What is the best financial decision you ever made?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
InMyDreams
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Re: What is the best financial decision you ever made?

Post by InMyDreams »

Listening to the tidbits that fell my way.

Probably the biggest reason I've been able to retire - I went to a TIAA retirement seminar, that was talking both about the 401a plan, but also talked about starting a 403b. Initially I was putting in very little, but the next year decided I should put in at least as much as the government allowed for a tIRA (which I wasn't eligible to do at that time). Retirement savings rate maintained or increased over the years. Never maxed out the 403b contribs tho - but I did on Roth IRA at a later time.

My brother remarked to me when I was in college that credit card debt was a bad thing. Pretty much followed that advice.

Managed to stay away from non-fiduciary FAs - at least twice I could have gone down that road.

Stayed employed.

Bought a house. Went to a first-time-homebuyer community ed class. One of the classes was about getting a home loan, with the advice that you are buying your home loan, and you should comparative shop for it just like you do for any high-ticket item. Served me well then and in refi's and car loans.

My mother teaching me that inflation eats your savings unless you earn enough to keep or outpace it.
azianbob
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Re: What is the best financial decision you ever made?

Post by azianbob »

Good

1. Paying off credit card in full each month

2. Having no debt

3. Spend less than we earn.

4. Max out retirement accounts (401k, IRA, HSA)

Bad

1. Bought new car right after getting first job.

2. Buying a luxury car at 30.

3. Not buying a home in 2011-2013

4. Because have not pulled trigger on home, have kept downpayment in CDs for a decade of historically low interest rates.

5. Did not know what stock market was so only did 401k up to match first 6 years of my career (randomly picked 6 different funds) and saved rest in cash.
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gr7070
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Re: What is the best financial decision you ever made?

Post by gr7070 »

1. Living within my means.

2. Getting an engineering degree.
Silverado
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Re: What is the best financial decision you ever made?

Post by Silverado »

Oddly enough, the best is pretty close to almost being the worst: Started investing as a brand new 2LT in the Army. That developed a habit that has stayed for the last 27 years.

A lot of folks can likely guess why it is also close to being the worst...that early investing was with USPA&IRA. Moved that IRA over to TRP after about six years, then to Vanguard three years ago. It’s grown into six figures over the years, and I am very pleased with how it ended up, and will never play what if about those early 'Sales and Creation' charges of 50% for the first year, then 5.75% after that. With the IRA limit of $2000 at the time, I blew more than that on beer in those days.
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WoodSpinner
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Re: What is the best financial decision you ever made?

Post by WoodSpinner »

OP,

Well many of my better decisions have been covered (e.g. spouse, savings, luck etc.), I thought I would throw out a more unique one.

I quit my job as an IT consultant in the early ‘90s to take a 50% + pay cut and start working for a Megacorp. It was a great move for my Mental Health and stress levels which translated to a much more enjoyable life while still meeting my financial obligations and savings goals. Gave up the long commutes (90 minutes each way), the worry about finding the next contract, and the pain of leaving friends as a contract ended.

All in all, one of my better decisions!

WoodSpinner
Last edited by WoodSpinner on Mon Jun 29, 2020 3:13 pm, edited 1 time in total.
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Watty
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Re: What is the best financial decision you ever made?

Post by Watty »

When I was about 30 and getting the itch to buy my first house I moved from the Bay Area, which has always been expensive, to a lower cost of living area where houses cost maybe a fifth of what they would cost in the Bay Area.

The quality of life was a lot higher too even though it was a different lifestyle.

I have moved around since then but my impression is that salaries really do not vary nearly enough between high cost of living areas and low cost of living areas to make them a good financial choice unless you are in some real special situation.

Non-financial factors are also important but when you are in your 30s with kids and can't afford to buy a decent house with decent schools being near a beach may not be worth as much as when you were 23.
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MrBobcat
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Re: What is the best financial decision you ever made?

Post by MrBobcat »

Living below my means.
Vanguard Fan 1367
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Re: What is the best financial decision you ever made?

Post by Vanguard Fan 1367 »

Reading The John Bogle Reader
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."
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McGilicutty
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Re: What is the best financial decision you ever made?

Post by McGilicutty »

Taking a job in a VHCOL area at MegaCorp which offered a nice stock options package. Over the years those stock options rose nicely and eventually allowed me to cash out and take a much less stressful job in a VLCOL area.

I don't believe that stock options are offered for employees at my level anymore (they've switched to RSUs as I understand it), but it was a nice gamble for me that paid off.
CrossOverGuy
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Re: What is the best financial decision you ever made?

