What has been your most important skill in achieving financial independence?

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Sandtrap
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Re: What has been your most important skill in achieving financial independence?

Post by Sandtrap » Sun Feb 18, 2018 10:03 am

GerryL wrote:
Sun Feb 18, 2018 2:31 am
I'm sure all/most of the obvious skills and characteristics have been covered by this point in the thread, so I'm going to add one that may not seem so obvious. In fact, it may even be seen as a character flaw: I am a ditherer. A world-class ditherer.

While some people might have problems with impulse spending, I tend to dither when it comes to making a large purchase. Or even a not-so-large purchase. And after much dithering I often decide not to make the purchase. I dithered for years about finding a "financial advisor" and instead kept reading up on personal finance until I realized that I could manage my own money. That probably had the biggest (positive) impact on my net worth. When I used to read about "interesting" mutual funds that I could add to my portfolio, I investigated and then I dithered until I eventually decided to leave well enough alone. My dithering, I believe, kept me from making useless or self-defeating moves when it came to managing my finances. And I am now, as I like to say, gainfully unemployed (i.e., retired).
"world-class dithering" = mature, thoughtful, deliberate, methodical, patience.

j :D

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Re: What has been your most important skill in achieving financial independence?

Post by gd » Sun Feb 18, 2018 10:04 am

Easy, definitive answer in my case. Not following my professional coworkers and upgrading my lifestyle significantly from when I was a minimalist student. Not sure this is so meaningful any more; the few college students I've followed in subsequent generations didn't live like I did. Not passing judgement, just responding to the query. Lots of social and economic factors at play.

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Re: What has been your most important skill in achieving financial independence?

Post by RadAudit » Sun Feb 18, 2018 10:04 am

sonofdelrinson wrote:
Sat Feb 17, 2018 11:54 pm
munemaker wrote:
Sat Feb 17, 2018 11:53 pm
For me, the aha moment was understanding the time value of money calculations. Not just being able to plug and chug, but thoroughly understanding them to the point where they are intuitive and factor into all financial decisions you make.
Do you mind explaining what you mean by this a bit more? I'm not sure what the time value of money calculations is.
Didn't see this answered - so I'll take a shot at it.

Alternately, it's called present value (or future value) calculations. Essentially it answers the question if I invested $1 dollar at 5% interest / yr, how much would it be worth in 35 years? Or, if I invested $1 / yr at 5% / yr, how much would that stream of savings be worth in say 30 years? Or you flip that around and say if I need $1 million in 35 years to retire, how much do I need to invest / yr. at 5% interest / yr. to have that much money?

With a little bit of work, you can answer questions like which is more economical - Do I buy a car for $5000. and it lasts 5 years and then I replace it with another car for $5,000 that last five years, etc. or do I buy a car for $15,000 and keep it for 20 years?

You get to vary the amount invested, the timeframe and the interest rates.

You probably have such calculators on your computer, in an Excel spreadsheet, or in an old finance textbook if you want to take a look. When dinosaurs roamed the earth, they use to have books of math tables that answered these types of questions. That's where I was first introduced to it.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

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Re: What has been your most important skill in achieving financial independence?

Post by LadyGeek » Sun Feb 18, 2018 11:12 am

Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: What has been your most important skill in achieving financial independence?

Post by scottinmet » Sun Feb 18, 2018 11:37 am

RadAudit wrote:
Sun Feb 18, 2018 10:04 am
sonofdelrinson wrote:
Sat Feb 17, 2018 11:54 pm
munemaker wrote:
Sat Feb 17, 2018 11:53 pm
For me, the aha moment was understanding the time value of money calculations. Not just being able to plug and chug, but thoroughly understanding them to the point where they are intuitive and factor into all financial decisions you make.
Do you mind explaining what you mean by this a bit more? I'm not sure what the time value of money calculations is.
Didn't see this answered - so I'll take a shot at it.

Alternately, it's called present value (or future value) calculations. Essentially it answers the question if I invested $1 dollar at 5% interest / yr, how much would it be worth in 35 years? Or, if I invested $1 / yr at 5% / yr, how much would that stream of savings be worth in say 30 years? Or you flip that around and say if I need $1 million in 35 years to retire, how much do I need to invest / yr. at 5% interest / yr. to have that much money?

With a little bit of work, you can answer questions like which is more economical - Do I buy a car for $5000. and it lasts 5 years and then I replace it with another car for $5,000 that last five years, etc. or do I buy a car for $15,000 and keep it for 20 years?

You get to vary the amount invested, the timeframe and the interest rates.

