Best decision(s) in your financial life

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
dburkes
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Re: Best decision(s) in your financial life

Post by dburkes »

Buying a house in San Francisco in 1999. The market was crazy then, and I paid 20% over asking, and I thought at the time that it was the worst decision in my financial life. I was wrong.
mr_brightside
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Re: Best decision(s) in your financial life

Post by mr_brightside »

long healthy marriage to a spouse with compatible financial traits

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mr_brightside
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Re: Best decision(s) in your financial life

Post by mr_brightside »

double post -- my apologies

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Last edited by mr_brightside on Thu Dec 02, 2021 3:31 pm, edited 1 time in total.
KESP
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Re: Best decision(s) in your financial life

Post by KESP »

sorethumb wrote: Tue Nov 30, 2021 12:16 am Ask me in 2036, if the good Lord's willing and the creek don't rise.
That was my father’s favorite saying. It warmed my heart to hear (see) someone else say this. :D
Our best decision in our financial life was not withdrawing from my 401k to buy a new house. We lived in a poor town with a low performing school system. In a panic, we started looking at houses in a more expensive town with better schools. Amazingly, it was my realtor who said don’t do it. We stayed, our kids did fantastic in school, one got free college tuition for being valedictorian, the other got half tuition paid, both graduated from the honors program at our state university and are succeeding in “adulting.” In the meantime, we paid our house off well before retirement and our small ranch is perfect for my husband who has Parkinson’s. We are enjoying a comfortable retirement.
Justmc
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Re: Best decision(s) in your financial life

Post by Justmc »

Refinancing my home from a 30 year mortgage to a Bi-Weekly mortgage. It dropped it to about 17yrs and saved over 100k in interest .. FYI, not the same as sending more to principal. it works by borrowing money on 14 day cycles vs monthly . A unique instrument that I have not seen since the 90's.
DataFientist
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Re: Best decision(s) in your financial life

Post by DataFientist »

Contributing to retirement accounts as soon as I started my first "real" full-time job. It has become second nature / instinctual to save before spending. Now, I set the savings rate I want to hit and spend my money guilt-free.
ColoradoRick
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Re: Best decision(s) in your financial life

Post by ColoradoRick »

1). Go heavy to Vanguard S&P 500 and get out of foreign/emerging Vanguard mutual funds 10 years ago.
2). Get wife really excited about the stock market by giving her a bonus every January.

I should add though that my wife is really astute about business and understands financial concepts.
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peskypesky
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Re: Best decision(s) in your financial life

Post by peskypesky »

1. Followed the advice of my boss and joined my company's 401k. He really pressured me to do it, and I am eternally grateful.
2. Used the internet to educate myself about stocks, bonds, fees, index funds, John Bogle, etc
4. Lived below my means, tried to max out 401k contributions as much as possible (not always easy to do when you live in NYC)
5. After experimenting with various mutual funds, various cap sizes, emerging market, international, etc, I settled on Fidelity S&P 500 index and put most of my investment into that.
6. Never got married or had children
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markjk
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Re: Best decision(s) in your financial life

Post by markjk »

Action and simplification ....

1.) Started contributing to 401k on day one of my first "real job" after college
2.) Eventually opening a brokerage account for after tax money - got over inital fear of "the market" with non-retirement money and moved a portion of savings account money into index funds
3.) Consolidating accounts - now only have 4 accounts total for all retirement and after-tax money for both myself and my spouse; easy to manage
4.) Staying the course - setting an AA and philosophy and sticking with it for 15 years or so and counting. A few bumps and panics in the road early on but overall, kept it all under control
fishnhunt
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Re: Best decision(s) in your financial life

Post by fishnhunt »

Elsebet wrote: Wed Dec 01, 2021 4:12 pm At my first full-time IT job at the tender age of 22, my cube neighbor gave me 2 pieces of advice I followed:

- don't have kids
- put 20% of your income into your 401k and leave it alone

At age 32 a different cube neighbor told me to open a Roth IRA and fund it, which I did.

