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

Post by millenialsaver » Mon Jun 29, 2020 4:55 pm

I'm still young (27) and far from my financial goals, but feel confident that the steps I'm already taking are setting me up well for success.

So to answer the question, i) create and follow a budget in order to have a strong (even if just high-level) idea of how much I should be saving/spending, ii) max out all retirement options (401k, IRA, HSA), iii) learn to become less materialistic, and, obviously, iv) live well below my means.

Thanks to all on BH for the help so far.

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

Post by plog » Mon Jun 29, 2020 5:23 pm

My early Investment in rubber(s).

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

Post by HawkeyePierce » Mon Jun 29, 2020 5:27 pm

Landing in a career that lets me save $150k a year. Everything else after that is noise.

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

Post by Redlion » Mon Jun 29, 2020 5:28 pm

Never got married :D

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

Post by UpperNwGuy » Mon Jun 29, 2020 5:29 pm

To get out of debt.

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One Ping
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Re: What is the best financial decision you ever made?

Post by One Ping » Mon Jun 29, 2020 5:37 pm

Several actually ...

1) Investing early on in taxable and TIRAs (when they generally became available) (1982)
2) Maxing 401k when it became available (1984)
2) Marrying someone with a similar financial mindset (1987)
3) Being too busy with work/career to notice my first bear market until it was over (1987) - not really a decision, sort of a non-decision, but still ...
4) Strangely enough, going to several financial education seminars given by an AUM financial advisor that got me interested in how to construct a portfolio (diversification, indexes, buy&hold) (2003)

If I had to pick one (or two) it would be 1) and 3) above.

It's been a wild ride. Allowed me to retire early when I decided I'd had enough.
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Life Is Good
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Re: What is the best financial decision you ever made?

Post by Life Is Good » Mon Jun 29, 2020 6:26 pm

When I got my first job and had to fill out the paperwork for insurance and benefits. Everyone in my new hire group opted out of the 401k. I was 22 and had no idea so I put 15%. Brilliant. I wish I put 20.

Today, twenty years later at the same company, it's at 13% but only because my income prevents me from putting any more.

That, and I married well. My wife is more frugal than I.

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

Post by whodidntante » Mon Jun 29, 2020 6:37 pm

Several good ones.

Spent most of my life driving hoopties that I repair myself.

Started treating Dave Ramsey as an entertainer instead of a financial authority.

Was correctly nervous about the market and didn't buy too much house in 2005.

Got divorced when it was expensive, but before it got finance reset expensive.

Dumped tax-inefficent, expensive active funds once I realized they just kind of trailed, went down as much or more in down markets, and cost more.

Overcame leverage aversion.

Started maxing a 401k, HSA, and backdoor Roth every year.

Was able to earn more than I ever thought I would. Imposter syndrome and whatnot.

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

Post by galving » Mon Jun 29, 2020 6:43 pm

Getting married to another engineer!
Smart, disciplined, and not afraid to commit to a long term plan.
We've lived within our means, and been very blessed.

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

Post by geerhardusvos » Mon Jun 29, 2020 6:45 pm

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

:moneybag
VTSAX and chill early and often has been good to us

That and having a great spouse and ability to learn and be flexible. Marriage has definitely helped our ability to build wealth
VTSAX and chill

rich126
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Re: What is the best financial decision you ever made?

Post by rich126 » Mon Jun 29, 2020 6:48 pm

Having money deducted/invested directly from my pay. If it doesn't go into my banking account, I will rarely spend it (i.e., what you don't see, you don't spend).

And maybe avoiding swinging for the big win. I don't mind taking calculated gambles (unlike many here) but I am careful that the damages are controllable and not severe.

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

Post by sschullo » Mon Jun 29, 2020 6:51 pm

winterfan wrote:
Mon Jun 29, 2020 7:43 am
Getting married to a frugal person. Two incomes are a great way to build wealth, especially before the kids arrive. It's easier to gather a down payment for a house, pay off debt faster or get retirement savings built up early. Even is someone later stays home with the kids, you have that money tucked away early that can grow.
+1
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DetroitRick
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Re: What is the best financial decision you ever made?

Post by DetroitRick » Mon Jun 29, 2020 7:07 pm

Getting the specific business degrees that I got (BBA Finance, MBA International Business), at the right time from the right places, and then being able to put those foundations to good use. Helped me both directly and indirectly, and ultimately facilitated early retirement. The dual aspect also allowed me to prosper during several downturns and company cutbacks - by taking laterals and promotions into very different fields. Saved my tail a few times.