You probably have such calculators on your computer, in an Excel spreadsheet, or in an old finance textbook if you want to take a look. When dinosaurs roamed the earth, they use to have books of math tables that answered these types of questions. That's where I was first introduced to it.
Well said RadAudit, and the OP should understand that it is real return and not nominal return that is the key. The idea that your money is not just keeping up with inflation but growing on its own is what makes investing so important. We could all buy just CDs and Treasuries, but we don't because we demand real return for our invested money. The snowball effect is a really awesome thing to watch as you get closer to your goals.

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Re: What has been your most important skill in achieving financial independence?

Post by Taylor Larimore » Sun Feb 18, 2018 11:46 am

Victoria wrote:I agree that luck plays an important role. I strongly disagree with the percentages you allocate to luck and skill.

I was born in the USSR where I faced discrimination in education and career. I came to the U.S.A. as a single parent of a new-born girl. I credit my ability to define professional goals and persistence in pursuing them despite many difficulties, distractions, and others' skepticism for achieving professional and financial success.

I do think that I am special.

Victoria
WINNER of the 2015 Boglehead Contest
Victoria:

I have followed your postings (17,000+ during the last 10 years) and your travels abroad. I know you personally. There is no doubt in my mind you are very "special." You also invented the Boglehead's "secret handshake" using index fingers.

Thank you and best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: What has been your most important skill in achieving financial independence?

Post by VictoriaF » Sun Feb 18, 2018 11:54 am

Taylor Larimore wrote:
Sun Feb 18, 2018 11:46 am
Victoria wrote:I agree that luck plays an important role. I strongly disagree with the percentages you allocate to luck and skill.

I was born in the USSR where I faced discrimination in education and career. I came to the U.S.A. as a single parent of a new-born girl. I credit my ability to define professional goals and persistence in pursuing them despite many difficulties, distractions, and others' skepticism for achieving professional and financial success.

I do think that I am special.

Victoria
WINNER of the 2015 Boglehead Contest
Victoria:

I have followed your postings (17,000+ during the last 10 years) and your travels abroad. I know you personally. There is no doubt in my mind you are very "special." You also invented the Boglehead's "secret handshake" using index fingers.

Thank you and best wishes.
Taylor
Thank you, Taylor, so much! Your opinion means a lot to me. You are a powerful force behind starting Bogleheads Reunions, creating this forum, maintaining its civility, and providing a simple advice that works.

Anyone looking for an important skill in achieving financial independence will do well by learning, internalizing, and following your advice.

I value our personal interactions and look forward to sharing an index-finger-shake at more occasions,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: What has been your most important skill in achieving financial independence?

Post by PopArt » Sun Feb 18, 2018 12:08 pm

Similiar to many other Bogleheads who have responded, for us being disciplined (with some lucky tailwinds) has helped contribute most to our financial independence. We are disciplined in how we save, invest, spend and most importantly we stay the course when everyone else is jumping ship.

There are so many ways in life to get from Point A to Point B, as long as you know where you are going, be patient, enjoy the journey and try not to get distracted along the way...stay the course, it will be worth it when you arrive at your destination.

Cheers,
PopArt
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Re: What has been your most important skill in achieving financial independence?

Post by Tanelorn » Sun Feb 18, 2018 12:30 pm

I wanted to highlight several of the points made by earlier commenters. In no particular order,

1. Excel - learn it, it is such a useful tool for everything, especially open-ended explorations of mathematical problems or models. While slow sometimes, it's much friendlier than coding "software" in that you can see everything that seems going on so it's much easier to "debug". In many jobs, this is very useful and an exact answer is often less important than the right intuition reached more quickly.

2. No excuses. There's never been a better time to find the answers to your questions / problems online (here among other places), so if you have an issue, get out there, find some good solution or advice, and follow through. . That last part is where many fail.

3. Save. Investment success doesn't matter much until you've saved enough to matter. This goes together with living below your means so you can save some of your paycheck, ideally in retirement accounts.

4. Investment skill / discipline. Find a good investment strategy and follow it. The Bogleheads "index, buy and hold" is an easy one, but the hard part is you have the fortitude not to get scared and sell at the bottom during a market crash, and this will be especially hard as a young person who hasn't seen panick in the markets before. Even if you're not able to hold your nose and buy more, at least don't sell everything to cash just because you're down a lot. Having a portfolio with an appropriate risk level makes it much easier to "stay the course". The Bogleheads investment strategy is not the only one out there, but when you start looking for active strategies and outperformance, there is a LOT more work, false leads, expense, and uncertainty.

5. Marry wisely or not at all.
VictoriaF wrote:
Sun Feb 18, 2018 9:03 am
minimalistmarc wrote:
Sun Feb 18, 2018 4:55 am
It is 95% luck, 5% skill.

We are all very fortunate people, and it is a mistake to think we got here because we “deserve” it.