I am glad I listened to that advice from people older and wiser than me.
Obviously kids are expensive and can hinder your ability to save/ retire early. But they provide an emotional return that cannot be defined on paper. I hope there were other reasons taken into consideration for this decision and you didn't blindly listen to your cube neighbor.
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Elsebet
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Re: Best decision(s) in your financial life

Post by Elsebet »

fishnhunt wrote: Fri Dec 03, 2021 9:18 am
Elsebet wrote: Wed Dec 01, 2021 4:12 pm At my first full-time IT job at the tender age of 22, my cube neighbor gave me 2 pieces of advice I followed:

- don't have kids
- put 20% of your income into your 401k and leave it alone

At age 32 a different cube neighbor told me to open a Roth IRA and fund it, which I did.

I am glad I listened to that advice from people older and wiser than me.
Obviously kids are expensive and can hinder your ability to save/ retire early. But they provide an emotional return that cannot be defined on paper. I hope there were other reasons taken into consideration for this decision and you didn't blindly listen to your cube neighbor.
Yes, of course there were plenty of other risk considerations in my case:

- environmental (I'm adding to the population, is that wise?)
- moral (is it moral to bring a life into what is often a difficult existence?)
- societal (am I just responding to societal norms/pressure or do I really want this?)
- personal (will I make a good parent? I was born late and almost all of my relatives are old/gone already - we would be on our own)
- financial (can I afford in time and money to pay for a child if they have major issues?)

I never had a maternal instinct so all of these were easy answers. My husband doesn't want children until we can retire and spend all of our energy on them instead of work, but we realize age 55 it will probably be too late for most adoption agencies we could afford. Having biological children is not an option. So instead we adopt dogs from the shelter and give them the best life possible. :)
"...the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man..." ~Seneca
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LilyFleur
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Re: Best decision(s) in your financial life

Post by LilyFleur »

Finding this forum, in the nick of time.
After entering the two comma club with company stock from an old employer, I learned about age-appropriate allocations here. I sold the stock, invested much more appropriately, and within a year, the stock crashed and still has not recovered.
deltaneutral83
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Re: Best decision(s) in your financial life

Post by deltaneutral83 »

Turtlemilk wrote: Tue Nov 30, 2021 8:48 am
stoptothink wrote: Tue Nov 30, 2021 8:23 am
Turtlemilk wrote: Tue Nov 30, 2021 7:19 am I asked on this forum whether my wife and I could afford a certain house and the responses were overwhelmingly negative. Of course we went against the consensus and pulled the trigger anyway.

We signed up for a $400,000 mortgage (30-year fixed @ 2.625%) one year ago and already our Loan-to-Value Ratio is 67%. We absolutely love the place and since our incomes have increased the mortgage (principal + interest + tax + insurance) only accounts for 28% of our take-home pay. We're also on track for a comfortable retirement... the house will be totally paid off by the time I'm age 62, we'll have around $3 million in a 401(k) assuming an average 7% return, and we're both government employees (two pensions).

Thank God I didn't listen to you guys.
Best financial decision you ever made took place a year ago and hasn't positively affected your financial life :confused Great that you are enjoying the home that some on here said you couldn't afford, but that answer doesn't make sense.
Of course it has. We locked a 2.625% interest rate mortgage (probably will never go that low again) and increased our net worth by hundreds of thousands of dollars. We now have the financial freedom to sell and move elsewhere if needed and we've had great success with our guest bedroom on Airbnb.

The house is in a prime location for tourists (DC area) and traveling nurses (one mile from a hospital), so we can add $400-1000 to our monthly income basically whenever we feel like it. Of course that's not guaranteed but *shrug* it's an option for now. Hell we could even sign a month-to-month lease.
Now, now. BH aren't going to tell someone on a 30 year note to pay 30+% of their gross on PITI (as mentioned now 28% take home with increase in income). It increases the likelihood of problems. If 100 people take out 30 year notes at 30-32% there will be statistically more problems than the group of 100 that have PITI of 25%. I'm not even that big on 25% on a 30 year note, more closer to 20% for my taste. All the advice and is based on the law of large numbers. I can speed 7 mph over the limit but with each mph over I go, the higher the likelihood I get stopped. But I could go 15 over and never see the blue lights.
phxjcc
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Re: Best decision(s) in your financial life

Post by phxjcc »

There was a time that I didn't know anything about anything regarding personal finance. In the UCLA extension class catalogue there was a class (paraphrasing here) titled "Financial Calculator Use for CFP's ". It was basically a class on the HP14C calculator in preparation for the CFP exam.