I like to joke that I could have just watched the movie Office Space a few more times instead (less work), but in the end, it did really work out.

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

Post by coynerone » Mon Jun 29, 2020 7:08 pm

Two things.

Buying as much boarded up rental property as we could when the naval base closed and the city experienced a great depression. Then investing sweat equity.

Confronting our spousal differences on money and spending by starting to have financial meetings regularly. At first we blew out at about 20 minutes but eventually our persistence resulted in figuring out who was good at what and then each of us could shine.

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

Post by Montgomery » Mon Jun 29, 2020 7:10 pm

Living below my means for a long time.

If I can have a second pop at the question- that day I sold my shares of Janus Fund and accepted low cost index funds were going to make me a lot more money.

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

Post by Thales » Mon Jun 29, 2020 7:15 pm

My wife. We met fifty years ago.

Not returning to work after a nasty experience and learning about investment instead.

We are now wealthy, healthy and wise.

Thank you everybody who has helped us.

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Taylor Larimore
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Re: What is the best financial decision you ever made?

Post by Taylor Larimore » Mon Jun 29, 2020 7:27 pm

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

:moneybag
moneybag:

For me, our best financial decision was moving all our securities from Merrill Lynch to Vanguard in 1986.

Thank you, Jack!

Best wishes
Taylor
Jack Bogle's Words of Wisdom: "We must seek an investment sector in which the culture of stewardship and longer-term thinking dominates a culture of speculation, short-term trading, salesmanship and marketing."
"Simplicity is the master key to financial success." -- Jack Bogle

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

Post by Rajsx » Mon Jun 29, 2020 7:30 pm

Looking back, not one but multiple good decisions in our case -

1) Sticking to Vanguard Index Funds & Fidelity for Investments, no individual stocks & no active trading.

2) Maxed out Retirement Plans

3) Automatic Monthly Savings to Vanguard Taxable accounts.

4) Started a Enterprise with no Partners

5) Purchased a Disability Insurance Policy & a Term Life vs Full Life Insurance

6) Paid Off Mortgages soon as possible, Credit Card payed in total monthly, no other debt

7) I & DW have a frugal outlook, both immigrants came to US with $500 & now are Flagship Select

8) 529 Plans for kids education, both launched well.

9) Majority of my learning from Bogleheads.org
We do not stop laughing because we grow old, we grow old because we stop laughing !!

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

Post by heyyou » Mon Jun 29, 2020 7:45 pm

Still in my 20s, I decided that my car was good enough, residence was good enough, hobby items were good enough, so I could then save more from my paychecks. I had flunked consumerism, so I then had the money to max my 401k earlier each year with the overflow going into taxable savings. It became a challenge to boost my total annual savings each year.

From age 25, I could see that I needed a job only until I had enough self generated income. By age 30, I had made enough of the greedy, rookie mistakes that I was committed to indexing. The starting point was accepting the adequacy of my possessions instead of constantly upgrading them as my income increased. Yes, I married the right person who was on the same page. Our continued saving was a higher priority than the very ephemeral pleasure of replacing an adequate item with a newer, perhaps larger, more shiny one.

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

Post by snackdog » Mon Jun 29, 2020 8:01 pm

There is generally no single easy answer or decision; it is lifelong education, decision making, learning and improving. It helps to make mistakes early and learn from them. The most important financial decisions can be those that avoid disaster. High interest debt, spendypants ways and families, legal risks, market timing, crazy people and more can all lead to disaster.

austin757
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Re: What is the best financial decision you ever made?

Post by austin757 » Mon Jun 29, 2020 8:12 pm

I'm still pretty early on in my investing and working life, so it's hard for be to pick the one I think is best. Probably staying the course and ignoring those urging me to sell when the market is down. Investing the Boglehead way would be a close second.

Now someone should make a "Worst Financial Decision" thread. I have a few for that one :D

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

Post by helloeveryone » Mon Jun 29, 2020 8:30 pm

I would say our most important financial decision was that when we set absolute max dollar amount for our 2nd home (family outgrew the first home), when we calculate monthly cost at the time we bought it the mortage, taxes, and insurance was 17% of our gross income.

This looking back has helped us maximize retirement savings without financial stress so far. (ten years out now and so far so good. Making several extra payments per year) The price point we set was based on the absolute price of the home and looking back I’m glad that’s how we did our home search rather than getting a realtor to tell us how much we could “afford”

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

Post by goodenyou » Mon Jun 29, 2020 8:38 pm

I married a frugal, hard-working professional who is also highly compensated. We lived way below our means.