Born in most over world locations with the same heart/mind/soul/body it wouldn’t happen.

Never think you are special.
I agree that luck plays an important role. I strongly disagree with the percentages you allocate to luck and skill.

I was born in the USSR where I faced discrimination in education and career. I came to the U.S.A. as a single parent of a new-born girl. I credit my ability to define professional goals and persistence in pursuing them despite many difficulties, distractions, and others' skepticism for achieving professional and financial success.

I do think that I am special.

Victoria
I wanted to support Victoria's reply in response to several very "lucky" earlier posters. Sure luck may play a role, but so much of our lives is a product of our own making - thousands of financial/health/relationship choices, good or bad, compounded over decades. Compounding early makes such a huge difference in financial outcomes.

More than that, I think such a fatalist / deterministic philosophy that attributes so much to chance is a bad bet along the lines of Pascal's Wager (about believing in God "just in case"). Believe in your own free will and taking responsibility for your life will likely lead to very good financial outcome IF luck isn't the overriding factor, and if it is, well, your fallback is hoping to be lucky but in that case there's not much you could have done anyway. Might as well try in case it matters.

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Re: What has been your most important skill in achieving financial independence?

Post by GerryL » Sun Feb 18, 2018 4:48 pm

Regarding the importance of luck:

Luck plays a role in all of our lives, both good luck and bad luck. I contend that a key skill is recognizing your luck and not squandering it, neither the good nor the bad. A lot of us have been successful because we build on our good luck and learn from our bad luck. (Or better yet, learn from the bad luck of others.)

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Re: What has been your most important skill in achieving financial independence?

Post by Trader/Investor » Sun Feb 18, 2018 5:00 pm

GerryL wrote:
Sun Feb 18, 2018 4:48 pm
Regarding the importance of luck:

Luck plays a role in all of our lives, both good luck and bad luck. I contend that a key skill is recognizing your luck and not squandering it, neither the good nor the bad. A lot of us have been successful because we build on our good luck and learn from our bad luck. (Or better yet, learn from the bad luck of others.)
Exactly, you can compound your good luck over time just as many compound their bad luck. Again, Max Gunther does an excellent job in his book about exploiting factors that tilt luck in our favor. My nest egg is seven figures higher than had I simply adhered to the Boglehead philosophy. But there is such a rigidness here that to keep the peace I just attribute that to good luck than to rock the boat and suggest otherwise.

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Re: What has been your most important skill in achieving financial independence?

Post by lostdog » Sun Feb 18, 2018 5:02 pm

Hear the clock ticking? That’s your life flying by while you listen to market pundits and watch stock prices fluctuate. -Humble Dollar

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Re: What has been your most important skill in achieving financial independence?

Post by abuss368 » Sun Feb 18, 2018 5:23 pm

VictoriaF wrote:
Sat Feb 17, 2018 6:01 pm

I second Christine's recommendation of Excel. And I consider it far more useful than complicated software. Sophisticated software is usually a black box. It tells you what to input and then it outputs the results. But it's difficult to understand its logic and do what-if scenarios. With Excel, you have to think about every number you enter and you can do simulations of the results based on various inputs. This leads to a better understanding of what you are doing (and what you should not be doing). Excel is also less likely to become obsolete, whereas commercial software makers can go out of business. For these reasons, I do my taxes in Excel instead of using TurboTax or alike.

You can buy a book with an Excel primer and go through its most common operations. Then you will use it whichever way you want but will also keep in mind that other features exist. If later, your needs change, you will know to look up relevant features.

Victoria
Hi Victoria -

For almost a decade we entered all financial transactions into Quicken. About ten years ago we stopped using Quicken cold turkey (and in Boglehead fashion saved the annual fee). No we have a very simple three tab Excel file that provides a snapshot and trending of our investment portfolio.

Perhaps we will evolve to Taylor's ultimate level of simplicity and not even use Excel someday.

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: What has been your most important skill in achieving financial independence?

Post by abuss368 » Sun Feb 18, 2018 5:24 pm

VictoriaF wrote:
Sat Feb 17, 2018 6:01 pm
For these reasons, I do my taxes in Excel instead of using TurboTax or alike.

Victoria
Hi Victoria -

How do you prepare your income tax return in Excel? Are you preparing the actual tax return or creating supporting schedules in Excel in order to prepare the tax return?

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: What has been your most important skill in achieving financial independence?

Post by abuss368 » Sun Feb 18, 2018 5:25 pm

VictoriaF wrote:
Sun Feb 18, 2018 9:03 am

I agree that luck plays an important role. I strongly disagree with the percentages you allocate to luck and skill.

I was born in the USSR where I faced discrimination in education and career. I came to the U.S.A. as a single parent of a new-born girl. I credit my ability to define professional goals and persistence in pursuing them despite many difficulties, distractions, and others' skepticism for achieving professional and financial success.