Post by CrossOverGuy »

1) Spending the night on the street in NYC years ago to get in a "bread line" for an application for subsidized housing (Mitchell-Lama) and getting called for an apartment 2 years later. It's rent-stabilized now. Grateful that it saved me lots of money over 30 years. Savings allowed me to take expensive voice lessons and become professional opera singer and actor and not have to make that much money while temping between gigs to make rent.

2) Reading articles and books by Jonathan Clements and Jason Zweig, reading Eric Tyson books on Investing for Dummies, Burton Malkiel's "Random Walk Down Wall Street", reading books by John Bogle and discovering Bogleheads and the power of low-cost, mostly index fund investing.

3) Not freaking out when the market goes crazy, having learned from some of the folks in #2 above. Stay the course.
Last edited by CrossOverGuy on Mon Jun 29, 2020 12:49 pm, edited 3 times in total.
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FrugalInvestor
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Re: What is the best financial decision you ever made?

Post by FrugalInvestor »

Sheepdog wrote: Mon Jun 29, 2020 11:24 am
FrugalInvestor wrote: Mon Jun 29, 2020 11:10 am I married a person with similar attitudes toward saving and spending which happen to be consistent with the Boglehead philosophy. I have been very fortunate in many ways.
I was just going to submit my good fortune....great fortune.....of finding my wife on a blind date 60 years ago, to whom I fell deeply in love with and who has kept me in line on finances and everything else. Then I found that you already beat me to it so I hope you don't mind that I tag along.
Weren't we fortunate?

(Now, I've got to think what am I going to do for her on our 60th next New Years Eve.)
It sounds like you beat me to it by quite a few years. Hopefully I can continue to follow your example. Congrats on your upcoming 60th!
Have a plan, stay the course and simplify, but most importantly....Ignore the Noise!
02nz
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Re: What is the best financial decision you ever made?

Post by 02nz »

Maxed out 401k (well, TSP) in most of my early working years, and stayed the course during the bear market caused by the Great Financial Crisis. The $700 or so I invested every other week probably enjoyed the highest returns I'll ever see in my lifetime.
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Artful Dodger
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Re: What is the best financial decision you ever made?

Post by Artful Dodger »

Left working social service and switched to a career in sales.
as9
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Re: What is the best financial decision you ever made?

Post by as9 »

About six years ago I was offered an inflated title at a floundering start-up along with an almost doubling of salary and a retention bonus nearly equal to my then current salary. I turned it down to take a position at a large company for a more modest raise and a title more representative of where I was. I made a bet that a) the start-up wasn't going anywhere and b) the title and experience at the larger company would open more doors in the future.

Six months after I made that decision the start-up was sold for pennies on the dollar and largely disbanded. The shares I had were worthless and the company I would have been working for was in a different industry and not at all interesting to me.

Instead I'm now at a great company making more than the offer I turned down and, as a bonus, no longer have a 2-3 hour daily commute. I'm also in a much better position to take another large leap in terms of comp.
123
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Re: What is the best financial decision you ever made?

Post by 123 »

Switched to primarily an index fund (mostly Vanguard) approach over 30 years ago.
The closest helping hand is at the end of your own arm.
hicabob
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Re: What is the best financial decision you ever made?

Post by hicabob »

It was taking the jump and starting my own company at 49yo after making other people $$$ for years. Tough at first with 60 hour work weeks cranking code and writing large checks every month for prototype parts but the company took off after a year and the financial rewards ended up being more than I expected resulting in "way more than enough" and retirement at 57.
shah8
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Re: What is the best financial decision you ever made?

Post by shah8 »

The best financial decision I ever made was to turn my garage In 1994 into a guest house In Los Angeles and have been renting it out ever since.
ChiKid24
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Re: What is the best financial decision you ever made?

Post by ChiKid24 »

260chrisb wrote: Mon Jun 29, 2020 8:47 am
tvubpwcisla wrote: Mon Jun 29, 2020 7:29 am For me, so far, it has been to Max out my 401K every year.

:moneybag
Yes, this for 20 years, a disciplined long term and knowledgeable approach, living well below my means always, and clear thinking as it relates to ANY financial decision. Was I supposed to have just one?? :D
I used to think it was maxing out the 401k to the fed limit every year, then realized (through BH) I should/could do more. Learned about the mega backdoor ROTH here and found out my company offers in-plan ROTH conversions. I'm on my 2nd year of maxing that out, adding about $60k in contributions to ROTH money, doubling my prior accumulated ROTH balance from when I was income eligible to fund. Will result in a nice mix of taxable, tax def, tax free ROTH at retirement.
Dave55
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Re: What is the best financial decision you ever made?

Post by Dave55 »

Started my own business at age 30. Reinvented the business at age 54 into a second career.