Learned how to calculate 401k future values based upon a lifetime of monthly contributions on the HP long before the internet calculators existed.

Started me on the path, still remember the "rule of 72". I was astonished, at the time, that it was that easy to figure forward values or backward returns.

Still am.

So for that $20, or whatever the cost was in 1986... that was the best money ever spent.
356Fan
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Re: Best decision(s) in your financial life

Post by 356Fan »

Great question and a lot of interesting responses. No single "best" financial decision, but important ones for me included:

1. Taking an interested in money as a teenager - educating myself. Dad was very open about his financial situation and talked openly with me which helped help my understanding at an early age. I really appreciate that in hindsight.

2. STEM degrees, even though I don't love engineering. It gave me the mental approach to tackle tough problems and the credibility in a space with high-paying jobs. I LOVE history, but knew that likely would be tougher financial path career-wise.

3. Not exactly a financial decision, but I was willing to move to where the best job opportunity was. Staying local would have been easier but likely would have been limiting. I begged friends to join me (in to a place with much better opportunity), but so many were unwilling to uproot or leave their hometown.

4. Taking the course-work for a CFP while overseas. Made me think a lot more holistically about risk and money.

5. Talking calculated risk in terms of job changes. Balanced making job change to expand my skill set, scope of responsibilities, role, and salary while avoiding being seen as a "job-hopper". Sometimes you need to leave the comfortable job to advance your career. That said, I made sure my finances were such that I could take calculated risk. See John Goodman's monologue in The Gambler - https://www.youtube.com/watch?v=XamC7-Pt8N0

6. Negotiating for company equity once in the C-suite. Salary and bonus are nice, but the real upside in in the equity.

7. Boglehead-like approach to investing - regularly investing 20% of my compensation, staying the course, low-cost index funds for the most part, avoiding wealth advisors looking to suck 1+% AUM and give me tickets to box seats at the Avalanche games , LBYM
Last edited by 356Fan on Fri Dec 03, 2021 7:26 pm, edited 1 time in total.
grkmec
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Re: Best decision(s) in your financial life

Post by grkmec »

I got lots -

Married my girlfriend, whom I met when we were both 19 in college, and both poor. Since then she has become a Managing Director at major alternative asset manager.

Bought $50k of Bitcoin in 2014, sold it all December 2017 / January 2017 for 30x return.

Bought $200k of Bitcoin in August 2020, and sold most of it during 2021 for 5x return.

Bought $6mmm of NNN real estate (Sherwin Williams and Dollar General stores) between November 2020 and May 2021 at pre-covid cap rates. Subsequent move in cap rates has doubled my equity.
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corn18
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Re: Best decision(s) in your financial life

Post by corn18 »

Spent 20 years in the military and got a COLA pension and free healthcare for life (well, they just started charging $50/mo for me and my wife).
Consistently sets low goals and fails to achieve them.
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AnnetteLouisan
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Re: Best decision(s) in your financial life

Post by AnnetteLouisan »

A few more: Getting my degrees, paying off my student loans, deciding not to do more debt, deciding to give the luxury handbag trend a miss, giving whole life insurance and other pitches the miss, working to be independent, reading personal finance books and articles in my 20s, being willing to learn new things and work on myself, not settling for lesser jobs or limiting my horizons, living far below my means, learning not to make loans, not investing in anything I didn’t understand, putting up with personalities to the extent necessary, keeping the big picture in mind, and making allowances for human frailties - we all have them. Plus contributing to my pension at work, auto- saving and maxing out 401k and catch-up, FSA.
Last edited by AnnetteLouisan on Sat Dec 04, 2021 8:15 am, edited 3 times in total.
sschullo
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Re: Best decision(s) in your financial life