I do think that I am special.

Victoria
An incredible story and one that I had not read on earlier posts.

Best wishes.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: What has been your most important skill in achieving financial independence?

Post by VictoriaF » Sun Feb 18, 2018 5:39 pm

abuss368 wrote:
Sun Feb 18, 2018 5:24 pm
VictoriaF wrote:
Sat Feb 17, 2018 6:01 pm
For these reasons, I do my taxes in Excel instead of using TurboTax or alike.

Victoria
Hi Victoria -

How do you prepare your income tax return in Excel? Are you preparing the actual tax return or creating supporting schedules in Excel in order to prepare the tax return?

Best.
I create schedules in Excel and then transfer the numbers into fillable PDFs of the IRS forms. In Excel, I list line numbers and line names from the IRS forms so that I know exactly where the numbers should go. On the side, I do calculations for worksheets. Every year, I copy the previous year's tab and then make necessary modifications.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: What has been your most important skill in achieving financial independence?

Post by Jon H » Sun Feb 18, 2018 5:41 pm

Health. Take care of yourself the best you can. Plan and invest in your body and mind.

All this financial investment stuff is of lower value if you’re dealing with poor health.
Consider gain and loss, but never be greedy and everything will be alright (fortune cookie)

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Re: What has been your most important skill in achieving financial independence?

Post by TG2 » Sun Feb 18, 2018 6:01 pm

The only real skill involved for me was the ability to think logically and rationally rather than emotionally. That does a lot to enable and instill discipline. I had an interest in money early on so was able to amass a certain amount of financial knowledge and understanding, and I always had a saver mentality rather than a spender mentality which also helped tremendously. Knowledge and discipline is a very powerful combination, and will take you far if you let them.

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Re: What has been your most important skill in achieving financial independence?

Post by whodidntante » Sun Feb 18, 2018 6:17 pm

Critical thinking was the most valuable skill for me.

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Re: What has been your most important skill in achieving financial independence?

Post by Artful Dodger » Sun Feb 18, 2018 6:44 pm

As someone said in one of the earlier posts - pay yourself first. I've always made a decent living, and always put money towards retirement savings. First with an IRA, then after the company i worked for started a 401k, making as large a contribution as I could, and then making the maximum. When I got married, I started the same with my wife's deferred comp. In her case, we put in each raise, until we were maxing out hers as well. I never worried too much about after tax saving, and in reality maxing the tax deferred accounts did the trick (ie FI) for us.

I certainly made plenty of mistakes - too much CC debt, wasteful purchases, bad investments. But, I always paid myself first, lived off of what was left over, and the mistakes i made were after my retirement saving.

I wish i had found this site earlier, but my investing history predates it by 25 years. Early investing + compound interest + low cost funds will do the trick.

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Re: What has been your most important skill in achieving financial independence?

Post by trueson1 » Sun Feb 18, 2018 6:46 pm

Paying yourself first and putting it on auto pilot!

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Re: What has been your most important skill in achieving financial independence?

Post by abuss368 » Sun Feb 18, 2018 6:52 pm

Jon H wrote:
Sun Feb 18, 2018 5:41 pm
Health. Take care of yourself the best you can. Plan and invest in your body and mind.

All this financial investment stuff is of lower value if you’re dealing with poor health.
This is very true indeed. The older I get the more I appreciate this.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

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Re: What has been your most important skill in achieving financial independence?

Post by Almost there » Sun Feb 18, 2018 7:17 pm

Saving the money from every raise and adding it to the 401K).
Recognizing the difference between a want and a need.
Buy a used car and selling it when it stops running.
Not listening to people who don't know much about saving since they are spenders.

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Re: What has been your most important skill in achieving financial independence?

Post by hoops777 » Sun Feb 18, 2018 7:22 pm

Starting my own business at 42,being successful and saving money.Never ever thought it would happen.
K.I.S.S........so easy to say so difficult to do.

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Re: What has been your most important skill in achieving financial independence?

Post by 2pedals » Sun Feb 18, 2018 7:33 pm

Take care of your career. Learn a skill that pays well and that you enjoy. Work hard, please your bosses with exceptional performance, challenge yourself and build on your successes. Max out your 401K and save money in your taxable account as well.

Most of all passion for life and love your significant other. Don't love things. Disconnect your attachment to stuff.

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Re: What has been your most important skill in achieving financial independence?

Post by DaftInvestor » Sun Feb 18, 2018 8:33 pm

Work ethic and drive and directing my career into something with more earnings potential than my initial career.

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Re: What has been your most important skill in achieving financial independence?

