Category Archives: investment

How To Retire By 40

How To Retire By 40

How To Retire By 40

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This is my road map to retire by 40. Everyone’s situation is unique and I can only tell you what I’ve done so far. To retire early, you need to build up a big war chest and that’s what I’ve been doing in phase 1 of my plan (20 -40 years old.) I have been working in the tech industry for about 15 years and I took advantage of every form of savings and incentives my employers offered. Here are what I’ve done so far.

1. Luckily Picked The Right Partner

The right partnership helps each other work toward the same financial goal.It could be paying off debt or retirement or saving for a house. If both people work together and support each other through hard times, then the journey is so much easier. The Mrs. is great at saving and both of us can handle delayed gratification and we make a great team.

2. Get rid of Consumer Debt

We never carry any credit card balance and we haven’t had a car loan in over 4 years. We started with 0 baseline when we graduated from college and never started accumulating debts like so many people did. Thanks to our parents, neither one of us had any student loans. If you’re in debt, you need to get to 0 net worth as soon as you can.

3. Spend Less Than We Make

We always spend less than we made and that’s the key to building wealth. No matter how much money you make, you can spend it all and then some. It is very important to grow your income, but good defense almost always beat good offense (read The Millionaire Next Door.) If you don’t have a budget, make one now. There are many resources on the internet. Check out my detailed post.

4. Emergency Fund

We keep 3 months of living expenses in the savings account. This enables us to weather most emergencies. The last emergency we had was when our old car completely broke down in the middle of a busy intersection. We have the emergency fund and then saved up for 3 more months, and we could purchase a replacement vehicle with cash.

5. 401k

I started contributing to my 401k since my first paycheck. After a few years, I maxed out contribution and have been maxing out ever since. The Mrs. also maxed out every year she worked. She took a few years off to serve in the Peace Corps. and a few more years to get her graduate degree, but other than that, she always contributed to her 401k plan. The 401k is a great investment vehicle and everyone should take advantage of this.

6. Roth IRA

We maxed out our Roth IRA contribution when we were eligible. The Roth IRA will help balance our tax burden when we withdraw from the retirement portfolio.

7. Stock Participation Plan

I maxed out on my company stock participation plan. I get at least a 15% discount so this plan worked pretty well for me. I try to keep company stock to about 5% of my portfolio so I don’t have all my eggs in one basket.
#5,6,7 are especially important because all these come out of my paycheck before I see the money. This helps keep our lifestyle inflation down and compounds our investment. Some of these investments didn’t do that great, but if I had the money in my pocket I would have spent it instead of saving it.

8. Real Estate investment

We purchased a modest home in 2000 with a 15-year fixed mortgage. This was a great move and the home appreciated in value over the last 10 years. We moved to a new place in 2007 and rented the home out. This started us down the real estate investment path. Now we have another rental condo and I’m working on getting a 4-plex. A rental property is also a good hedge against inflation because the rent goes up with inflation and the mortgage loan is worth less.

9. Discount Brokerage Account

We had a brokerage account since I started working and I kept adding to this account with any extra money left. I can purchase any type of investment I want in this account and I use it to balance my asset allocation.

10. Start early

We started investing early and never stopped contributing to all the accounts. We had two huge bear markets since I started working, but we persevered and kept investing through those markets. In 2011, our portfolio is doing pretty well and I am close to my retire by 40 goals.
These are the things that I’ve done to build up my war chest. The next part of the plan is to figure out how to quit the corporate job and keep this war chest locked until I’m in my 60s (phase 2.) See the rest of my Exit Strategy on my About Page. I’ll keep everyone updated as the plan unfolds. :) You can see my Financial Goals at 40 here. If you have any suggestions for my last 3 years in phase 1, please share.
Here is a nice chart for those of you who are more visual.
retire at 40 road map