I moved for geographic arbitrage with additional investment opportunity that was very unique.

I found Vanguard and Jack Bogle 20 years ago and Bogleheads more than 10 years ago.
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

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Rowan Oak
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Re: What is the best financial decision you ever made?

Post by Rowan Oak » Mon Jun 29, 2020 9:02 pm

Making my big investing mistakes when I was still young and having the sense to learn from them.
Last edited by Rowan Oak on Mon Jun 29, 2020 9:27 pm, edited 1 time in total.
“If you can get good at destroying your own wrong ideas, that is a great gift.” – Charlie Munger

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

Post by McJammer » Mon Jun 29, 2020 9:06 pm

Buying, reading and actually applying the tips and advice in one of those "self-help" financial books titled something like "Financial Tips in your 20s"

Oh and not my decision, but my Dad's . . . lucky enough that he paid for college. So blessed. My job and hubby and I paid for my grad school though!

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

Post by protagonist » Mon Jun 29, 2020 9:38 pm

Second worst short term financial decision- getting divorced 12 years ago, right before the crash.
Best long term financial decision - getting divorced 12 years ago.
Second best- staying out of debt.

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

Post by travelspot » Mon Jun 29, 2020 11:33 pm

Max out retirement accounts early, get/stay out of debt, invest more instead of lifestyle creep, and marry a like-minded spouse. A winning formula, and a common theme on this forum.
If you don't do stuff, then you don't do stuff.

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

Post by LorieBH » Tue Jun 30, 2020 12:35 am

Budgeting.

Having a plan for my income, and sticking to that plan, made all the difference for me. Best financial decision I ever made.

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

Post by quadog » Tue Jun 30, 2020 12:38 am

Buying a condo in San Francisco in 2004 and selling in 2014. You just need one buyer to come in way over the other bids. In my case it was a six figure outlier. That was a good day.

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

Post by Derpalator » Tue Jun 30, 2020 4:43 am

:thumbsup :D
RetiredNewbie wrote:
Mon Jun 29, 2020 8:14 am
The best financial decision I ever made was to start lurking in this group.
:thumbsup

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

Post by hoffse » Tue Jun 30, 2020 5:05 am

Convincing my law firm to pay for my tax LLM (this was before having kids). I busted my butt for a few years practicing law during the day and going to school at night. We structured it in a way that was a tax-free benefit for me, and I actually made a little money on the whole thing by running tuition payments through a 529 and leveraging credit card sign up bonuses (the school I went to did not charge a fee to pay by credit card).

Now they can bill me out at a higher rate than most other attorneys with a similar number of years of experience. This has turned into a pretty sweet, almost-part-time schedule that pays more than $200k per year, and they still partnered me on time. At this point I generally work from about 8-3 and rarely on the nights or weekends unless a deal is closing (pandemic hours being a little different of course).

My next crusade is going to be teleworking, because I have discovered I really enjoy working in yoga pants. I don’t miss the office at all, and most of my clients aren’t local so it’s just wasted overhead to maintain an office for me.

The other best financial move I made was marrying another lawyer who is, quite frankly, brilliant at business development. That will pay off in spades as our careers develop. He also intentionally picked a recession-proof practice (bankruptcy), specifically so that he would be one of the most valuable players on the team whenever the firm is trying to cut expenses. He is a high earner too, and is happy to let me steer the family finances.

sharp1aarohead
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Re: What is the best financial decision you ever made?

Post by sharp1aarohead » Tue Jun 30, 2020 5:44 am

I have a different take on it than most, I suspect.
I’m a high school educator and I was making 37,000 11 years ago. In 2020, I should make more than 170,000 in the same job. The only difference I that now I pay no taxes and I don’t pay rent.
So...my best decisions...
1. Move overseas - accelerated earnings, housing allowance and foreign income exclusions rock.
2. Invested in real estate. This year I have made 65k flipping real estate in the us. That required, maybe, 150 hours of work.
3. Deciding I could still do my job and find a way to bring in extra dollarsWith a side hustle .

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Harry Livermore
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Re: What is the best financial decision you ever made?