Post by Raybo » Sun Feb 18, 2018 8:37 pm

sonofdelrinson wrote:
Sat Feb 17, 2018 2:20 pm
Raybo wrote:
Sat Feb 17, 2018 2:17 pm
Try to get good at two unrelated things that, when combined together, uniquely qualify you to do a high paying (and satisfying) job.
Very interesting...mind expanding on this a bit more? Examples?
Example from my own life. I like to speak in public. Always have. I was on the speech team in High School and even got a few awards for it. I was also quick with math. When I was allowed to study computer programming in 1969 (FORTRAN on punch cards), I discovered that I had a real aptitude for it, as well.

Later on, when computer programming became more valuable, I was able to combine my public speaking and computer programming abilities to sell training courses for company employees. I got better paid than if I only did either of the two: computer programming or corporate training. The number of people who liked to speak in public and who knew all about computers, UNIX and computer programming was not very large, making my skill set combination worth more due to supply and demand.

Being real good in one thing forces someone to compete with all the other people who are real good at that same skill. While having another (unrelated) skill that came creatively combined with the first one greatly narrows the competition, resulting in higher demand and better pay.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

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Re: What has been your most important skill in achieving financial independence?

Post by sonofdelrinson » Sun Feb 18, 2018 9:42 pm

2pedals wrote:
Sun Feb 18, 2018 7:33 pm
Take care of your career. Learn a skill that pays well and that you enjoy. Work hard, please your bosses with exceptional performance, challenge yourself and build on your successes. Max out your 401K and save money in your taxable account as well.

Most of all passion for life and love your significant other. Don't love things. Disconnect your attachment to stuff.
Any advice on that last part? Consumerism is a pretty tough thing to pull away from for long.

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Re: What has been your most important skill in achieving financial independence?

Post by RadAudit » Sun Feb 18, 2018 10:43 pm

sonofdelrinson wrote:
Sun Feb 18, 2018 9:42 pm
Consumerism is a pretty tough thing to pull away from for long.
It is? How many cars can you drive at the same time? How many pairs of shoes can you wear at the same time?

How much stuff do you need? If you live in a three bedroom home and have to rent a storage unit or two to house additional household goods, you may have more stuff than you need.

Sooner or later you have to recognize that you don't need to buy everything someone wants to sell you.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

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Re: What has been your most important skill in achieving financial independence?

Post by KlangFool » Sun Feb 18, 2018 10:51 pm

sonofdelrinson wrote:
Sun Feb 18, 2018 9:42 pm
2pedals wrote:
Sun Feb 18, 2018 7:33 pm
Take care of your career. Learn a skill that pays well and that you enjoy. Work hard, please your bosses with exceptional performance, challenge yourself and build on your successes. Max out your 401K and save money in your taxable account as well.

Most of all passion for life and love your significant other. Don't love things. Disconnect your attachment to stuff.
Any advice on that last part? Consumerism is a pretty tough thing to pull away from for long.
sonofdelrinson,

It is not hard if you do not buy the same big expensive house as your income peers. If you buy or rent a house at one level below your income peers, you will live in a neighborhood where people will spend less than your income peers.

On the other hand, if you are "House Poor", nothing else that you do will matter.

KlangFool

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Re: What has been your most important skill in achieving financial independence?

Post by Sandtrap » Sun Feb 18, 2018 11:00 pm

VictoriaF wrote:
Sun Feb 18, 2018 9:03 am
minimalistmarc wrote:
Sun Feb 18, 2018 4:55 am
It is 95% luck, 5% skill.

We are all very fortunate people, and it is a mistake to think we got here because we “deserve” it.

Born in most over world locations with the same heart/mind/soul/body it wouldn’t happen.

Never think you are special.
I agree that luck plays an important role. I strongly disagree with the percentages you allocate to luck and skill.

I was born in the USSR where I faced discrimination in education and career. I came to the U.S.A. as a single parent of a new-born girl. I credit my ability to define professional goals and persistence in pursuing them despite many difficulties, distractions, and others' skepticism for achieving professional and financial success.

I do think that I am special.

Victoria
+1
You are indeed, "special".
And admired. :D
There is an old saying. Something like, "the more I believe in myself, the more I learn, the harder I try, the luckier I get."
Achievement is not random nor "lucky", though taking advantage of every opportunity feels "lucky".
mahalo,
jim :D

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Re: What has been your most important skill in achieving financial independence?

Post by Sandtrap » Sun Feb 18, 2018 11:03 pm

abuss368 wrote:
Sun Feb 18, 2018 6:52 pm
Jon H wrote:
Sun Feb 18, 2018 5:41 pm
Health. Take care of yourself the best you can. Plan and invest in your body and mind.