retirebyforty’s money flowchart
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  1. Great chart Joe! It’s great to have a visual like this to understand expenses and investments! I feel like my wife and I are doing great. We’ve nearly payed off our student loans, we’ve just started contributing into our 401(k), and we’re considering making a house purchase very soon (within a year or so). We’ll also beef up our emergency fund to $10,000 or so from the $2,000 we have now. Of course, everything won’t go according to plan, but at least we have a plan and can course correct if we need to! It’s better than randomly spending money on things that will not benefit our future, right?
    LifeAndMyFinances recently posted..My Favorite Saving Tip – Learn to CookMy ComLuv Profile
    • Derek, you are so far ahead of the typical 20 something. You’re right that it won’t all goes according to the plan, but at least we know we’re heading in the right direction.
  2. Do you have a note somewhere on your final retirement # and how long you think it will last ??
    FB @ recently posted..The Art of Being … Utterly SHAMELESSMy ComLuv Profile
  3. MoneyCone says:
    Nice! I love the flowchart! What do you use to create them?
    MoneyCone recently posted..Vanguard Lowers Fees On Its Emerging Market ETFVWO To 022My ComLuv Profile
  4. Wow!!! You really have done a very good job in building the solid base over which you can rally. Well done. I’m sure it took a lot of sacrifices along the way, but considering your first point, you’ve had a good support from your partner!
    I think your best asset is having such clarity regarding your finances and your goals. That’s what has kept you focused and on the right track. Good luck on the last 3 years of step 1!!!
  5. Great summary roundup. I hope to be out of the rat race by 35 or earlier, myself, but realistically even 40 would be a nice time.
    Invest It Wisely recently posted..Investing in Oil- The New Alberta Bakken PlayMy ComLuv Profile
  6. Good tips, Joe. I think that #3 (spend less than we make) and #10 (start early) are the foundational tips that help start the snowball of savings and accumulation. The other tactics are valuable as well, of course.
    Cool flowchart. I think it’s good to do these sometimes, as visualizing the flow of money can help us better understand where our money is going (or how it’s coming in).
    • Thanks! I like the flowchart too. I’m more of a visual person and it’s a good reminder.
      Do you have an early retirement target too? Kevin’s target is 35 and I think we’re both past that point. :)
  7. I really like the flow chart as it is a great visual to keep yourself in line with your goals.
    IPA @ recently posted..Investment Philosophy 1 – The Ground WorkMy ComLuv Profile
  8. Aloysa says:
    Great! I missed out on “start early” part due to living somewhere else and not in the US (different retirement system there). Still working on #2 and 4 (well and all the rest except #1 :-) ). I might adopt your road map, I think! :-)
    Aloysa recently posted..Using Technology to Cope With EmergenciesMy ComLuv Profile
  9. I think you created the perfect plan. In parallel, I too followed such a plan, but with 1 missing important ingredient… my wife become a stay at home mom when my son was born 10 years ago. While we don’t regret the move, it did set us back…
    Great chart and excellent instruction on how to retire early!!!
    Money Reasons recently posted..Health Journal Version 01My ComLuv Profile
    • We put off having a baby until now so we’ve been working since we finished school. My wife likes to work, it gives her purpose and she enjoy the working environment. I will try to be a stay at home dad soon. :)
  10. krantcents says:
    Looks like a good start! The intangible is what do you do when you achieve your goal. Believe me that is the hard part. Keep it up.
    krantcents recently posted..New Year’s Resolutions UpdateMy ComLuv Profile
  11. Great chart. Just writing it all out gave us relief and motivation. Now that you are several years into your plan, I would imagine it only gets easier, as your resolve gets stronger that you are indeed on the right path!
    Roshawn @ Watson Inc recently posted..The Impossible Question- Just Who Is The Middle ClassMy ComLuv Profile
  12. That’s an impressive plan! For additional income would you and the Mrs. consider jumping into a better paying job or a company that has 401k matching? That’s the only thing I can think of as your plan looks very solid! :)
    Buck Inspire recently posted..Maximize Your Business TravelMy ComLuv Profile
  13. RB40, I like your graphics. It’s a great visual reminder. Do you keep it posted anywhere as a motivational tool?
    101 Centavos recently posted..Ragu’My ComLuv Profile
  14. To me “retirement’ = life after work”.
    If you HAVE to generate a living from an investment of time (e.g. working for yourself) and/or stress (e.g. owning a business that you no longer ‘work’ in, but still have to worry about), then you’re not retired. Sorry.
    On the bright side, you have freed yourself from one boss and replaced him with a far nastier one: yourself ;)
    My retirement was at 49 and came from doing 1.; 8.; and wishing that we did 10.
    As to the others: we earned more than we spent; practiced delayed gratification (turning it into an art form); invested within (business) and without (real-estate) until we reached our let’s buy-and-island-and-disappear number at which point we sold up everything bar the real-estate investments.