Post by Harry Livermore » Tue Jun 30, 2020 5:56 am

I'm not sure any one decision can stand out enough to be the "best". But in no particular order:

deciding to automate contributions, both to VG and to individual company DRIPs.
asking my wife to marry me.
purchasing a small, cheap house in an amazing location in a high quality town.
starting an IRA.
starting a SEP-IRA.
starting my small-company pension plan.
getting over the "new car smell" and buying quality, lightly used cars.
purchasing income-producing equipment for my business.
strategically doing Roth conversions.
learning various home-repair skills (electric, plumbing, others)
deciding to forego various home services and DIY (lawn, pest control, trash)
starting, and staying committed to, the kids' Coverdells and 529s.
lurking on Bogleheads.
being open to work projects to which others in my field turn up their noses.
keeping our SFH as a rental.
Prior to automation, diligently sending in $100 per month to various DRIPs.

Then there are innumerable small choices and habits. For example, I have an iPhone 6, purchased when the 7 or 8 was the current model, can't remember. You're at the Apple store, and there is a descending line of phones: the biggest/ newest, the newest, the biggest one-model-back, etc. All the way at the end of the line is the model that's already a generation or two old. It's half the price, or less, than the current model. THAT is the model I traditionally buy. Then I keep it for a long time. Millions of people buy a new phone twice a year at $800+ each. That does not compute for me.
I'm lucky in that I have always been interested in personal finance and investing. As a kid, I used to watch Wall $treet Week with my dad. Early on in college and as a young adult, I read a few key books by Ben Graham, Peter Lynch, and Bogle. I read some trashy booklet from a financial "advisor" in a quick oil change waiting room. I was probably 19. The contents are lost to me, probably something along the lines of "I can take care of this for you" but there was one nugget, a chart that BH-ers are familiar with: Guy A starts contributing to an IRA at 18, and stops after 10 years. Guy B starts at 28, puts in twice as much as Guy A, and never catches up. I opened an IRA like a week later.
If I was a young person now, I probably would have been inspired reading "If You Can". As a more mature adult, "Millionaire Next Door" resonated when it came out; but by then I was already a frugal dude and already making good decisions, so it was more like uncanny confirmation that I was on a good path (frugal guy, small business founder, wife a teacher, it's like I was a cartoonish version of their archetype)
Anyway...
Cheers
Last edited by Harry Livermore on Tue Jun 30, 2020 6:04 am, edited 1 time in total.

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Harry Livermore
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Re: What is the best financial decision you ever made?

Post by Harry Livermore » Tue Jun 30, 2020 6:00 am

heyyou wrote:
Mon Jun 29, 2020 7:45 pm

I had flunked consumerism,
Ha. Contender for the BH Quote Hall Of Fame.
Me too, I take joy in perfectly good, working consumer items that are not brand new. I am a dropout from Consumerism U.
Cheers

A440
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Re: What is the best financial decision you ever made?

Post by A440 » Tue Jun 30, 2020 7:23 am

I married a frugal woman. :happy
I don't know what the future holds, but I know who holds my future.

New Providence
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Re: What is the best financial decision you ever made?

Post by New Providence » Tue Jun 30, 2020 7:38 am

I think that I became a millionaire because of my heavy investment in myself.

From the day I was a teenager, living on my own, till today, I have never hesitated to spend a lot of my money on IT, books, magazines, tuition, courses, newspapers, movies, etc, etc.

The returns on that investment have been magnificent.

In 1988 on the factory floor I was making $3 an hour and my coworkers were shocked to see my dough gone on magazines and The New York Times.

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

Post by benway » Tue Jun 30, 2020 7:40 am

1. Completing my college degree.
2. Accepting new positions at competing companies for either a substantial raise, promotion or both.

jerryk68
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Re: What is the best financial decision you ever made?

Post by jerryk68 » Tue Jun 30, 2020 8:11 am

The best financial decision for me is reading the BH posts. I don’t read all the posts but scan them and when I see something that interests me I go into research mode checking out the features and benefits of making any changes. Just to name a few changes, I remortgaged my house from 5.75% to 2.75% cutting 5 years off the mortgage, got a 2.5% cash rewards credit card with no extra fees from USAA bank and we cut the cord from Verizon for internet/cable/phone from $259 to $119 a month. These savings are a result of reading this site. Thank you all for taking the time and posting .

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

Post by carolinaman » Tue Jun 30, 2020 8:14 am

Going back to school at night and getting my BS in Accounting. It took 6 years because previous credits were not counted. My wife and I had 2 small children and she did a great job on the Homefront while I was at school and studying. Education paid off as it opened doors for my career I likely would not have got through otherwise.