All this financial investment stuff is of lower value if you’re dealing with poor health.
This is very true indeed. The older I get the more I appreciate this.
+1
And, with each "health episode", true "life" priorities take on new meaning.. . and levity.
j :D

Hulu
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Re: What has been your most important skill in achieving financial independence?

Post by Hulu » Sun Feb 18, 2018 11:03 pm

There's a guy on YouTube that is really good at explaining Excel. Mr Excel or something. The hardest thing for me was figuring out the right terms to search for. I had the same ah ha moment as others when projecting my financial independence. It didn't happen as planned but inspired me to save and invest.

scrabbler1
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Re: What has been your most important skill in achieving financial independence?

Post by scrabbler1 » Sun Feb 18, 2018 11:31 pm

VictoriaF wrote:
Sun Feb 18, 2018 5:39 pm
abuss368 wrote:
Sun Feb 18, 2018 5:24 pm
VictoriaF wrote:
Sat Feb 17, 2018 6:01 pm
For these reasons, I do my taxes in Excel instead of using TurboTax or alike.

Victoria
Hi Victoria -

How do you prepare your income tax return in Excel? Are you preparing the actual tax return or creating supporting schedules in Excel in order to prepare the tax return?

Best.
I create schedules in Excel and then transfer the numbers into fillable PDFs of the IRS forms. In Excel, I list line numbers and line names from the IRS forms so that I know exactly where the numbers should go. On the side, I do calculations for worksheets. Every year, I copy the previous year's tab and then make necessary modifications.

Victoria
I have created skeleton versions of my income tax forms in a spreadsheet and transfer the numbers to the fillable tax forms, too. I have this part of the spreadsheet linked to my checkbook register so I can create estimated tax returns (and estimated taxes) during the year. Over the years, I have had to add some tax forms such as for the ACA and non-resident state income tax returns.

scrabbler1
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Re: What has been your most important skill in achieving financial independence?

Post by scrabbler1 » Sun Feb 18, 2018 11:40 pm

sonofdelrinson wrote:
Sat Feb 17, 2018 12:29 pm
I'm 22 years old, beginning my career and I'm curious to hear from other people closer to financial independence what have been some of the most important "non-financial" skills they attribute to their FI.

Right now I have a job I like and no debt, plus contributing 20-25% gross income to retirement every year. My instinct tells me to keep up my personal education with tons of books and work hard to develop my cross-industry skills in my current job - things like communication, time management, etc.

I've always felt more drawn toward meaningful improvement in oneself as a means to financial independence as opposed to nickel and diming expenses with a budget/using coupons type mentality.

Might be overthinking this.

Side question - is saving 25% gross income aggressive enough to "safely" achieve FI at age 65? I've found 25% savings, 25% tax, 40% need, 10% want to be a nice guideline...curious what other people use.
I retired 9 years ago at age 45, having reached FI. Here are some of the big things I did (or didn't do) to get there.

1. LBYM - Live Below Your Means.

2. When buying my co-op apartment 29 years ago, I followed a rule I learned at the time: Buy the worst apartment in the best building.

3. Be an outlier. Going my own way and doing my own thing, this always helped me resist societal pressures. For example, I am an atheist, so I am immune to any religious pressures. I am single, so no marriage/spousal pressures.

4. Don't smoke. It's a filthy, disgusting, unhealthy, and expensive habit.

5. No debts. I paid off my student loans 2 years after I graduated. I always paid cash for cars (low-end cars). I paid off my mortgage in 9 years.

6.And......at the risk of ruffling some feathers, no kids. I am childfree, never having any desire to be a parent. While I knew this years before I planned on being FI, I did save a boatload of money by choosing to be this way (another example of being an outlier, too).

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El Greco
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Re: What has been your most important skill in achieving financial independence?

Post by El Greco » Sun Feb 18, 2018 11:55 pm

Here's a skill I don't think has been mentioned:

Developing an ability to self-educate. I have always been able to work and earn good money by teaching myself several disparate trades. This needs to be combined with unshakeable confidence that you can accomplish anything you set your mind to. This doesn't just apply to career but to other areas as well.

For instance, educating yourself about personal finance and investing rather than paying and trusting an advisor. Fixing your own broken stuff instead of relying on incompetent repair people. Educating yourself on your own health and to a limited extent being your own doctor. Forming your own opinions about products and services and seeking out VALUE, not just buying the cheapest thing. I could go on and on...but I won't. The fact that you're asking at 22 means you've already got plenty on the ball. :happy

Cruise
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Re: What has been your most important skill in achieving financial independence?

Post by Cruise » Mon Feb 19, 2018 4:10 am

Most important skills:

Patience/Delay of Gratification.

This enabled me to stay in school for a very long time and get three graduate degrees, including one when I was working full time. (These degrees enormously increase my earning potential.) These skills also enabled me to not have lots of material things and save.