Dave
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beyou
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Re: What is the best financial decision you ever made?

Post by beyou »

Turned down job offer same day I was laid off.
Got much better job offer by being confident and patient.

Money made by being patient allowed me to get to the point of making many more good (and some bad) decisions with the money I made holding out for a better option.
SevenBridgesRoad
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Re: What is the best financial decision you ever made?

Post by SevenBridgesRoad »

FrugalInvestor wrote: Mon Jun 29, 2020 12:38 pm
Sheepdog wrote: Mon Jun 29, 2020 11:24 am
FrugalInvestor wrote: Mon Jun 29, 2020 11:10 am I married a person with similar attitudes toward saving and spending which happen to be consistent with the Boglehead philosophy. I have been very fortunate in many ways.
I was just going to submit my good fortune....great fortune.....of finding my wife on a blind date 60 years ago, to whom I fell deeply in love with and who has kept me in line on finances and everything else. Then I found that you already beat me to it so I hope you don't mind that I tag along.
Weren't we fortunate?

(Now, I've got to think what am I going to do for her on our 60th next New Years Eve.)
It sounds like you beat me to it by quite a few years. Hopefully I can continue to follow your example. Congrats on your upcoming 60th!
A recurring theme. We should place the responses into categories. I'll bet marrying the right person is number 1.
For me:
1) Marrying the right person and staying married.
2) MD degree. High earnings made it easier to overcome mistakes.
3) Reading Die Broke and getting serious about the Pay Cash chapter.
4) Learning from Boglesheads Forum and Wiki
dewey
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Re: What is the best financial decision you ever made?

Post by dewey »

I committed to maximizing my investment contributions fairly early on...each raise would simply increase my taxable mutual fund investments since I always maxed my 401 and Roth. But...I didn't know anything about investing--and neither did most of the people I queried during those years. I made some rookie mistakes (selling scared, buying high).

Then I discovered Vanguard and soon after that John Bogle and then this group. I educated myself as a result and follow simple low cost index investing with occasional re-balance. And the real key for me over the years--STAY THE COURSE.

So I link the key decision points (save/invest as much as possible) (simple index investing) (stay the course with your plan).

But my biggest debt is to Mr. Bogle and this group. A game changer.
“The only freedom that is of enduring importance is freedom of intelligence…” John Dewey
Mrvtmn
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Re: What is the best financial decision you ever made?

Post by Mrvtmn »

To open a 2nd checking account, deposit a certain percentage out of every check and donate it to charities.
friar1610
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Re: What is the best financial decision you ever made?

Post by friar1610 »

Silverado wrote: Mon Jun 29, 2020 11:54 am Oddly enough, the best is pretty close to almost being the worst: Started investing as a brand new 2LT in the Army. That developed a habit that has stayed for the last 27 years.

A lot of folks can likely guess why it is also close to being the worst...that early investing was with USPA&IRA. Moved that IRA over to TRP after about six years, then to Vanguard three years ago. It’s grown into six figures over the years, and I am very pleased with how it ended up, and will never play what if about those early 'Sales and Creation' charges of 50% for the first year, then 5.75% after that. With the IRA limit of $2000 at the time, I blew more than that on beer in those days.
Navy guy here. I too started out with USPA&IRA (now First Command) and also got screwed with the front-loaded, high-commission Fidelity Destiny fund. But, I do credit them with getting me in the habit of investing regularly and increasing my monthly investment when I got a raise or promotion. (I never fell for their insurance pitch). Also Destiny performed fairly well during my time with it and it helped me with kids' college tuition. The reality check is thinking what I would have had if I'd invested the same money in the VG S&P 500 fund, but can't walk that dog back. Of course, I would have nothing to do with them now and often tell military posters on this site to avoid them like the plague.

Disclosure: we Navy guys drank our share of beer too. :sharebeer
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bogledogle
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Re: What is the best financial decision you ever made?

Post by bogledogle »

The best financial decision I made was to keep learning to make better financial decisions in life. It's a tough decision and I screw up execution all the time, but still the best decision ever made. :sharebeer
Olemiss540
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Re: What is the best financial decision you ever made?

Post by Olemiss540 »

Dave Ramsey.

Was under some huge pile of debt, but his message of living below your means resonated. That message led me into savings, which led me into investing, which led me into Bogleheads, which led me into success (so far).
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.
Swansea
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Re: What is the best financial decision you ever made?

Post by Swansea »

Opening an IRA with 2K in the early 80s, which got me interested in investing.
flaccidsteele
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Re: What is the best financial decision you ever made?