Post by sschullo »

For this 2nd grade "flunky" and a terrible k12 academic record, I went to college anyway and graduated!
Never in the history of market day-traders’ has the obsession with so much massive, sophisticated, & powerful statistical machinery used by the brightest people on earth with such useless results.
Ron Ronnerson
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Re: Best decision(s) in your financial life

Post by Ron Ronnerson »

The thing that comes to mind is the leveraging of debt. In 2010, we put a $15k down payment on a 4-bedroom/4-bathroom newly-constructed home in a nice neighborhood in the Bay Area. We had a combined gross income of around $120k and a net worth of around $70k when we decided to buy a $500k house with 3% down (we didn't have to pay PMI).

A couple of years later, we refinanced and dropped the rate from 5.25% to 3.25%. We restarted the 30-year clock. Then in 2020, we restated the clock again when we refinanced to another 30-year loan with a rate of 2.875%. In 2021, we did it once again – now at a rate of 2.375% and also took out $150k in equity from the house (the entire amount that we’d paid toward principal over 11 years was taken out). Instead of putting money into paying off the house, we've been steadily investing money into stock market funds over the past decade.

I make around $113k as a teacher and my wife is a stay-at-home parent. 11 years after we bought the house, we have $1m in investments and $700k in home equity, though we owe just as much on the home now as we did when we purchased it. My wife was able to stop working at age 43 and is thinking she is likely retired already (she and I are both 47 now).

On the downside, our home won’t be paid off until we’re in our 70s. However, this is not that big of a deal for us as our retirement expenses should be fully covered by my pension. I'm planning to teach for 33 years (have about 14 left to go) and this results in a pension of $100k/year in current dollars. So maybe teaching for a long career in a district that pays well may be among my best financial decisions too.

On a related note, we're currently loading up on credit card debt at 0% for 15+ months. I'm a huge fan of low-interest debt. Inflation should help make part of the payments.
Lou Sevens
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Re: Best decision(s) in your financial life

Post by Lou Sevens »

the one for me was paying attention to low expense ratios (starting in 2008 with Fidelity's Four in One Index) and learning about minimizing taxes in non-taxable accounts. A second one was finally getting myself a decent portable digital piano 6 years ago for $1,600 vs. spending only $500 in the past- i will get a lot of enjoyment and use out of it.
macheta
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Re: Best decision(s) in your financial life

Post by macheta »

1) My wife
2) Graduating
3) Dollar cost averaging 19% since I was 18
4) Buying a house in 2008
5) Spending time learning about boglehead
DarkMatter731
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Re: Best decision(s) in your financial life

Post by DarkMatter731 »

Mr.BB wrote: Wed Dec 01, 2021 4:26 pm
Elsebet wrote: Wed Dec 01, 2021 4:12 pm At my first full-time IT job at the tender age of 22, my cube neighbor gave me 2 pieces of advice I followed:

- don't have kids
- put 20% of your income into your 401k and leave it alone

At age 32 a different cube neighbor told me to open a Roth IRA and fund it, which I did.

I am glad I listened to that advice from people older and wiser than me.
Give yourself some credit for listening and acting on good advice. I was talking to my friend's kid about 6 months ago, who is about 24. There was an unopened dr. bill on the table, she said she didn't want to deal with it now which got us talking a little about basic finance. I told her I could make her rich in about 35-40 years if she is willing to do just some basic things (you all know what they are). I haven't heard back from her. :oops:
Yes, but compounding is incredibly slow.

If you're in your early 20s, 40 years is a lifetime.

I'm in my early 20s - the way I see it, if you're not going to take risks now, when are you going to take them?

I do have around $100K in SPY but it's painfully slow.