GFD45
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Re: What is the best financial decision you ever made?

Post by GFD45 » Tue Jun 30, 2020 9:40 am

sheepla wrote:
Mon Jun 29, 2020 8:28 am
YNAB literally changed my direction in handling finances.
This. But, my software was Quicken. Way back........1992

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

Post by cashboy » Tue Jun 30, 2020 9:40 am

work towards (and then achieve) zero debt.


of course, that decision required several smaller ones to support it:
save more;
live within/below my means;
advance my career to earn more;
etc.
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)

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

Post by bltn » Tue Jun 30, 2020 10:18 am

livesoft wrote:
Mon Jun 29, 2020 9:04 am
Picking the right parents living in a decent country. It's been all downhill ever since.

Like many of us, I share this same this same background. But that wasn t one of my financial decisions . More like good luck.

The same with my wife. My wanting to marry her wasn’t t based on finances. But I knew she was smart, and I was lucky she is naturally frugal. Again good luck.

As far as My most beneficial financial decision, when I got my first job at age 15, I decided that I was going to save part of everything I was paid. This continued throughout my career. As a corollary to this decision, when working in my career, I was initially covered by a profit sharing plan that later was converted to a 401k. I didn’t pay attention to these tax deferred set asides in my retirement planning. I continued to save money out of my take home pay as though that was going the be my retirement nest egg. The pension plan money I considered “extra”. That “extra“ turned out to be a nice addition to my retirement pot.

In reflecting on my natural tendency to save, I now realize that saving is more important that the method of investing and planning. Sure personal financial plans and low cost passive investing help maximize returns. But savings rates and the discipline to live below one s means are the basis for financial security for most of us. I m glad that decision came naturally to me. Again, more good luck.

Dnymetssince63
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Re: What is the best financial decision you ever made?

Post by Dnymetssince63 » Tue Jun 30, 2020 10:33 am

I agree with many of the posters, HOWEVER the BEST financial decision...one that added 100s of thousands to our bottom line, was to move from VHCOL Long Island to LCOL with my young family in 1983

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

Post by RDA » Tue Jun 30, 2020 10:40 am

Focusing on my education.

I was fortunate enough to land $250k worth of academic scholarships, and finish a MS with $0 to my name, allowing me to take advantage of the last decade’s returns instead of paying off debt. My education enabled some incredible career opportunities that I would not have had otherwise.

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marti038
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Re: What is the best financial decision you ever made?

Post by marti038 » Tue Jun 30, 2020 10:44 am

1) my marriage (not because I married a rich woman or anything; just someone who shares my philosophy for work, saving, giving, etc.)
2) taking advantage of opportunities to learn new things (not necessarily formal education)
3) starting to save as soon as I could even if it didn't seem like much at the time.

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

Post by sailaway » Tue Jun 30, 2020 10:57 am

Dnymetssince63 wrote:
Tue Jun 30, 2020 10:33 am
I agree with many of the posters, HOWEVER the BEST financial decision...one that added 100s of thousands to our bottom line, was to move from VHCOL Long Island to LCOL with my young family in 1983
Interesting. Our ability to save sky rocketed when moving to VHCOL because the salary increased far more than our actual costs. Now, if we could take this salary to a LCOL...

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

Post by ClevrChico » Tue Jun 30, 2020 11:16 am

The decision with the most financial impact was landing a job at a Megacorp.

That decision alone has at least doubled my net worth. The impact of regular raises, promotion opportunities, a top tier 401k plan, and excellent overall benefits can't be underestimated.

Previous employers were a mid-sized sweat shop and failed startups that had me treading water for a few years.

scrabbler1
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Re: What is the best financial decision you ever made?

Post by scrabbler1 » Tue Jun 30, 2020 11:18 am

While they weren't done for financial reasons, I can say that the two biggest decisions which impacted me financially positively were:

(1) Being childfree (not wanting to have children), and

(2) Never marrying.

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

Post by bryansmile » Tue Jun 30, 2020 11:38 am

Sticking with 30 year mortgages and applying extra cash toward maxing out HSAs and various retirement accounts since early career days.

pcsrini
Posts: 141
Joined: Mon Jan 24, 2011 10:51 pm

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

Post by pcsrini » Tue Jun 30, 2020 12:13 pm

1. Taking a huge personal risk, and coming to the US for graduate studies
2. Marrying someone way smarter than me
3. Being opportunistic with career choices
4. Finding this site, and learning from the brilliant folks here

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