Judgment.

Some have it/develop it. Some never quite have it. From mate selection, career advancement, and everything in between, good judgement is essential.

Integrity.

Do the right thing. Honor commitments. Honesty. Treat others with respect.

Mr.BB
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Re: What has been your most important skill in achieving financial independence?

Post by Mr.BB » Mon Feb 19, 2018 4:33 am

Save early / Save often
Invest in higher risk assets (small cap) when your earlier, adjust accordingly as you get older
When the market goes into a tail spin, invest more
Don't forget to your enjoy life! I totally disagree with the earlier comments of minimal travel. It's a beautiful world, see as much of it as you can!
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."

minimalistmarc
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Re: What has been your most important skill in achieving financial independence?

Post by minimalistmarc » Mon Feb 19, 2018 4:35 am

VictoriaF wrote:
Sun Feb 18, 2018 9:03 am
minimalistmarc wrote:
Sun Feb 18, 2018 4:55 am
It is 95% luck, 5% skill.

We are all very fortunate people, and it is a mistake to think we got here because we “deserve” it.

Born in most over world locations with the same heart/mind/soul/body it wouldn’t happen.

Never think you are special.
I agree that luck plays an important role. I strongly disagree with the percentages you allocate to luck and skill.

I was born in the USSR where I faced discrimination in education and career. I came to the U.S.A. as a single parent of a new-born girl. I credit my ability to define professional goals and persistence in pursuing them despite many difficulties, distractions, and others' skepticism for achieving professional and financial success.

I do think that I am special.

Victoria
Agreed!

gotester2000
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Re: What has been your most important skill in achieving financial independence?

Post by gotester2000 » Mon Feb 19, 2018 4:52 am

scrabbler1 wrote:
Sun Feb 18, 2018 11:40 pm
sonofdelrinson wrote:
Sat Feb 17, 2018 12:29 pm
I'm 22 years old, beginning my career and I'm curious to hear from other people closer to financial independence what have been some of the most important "non-financial" skills they attribute to their FI.

Right now I have a job I like and no debt, plus contributing 20-25% gross income to retirement every year. My instinct tells me to keep up my personal education with tons of books and work hard to develop my cross-industry skills in my current job - things like communication, time management, etc.

I've always felt more drawn toward meaningful improvement in oneself as a means to financial independence as opposed to nickel and diming expenses with a budget/using coupons type mentality.

Might be overthinking this.

Side question - is saving 25% gross income aggressive enough to "safely" achieve FI at age 65? I've found 25% savings, 25% tax, 40% need, 10% want to be a nice guideline...curious what other people use.
I retired 9 years ago at age 45, having reached FI. Here are some of the big things I did (or didn't do) to get there.

1. LBYM - Live Below Your Means.

2. When buying my co-op apartment 29 years ago, I followed a rule I learned at the time: Buy the worst apartment in the best building.

3. Be an outlier. Going my own way and doing my own thing, this always helped me resist societal pressures. For example, I am an atheist, so I am immune to any religious pressures. I am single, so no marriage/spousal pressures.

4. Don't smoke. It's a filthy, disgusting, unhealthy, and expensive habit.

5. No debts. I paid off my student loans 2 years after I graduated. I always paid cash for cars (low-end cars). I paid off my mortgage in 9 years.

6.And......at the risk of ruffling some feathers, no kids. I am childfree, never having any desire to be a parent. While I knew this years before I planned on being FI, I did save a boatload of money by choosing to be this way (another example of being an outlier, too).
It is one thing having an empty nest when kids move out, quite another not having at all.
My purpose of being FI was to live stress free with my family. My needs are limited and I dont even know what to do with all that money if there is no family? Yes, one can pleasure oneself till one gets old, take exotic world tours, climb EVEREST, donate, be social et al. but at the end of the day I do need a family for a long part of life though they make me crazy at times😊

Jim85
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Re: What has been your most important skill in achieving financial independence?

Post by Jim85 » Mon Feb 19, 2018 6:23 am

We are frugal, don't pay extra for fancy labels, always paid credit card bills in full, been lucky enough to have been paid for every weekday of my life since college (never been laid off, never took leave without pay), don't buy big expensive "stuff", still live in my first home (haven't had a mortgage since I can't remember) ...etc. BUT - most important to reaching FI has to have been maxing out 401ks/IRAs since our 20s and mostly in stock mutual funds and never tapping into any of that. I think everything else is just noise.

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AtlasShrugged?
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Re: What has been your most important skill in achieving financial independence?