Post by flaccidsteele »

tvubpwcisla wrote: Mon Jun 29, 2020 7:29 am For me, so far, it has been to Max out my 401K every year.

:moneybag
1. I avoided buying tech stocks while working in tech during the dot com boom

2. I purchased rental real estate during the US housing crash and replaced my household income

3. I stayed invested in Berkshire Hathaway since the 1990s and a US index after the tech wreck

4. I bought stock during the dot com crash and credit crisis
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
aristotelian
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Re: What is the best financial decision you ever made?

Post by aristotelian »

Best frugal purchase: 1992 Camry bought in 2007 for $1600, drove for five years.

Best move to reduce taxes: started maxing 401k.

Best move to break fee of professional finance industry: fired financial advisor for my kids' inheritance. His firm charged 1.5% AUM fee plus put them in a custom "stock picker" account that charged another 1%. All told he was scraping about $50K annually off the top of the portfolio.

Worst decision: purchasing an old home. Total money pit.
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vitaflo
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Re: What is the best financial decision you ever made?

Post by vitaflo »

Starting my own business. Income went up 4x, cost of living stayed the same. Will retire ~20 years sooner than I otherwise would have.
Exafchick
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Re: What is the best financial decision you ever made?

Post by Exafchick »

After my divorce I realized I needed to be able to support myself alone, bought "Personal Finance for Dummies" and heeded the advice. Now I own my own home (with a low interest mortgage), have an emergency fund, 401k and Roth IRA, pension, LTC insurance, no debt (besides mortgage), pay off credit cards every month and feel prepared that I will have a financially stable retirement when I decide to leave the work force.
pahkcah
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Re: What is the best financial decision you ever made?

Post by pahkcah »

Although I could have earned a higher starting salary in private industry, chose to work for the Federal Government in the hopes that I would someday receive a pension under the Civil Service Retirement System (CSRS). The first of every month I am very happy with the decision made over 40 years ago. DW also worked her entire career for the Federal Government and receives a CSRS pension. All of our financial needs are covered by the pensions, which allows us to be more aggressive with our investment choices.

From an investment perspective, finding the Bogleheads' site and following advice provided by many of you. The advice not only helped DW and me to make sound investment decisions, it has also been of immense benefit to our children. Thank you, everyone!
flaccidsteele
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Re: What is the best financial decision you ever made?

Post by flaccidsteele »

Retired in my 40s because I was lucky to start reading Warren Buffett’s writings in the 90s when I was in my 20s and followed his advice to “be fearful when others are greedy and greedy when others are fearful”. Back then I had no idea Life would be giving me so many opportunities (dot com crash, US housing meltdown, and credit crisis) to be financially free
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
Van
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Re: What is the best financial decision you ever made?

Post by Van »

Deciding to sacrifice some fun during my youth to get a really good education (PhD in a a medical field). Nine years of undergraduate and graduate school, followed by a couple of years of postdoc studies. But it payed off financially more than I could have imagined.
Chant
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Re: What is the best financial decision you ever made?

Post by Chant »

For me, it was definitely to become debt free (except mortgage) some 25 years ago - and staying that way.
InvestorP
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Re: What is the best financial decision you ever made?

Post by InvestorP »

I moved within walking distance from work and got rid of my car which allowed me to save and invest.
mak1277
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Re: What is the best financial decision you ever made?

Post by mak1277 »

My spouse has been a big driver of our family's financial success. But marrying them was never a financial decision so I'm not about to count that.

Frankly, most of my net worth was based on dumb luck too...I joined my current employer at a good time in terms of their stock price and got rich.

So, yeah, I don't think any of the decisions I've made that were purely "financial decisions" have had any impact on where I stand financially today.
mptfan
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Re: What is the best financial decision you ever made?

Post by mptfan »

birnhamwood wrote: Mon Jun 29, 2020 10:56 am Bought the family farm.
How can you post if you're dead?
:wink:
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willthrill81
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Re: What is the best financial decision you ever made?

Post by willthrill81 »

tvubpwcisla wrote: Mon Jun 29, 2020 7:29 am For me, so far, it has been to Max out my 401K every year.

:moneybag
As far as the data and math go, the single most important financial decision you'll ever make pertains to your choice of career as it directly impacts your lifetime income.

After that is your saving rate.

After that is your AA.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Bobby206
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Re: What is the best financial decision you ever made?

Post by Bobby206 »

Staying in a house that was slightly too small and never moving for 20'ish years has been a good one for us. I have seen others move multiple times which always costs money. I have seen others in to big of a house which costs money and then they want to downsize when the kids leave. Our house was a touch small at moments but overall has been just right. I should add that the house was on the expensive side of our budget when we bought it but, within a few years, we were living way below our budget so it worked out perfect!
palaheel
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Re: What is the best financial decision you ever made?

