.

 

[unclemick]

1994. I gave my nephew (newly married, military academy grad) Bogle on Mutual Funds.

When prompted I did my best imitation of Dustin Hoffman - 'Psssst Index Funds.'

The rest as they say is history. He done good - both in the marriage and index funds and is still career military.

heh heh heh - betcha some here thought it was 'pssst Wellesley' . Nope .

 

[Midpack]

Sure but if you can afford it BMW's are great cars.

Lots of folks here can afford a BMW, most choose not to...

 

[Danmar]

Lots of folks here can afford a BMW, most choose not to though...

i know, but to each their own. I really enjoy mine especially the M's.

 

[Dreamer]

I agree with so many of the above. I would add that I think one of the biggest regrets of my life, was smoking. Not only did my money go up in smoke, but I could have died from it. I am glad that I gave it up in 1985.

I also would not have stressed about money so much in our early lives. I made too big of a deal about some things. Enjoy your life as you go along. I definitely agree that experiences are way better than things.

 

[Mill]

Good thread, and I want to add my advice.

I am 30 now, but as I look back there are a few things I would have told my 25 year-old self. I didnt listen to much advice then, so I would be pretty harsh and to the point...

1. Quit smoking before you become additcted to it! Its a huge waste of money, Girls hate it, and people judge you for it. But most importantly its terrible for your health, and having experienced trying to quit once, its going to take a massive effort to quit in the future. Also, its probably going to bankrupt you in retirement, and lead to a painful death!

2. Go to the dentist. Your teeth are rotting out of your stupid head even though they dont hurt right now. And your dental insurance is only going to cover a fraction of the work you need in 2012-13-14-15 and so on, so fix it now!

3. How did investing in those penny stocks work out for you? What? you lost everything? How about investing in an index fund right now, and never investing in penny stocks again?!

4. Please dont play loan shark. You are going to lose. Also, please stop gambling. You are going to lose, and it will make sports no fun to watch if you dont have money on the outcome.

5. Maximize time with family and friends. Soon you will move away, and your friends will drift apart, and you will only see family a few times a year.

6. Enjoy everything right now. You may have more money/comforts in the future, but you can never go back in time.

 

[Danmar]

it's different giving self advice because you already know the outcome. Giving advice to someone else without the advantage of hindsight becomes a lot more difficult. Probably why it is usually more generic and less useful.

 

[njhowie]

it's different giving self advice because you already know the outcome. Giving advice to someone else without the advantage of hindsight becomes a lot more difficult. Probably why it is usually more generic and less useful.

I disagree. To me that's the whole reason for this thread, to give those without the hindsight the benefit of your hindsight. I think this is invaluable because most people here are financially consciencious and you have many, many years and ranges of experience here - again invaluable. What's your alternative - either take a limited/narrow poll of all your older friends and relatives or tell 25 year old to go pick up a book that does give generic advice? What you're getting here is the best pieces of real life advice out of everyones experiences. The objective is to let those younger folks who do happen to pass through that wisdom, or for others to pick up on it and give to our younger ones.

My own advice to younger self - don't be in such a rush to buy/own the first house/condo/townhouse, even if it appears to be cost effective. Younger self was 20 years before this latest bubble, and the advice would/should have been the same...because people were acting the same.

 

[Danmar]

howie. yes I got the point of the thread. My point was that regular advice(ie when you don't know the outcome) is more generic and less useful -and that the post facto advice in this thread is really much better if perhaps easier to give. Sorry for the confusion I should have been clearer.

 

[Bestwifeever]

I think I'd tell my 25-year-old self that she didn't do too badly and that God looks out for fools.

What I really wish is that my future 86-year-old self would tell me some things! Maybe she'd say the same thing.

I am sure she would tell me that, if I really wanted a BMW, to go ahead and get it and forego something else if need be.

 

[superdave]

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.

Hay Trombone... I was forced to take piano lessons as a child. As soon as I could escape the torture, I quit.

Fast forward maybe 30 years and I took up guitar on my own terms. Probably would have picked it up earlier if I hadn't been forced into Piano.

 

[njhowie]

My point was that regular advice(ie when you don't know the outcome) is more generic and less useful -and that the post facto advice in this thread is really much better if perhaps easier to give. Sorry for the confusion I should have been clearer.

Agreed 100%

 

[Helen]

I sold the 68 Camaro and a year later sold the 69 Camaro.

My first car was a '69 Camaro (in '78). I Loved that car. It was a bit light ended though and I had some heart thumping moments driving it in the Michigan winters.

For my 25 year old self, I would say to start saving with the first paycheck, even a few bucks. And, stay away from penny stocks. But alas, I did well but it was mostly due to good fortune.