The best decision I've made so far is investing in risky assets that probably shouldn't have increased in value. I took my student loans and put them into the market in April of 2020 when the model I'm running told me too.
ROIGuy
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Re: Best decision(s) in your financial life

Post by ROIGuy »

DarkMatter731 wrote: Fri Dec 03, 2021 10:44 pm
Mr.BB wrote: Wed Dec 01, 2021 4:26 pm
Elsebet wrote: Wed Dec 01, 2021 4:12 pm At my first full-time IT job at the tender age of 22, my cube neighbor gave me 2 pieces of advice I followed:

- don't have kids
- put 20% of your income into your 401k and leave it alone

At age 32 a different cube neighbor told me to open a Roth IRA and fund it, which I did.

I am glad I listened to that advice from people older and wiser than me.
Give yourself some credit for listening and acting on good advice. I was talking to my friend's kid about 6 months ago, who is about 24. There was an unopened dr. bill on the table, she said she didn't want to deal with it now which got us talking a little about basic finance. I told her I could make her rich in about 35-40 years if she is willing to do just some basic things (you all know what they are). I haven't heard back from her. :oops:
Yes, but compounding is incredibly slow.

If you're in your early 20s, 40 years is a lifetime.

I'm in my early 20s - the way I see it, if you're not going to take risks now, when are you going to take them?

I do have around $100K in SPY but it's painfully slow.

The best decision I've made so far is investing in risky assets that probably shouldn't have increased in value. I took my student loans and put them into the market in April of 2020 when the model I'm running told me too.
Your right it does take many years. Much depends on your income, but they could put 100% into a Total Market index fund for the next15-20 years before they even starts with bonds. It only seems painfully slow because your on the starting line :-)
I'll bet if you polled most people here who are 60 and older and you told them they could go back to their early 20's and understanding what they know now, they would simply just put their savings/work contributions into a low expense total market fund and not look at it for another 25 years.
Last edited by ROIGuy on Sat Dec 04, 2021 9:23 am, edited 1 time in total.
RockyR
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Re: Best decision(s) in your financial life

Post by RockyR »

For my Mom it was signing up for Social Security 65 years ago. She was a school teacher and it was optional then. She asked her principal and he recommended signing up. She did and her generation was not subject to the windfall elimination provision. She retired 22 years ago, and social security provides 35% of her income (she has pension and annuity). The income from social security is growing as a percentage because of inflation indexing.
trueson1
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Re: Best decision(s) in your financial life

Post by trueson1 »

1. Pay yourself first.
a. Put savings on auto pilot
b. Max out 401k every year
c. Mega backdoor Roth

2. Stay out of debt
EnjoyIt
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Re: Best decision(s) in your financial life

Post by EnjoyIt »

Best decision:

Once out of grad school, we barely increased out spending and built up wealth early. This lead to early financial independence and gave us flexibility and a very comfortable life today. If I can give one piece of advice is to strive for early financial independence. It will buy you freedom.
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capran
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Re: Best decision(s) in your financial life

Post by capran »

EnjoyIt wrote: Sat Dec 04, 2021 10:42 am Best decision:

Once out of grad school, we barely increased out spending and built up wealth early. This lead to early financial independence and gave us flexibility and a very comfortable life today. If I can give one piece of advice is to strive for early financial independence. It will buy you freedom.
We did something similar. We called it a "budget freeze". We both started off earning $649 per month each at a group home WITH our bachelor's degrees in 77! Worked there until I finished my masters and first job with my MS started me off at 18k so spouse could devote to school full time. Once she entered the workforce with her MSW a few years later, we were making a combined 45k, which at the time seemed like a lot. We kept our expenditures the same and applied the excess first to debt and then toward savings. Years later we edged up on nicer homes but paid them off quickly. It sure did bring freedom!
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pahkcah
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Re: Best decision(s) in your financial life

Post by pahkcah »

Decided to work for Federal Government instead of taking a private position. I'm conservative by nature and liked the idea of a guaranteed pension. DW also worked her entire career for the Federal Government. The decision has turned out well, we are both receiving COLA'd pensions under the old Civil Service Retirement System (CSRS). We were also able to retain our health insurance, paying the same rates as when we were employed.

Second decision was finding and bookmarking the Bogleheads' site quite a few years ago. I owe a lot of thanks those who have contributed considerable knowledge and experience to the likes of me.
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