Post by palaheel »

Starting to invest at all. My family were "bank saving account" people. I decided to buy a mutual fund (Wellington, I think).
Markets crash. Markets recover. Inflation takes your money FOREVER.
UnLearnYourself
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Re: What is the best financial decision you ever made?

Post by UnLearnYourself »

Buying and living in a 3-family for my first home, and renting 2 units out.

Has allowed me the flexibility to max my 401k, roth, HSA, and a couple 529s all while living a good lifestyle and facilitating my wife's ability to stay at home with our two girls and not work for a few years. I likely couldn't have had all this at my current income level in a comparably priced single family. So it has really turned out to be a great keystone in our financial mix.
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shmidds
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Re: What is the best financial decision you ever made?

Post by shmidds »

Spending $27.95 on William Bernstein’s “The Four Pillars of Investing.”
Tdubs
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Re: What is the best financial decision you ever made?

Post by Tdubs »

If I'm going to be honest, it was my very un-Bogglehead investment decision to buy Harley Davidson back around 1991, and I then repeated my luck by dumping it in the mid 2000s. I realized that winning the lottery is no argument to keep playing.
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willthrill81
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Re: What is the best financial decision you ever made?

Post by willthrill81 »

Bobby206 wrote: Mon Jun 29, 2020 3:34 pm Staying in a house that was slightly too small and never moving for 20'ish years has been a good one for us. I have seen others move multiple times which always costs money. I have seen others in to big of a house which costs money and then they want to downsize when the kids leave. Our house was a touch small at moments but overall has been just right. I should add that the house was on the expensive side of our budget when we bought it but, within a few years, we were living way below our budget so it worked out perfect!
Considering that housing is most Americans' single largest expense (~30%), cutting that significantly and investing the difference would be enough for tens of millions of households to get on solid financial footing. It certainly worked for us.

Our family of three lives very comfortable in a 3/2 home with 1,200 sq. ft. that we own outright. Most of our friends are up sizing houses every few years, getting bigger and bigger houses with bigger and bigger mortgages, property taxes, utilities, maintenance, etc. I really don't know if they will ever live in a home that they own outright.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
mptfan
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Re: What is the best financial decision you ever made?

Post by mptfan »

willthrill81 wrote: Mon Jun 29, 2020 4:12 pm Our family of three lives very comfortable in a 3/2 home with 1,200 sq. ft. that we own outright. Most of our friends are up sizing houses every few years, getting bigger and bigger houses with bigger and bigger mortgages, property taxes, utilities, maintenance, etc. I really don't know if they will ever live in a home that they own outright.
I agree.
fourwheelcycle
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Re: What is the best financial decision you ever made?

Post by fourwheelcycle »

Marrying my wife. We had fortunate careers we enjoyed, we are both naturally modest spenders, and we saved the rest.

Second best decision, giving up on individual stocks and bonds and switching to VTSAX and VBILX.
02nz
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Re: What is the best financial decision you ever made?

Post by 02nz »

mptfan wrote: Mon Jun 29, 2020 4:15 pm
willthrill81 wrote: Mon Jun 29, 2020 4:12 pm Our family of three lives very comfortable in a 3/2 home with 1,200 sq. ft. that we own outright. Most of our friends are up sizing houses every few years, getting bigger and bigger houses with bigger and bigger mortgages, property taxes, utilities, maintenance, etc. I really don't know if they will ever live in a home that they own outright.
I agree.
I do as well, and that really applies to other material aspects of life as well, e.g. cars. No need to scrimp on everything, but constant upsizing and keeping up with the Joneses is bad financially (and in other ways, too).
Rus In Urbe
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Re: What is the best financial decision you ever made?

Post by Rus In Urbe »

*
Amicable Divorce.

And marrying a partner with the same values (one of them, frugality)!

Life is easy and wonderful with the right partner.

It makes ALL the difference in your finances too because you can enjoy every moment (even moments that cost absolutely nothing.

23 years of utter bliss....
I'd like to live as a poor man with lots of money. ~Pablo Picasso
62nc
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Re: What is the best financial decision you ever made?

Post by 62nc »

Applying for a scholarship that I later received (full ride). No debt out of college.

Marrying a generally frugal partner.

Living on one of our salaries, saving the other for house down payment/equity. When she changed jobs or stopped for parenting needs it didn’t generally affect us day to day.

Buying way less than what we needed.

YNAB.

Avoiding most debt (still had occasional car payment).


Biggest mistake? Waiting too long to max out Roth and 401k (mid 30s).
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