Post by AtlasShrugged? » Mon Feb 19, 2018 7:30 am

Marrying a smart frugal hard working woman.
This......X1,000,000

Of all the things you can do, pick the right partner. Divorce has killed more portfolios than high fund fees.
“If you don't know, the thing to do is not to get scared, but to learn.”

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DaleMaley
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Re: What has been your most important skill in achieving financial independence?

Post by DaleMaley » Mon Feb 19, 2018 8:14 am

I grew up on a farm. We had to do our chores every day, rain or shine, except on your birthday. On your birthday, Dad would do your chores. When I got to college, doing homework every night was the same as doing my daily chores on the farm, even though many of the other kids chose partying over homework.

I echo the advice of marrying a hard-working and frugal woman. When I graduated from college, I owed $1,000 for a student loan [equivalent to $3,820 in 2017 dollars] and she came with a paid up car!

In 1979, the year I got out of college, there were no personal computers yet. From engineering school, I did have a programmable Texas Instruments calculator. I sat down and figured out I would gross a ton of money over a 30 year working career as an engineer. I decided a portion of that money should be mine when I was done working. I saved anywhere from 15% to 25% of gross income from that point on.

I took an adult ed class at a local High School on investments. I learned the only investment that beat inflation and taxes over the long haul was the stock market. I could not figure out which stock mutual fund to invest in, which would give the best long-term results, so I picked 3 of them that had top tier performance the past 5 years.

Within a few years, all 3 of these funds drifted to the bottom half of performers. I went to night school while working full-time to get an MBA. In my finance class, for my term paper project, I decided to try to figure out how to pick the stock fund that would perform the best in the future. My professor had to pre-approve the term paper project, and his comment was, "I would like to know the answer to that question also!". Doing that term paper research lead me to the discovery of Index funds. I got an A on the term paper. In 1990, I switched all my investments to Vanguard Index Funds. Life has been good every since then.
Most investors, both institutional and individual, will find that the best way to own common stocks is through an index fund that charges minimal fees. – Warren Buffett

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czeckers
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Re: What has been your most important skill in achieving financial independence?

Post by czeckers » Mon Feb 19, 2018 8:35 am

The ability to earn a high income.
The Espresso portfolio: | | 16% LCV, 16% SCV, 16% EM, 8% Int'l Value, 8% Int'l Sm, 8% US REIT, 8% Int'l REIT, 20% Inter-term US Treas | | "A journey of a thousand miles begins with a single step."

hoops777
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Re: What has been your most important skill in achieving financial independence?

Post by hoops777 » Mon Feb 19, 2018 12:26 pm

To say that success is 95 pct luck is actually demeaning to people who have worked very hard to achieve success.There is usually some luck involved with almost anything accomplished but 95 pct......ridiculous.
I also wonder how worthwhile it is to achieve financial independence by living a Spartan life.I think there is a happy medium,but to each their own.We all are driven by different goals,beliefs,wants,needs and worries.
K.I.S.S........so easy to say so difficult to do.

donall
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Re: What has been your most important skill in achieving financial independence?

Post by donall » Mon Feb 19, 2018 12:36 pm

I really hate shopping and married a spouse who really, really hates shopping.

Details
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Re: What has been your most important skill in achieving financial independence?

Post by Details » Mon Feb 19, 2018 6:25 pm

sonofdelrinson wrote:
Sat Feb 17, 2018 2:20 pm
Raybo wrote:
Sat Feb 17, 2018 2:17 pm
Try to get good at two unrelated things that, when combined together, uniquely qualify you to do a high paying (and satisfying) job.
Very interesting...mind expanding on this a bit more? Examples?

I have one,
A fellow I worked with in Geo Physical consulting Company, experts in pollution testing, groundwater movement, remediation,
soil testing etc, was studying law. His skills will be very valuable as an attorney in pollution litigation.

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bengal22
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Re: What has been your most important skill in achieving financial independence?

Post by bengal22 » Mon Feb 19, 2018 8:35 pm

My most important skill was the willingness to work hard and smart and thus to maximize my income. I still am a big believer that the biggest determinant in financial independence is the amount of income. If you couple that with the discipline to live WITHIN your means and to invest smartly(Index funds with an established AA) then I think one will achieve the GOAL. Earn All You Can.....Give All You Can.....Save All You Can. John Wesley summed it up pretty well.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley

BradJ
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Re: What has been your most important skill in achieving financial independence?

Post by BradJ » Mon Feb 19, 2018 8:40 pm

Mary someone who shares the same values and always try to act on long term goals, not short term thinking.

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Re: What has been your most important skill in achieving financial independence?

Post by bayview » Mon Feb 19, 2018 9:13 pm

Live cheap, don’t spend; aka, save save save.

You wind up with lots of savings, and along the way, you learn what’s worth spending money on vs. what’s empty, meaningless Stuff.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

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