    Now, I do work … but for fun!
    That just means that I’m too boring to work out how to have pina-colada type fun ;)
    AJC @ 7million7years recently posted..Anatomy Of A Startup – Part IIIMy ComLuv Profile
    • So if you are still working (even for fun), are you retired?
      I’m not going to completely stop working once I hit 40. I’ll figure something out.
      I definitely wouldn’t do something that’s not fun.
      • I’m working on my blogs (I love to write about PF; I don’t advertise or promote) … I’m working on startups. I really see it the same as ‘working’ on any hobby. But, I’m not relying on the money … that takes an awful lot of the stress of ‘working’ away.
        AJC @ 7million7years recently posted..Anatomy Of A Startup – Part IIIMy ComLuv Profile
        • Yeap, stress is a big part of what make work a job.
          I still have to work a bit after 40, but hopefully just part time and only things that I like to do. Blog and other ventures.
          Rental investment will have to pick up the slack. The Mrs. will still work.
  15. How much liquid cash do you estimate you will have when you reach 40 since you can’t touch your 401K until 59.5?
    Financial Samurai recently posted..A Question To Ask On Valentine’s DayMy ComLuv Profile
    • Not a lot, I’m estimating 200k if I’m lucky. Most everything else will be tied down in retirement accounts and real estate investments.
      As long as cash flow is positive, I think we’ll be OK.
  16. JenP says:
    I’m already 40 – well, 41 actually!
    Your post is really inspiring and I’m wondering what I could do to retire by 50. A lot of people here (I’m in the UK) struggle to retire by 65. I really don’t want to be in that position.
    My problem is that I don’t want to sacrifice my quality of life now (I only work part-time so as to have more time to spend with my elderly parents and do volunteer work) in order to earn more money to save for my retirement. Perhaps I need to learn to be more frugal.
    JenP recently posted..LonelinessMy ComLuv Profile
    • Hi JenP,
      You need to save and invest aggressively if you only have 10 years to do it. Maybe get into real estate and look into rental properties?
      Be more frugal will definitely help.
  17. Where is the “… and a miracle happens…” or the ever popular “… it rains money…” step?!?! Good God man, update your plan!
    Big Cajun Man recently posted..Top 10 Bad Financial ListsMy ComLuv Profile
  18. Great advice for anyone, no matter when they want to retire. I advocate building as much wealth as possible when you are young, much more time to let compound interest (return) work its magic. (Even if you don’t want to retire early)
    Barb Friedberg recently posted..CHEAP VALENTINE’S DAY GIFTSMy ComLuv Profile
  19. Mike Choi says:
    I like your post. I’m trying to retire as early as possible. I contribute a lot of my companies 401k plan and have a roth IRA. I started this as early as possible.
    Do you plan on working part time once you retire? Or do you have hobbies that you are going to take up?
    • I’m planning to work part time when I hit 40. I’m planning to take a year or two off to figure out what I can do. The Mrs. and the rental income will have to pick up the bills meanwhile.
  20. Wow excellent chart! I wish I had those mad computer skills :)
    Great instructions on how to retire early. I want to retire early too- I want to be able to raise my kids and go on vacation with them during summers and take my time cooking :)
    youngandthrifty recently posted..Valentine’s Day for the FrugalMy ComLuv Profile
  21. Evan says:
    I know everyone is patting you on the back and saying good job but I don’t get the plan. If you want to retire at 40 why are focusing so much on qualified accounts that you shouldn’t touch till 59.5 (unless you are going to look into 72t/72q distributions).
    Take the 16,500 that you are probably dropping into the 401(k) and use it to purchase a stream of income when you are 40 years and 1 day…not when you are 59.5? Use it to pay down rental property, build a business, buy a fixed annuity, etc.
    Not trying to be harsh it, but to do anything else just doesn’t make sense to me.
    Evan recently posted..Why I Will be Purchasing Life Insurance on My Newborn BabyMy ComLuv Profile
    • I want to focus on the retirement accounts because I want to let it compound. We are pretty frugal and I think it will be pretty easy to work just enough to pay the bill. So at 40, we will probably stop contributing to retirement account and work just enough.
      We are working on alternative stream of income for the 40 + 1 day also. I’m working on getting a 4 plex and another additional goal is to have at least 150k liquid to build business/invest in dividend income. So I am working on both retirement accounts and income stream at the same time.
      The bottom line is we want to be able to have a relax retirement. From 40 to 60, I can always pay the bill by taking a job if I really need to.

Retire By 40: Investment Fundamental #10 – Start Early

Retire By 40: Investment Fundamental #10 – Start Early

Investment Fundamental #10 – Start Early

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start early invest
Baby is T-minus 3 weeks, so I’ll need to wrap up my 10 investment fundamentals and write a big “How I will Retire By 40″ post before things get hectic. My #10 is to start investing as early as you can. This is one of the most important rule of investing. When you start investing early, time is on your side and your investment have more time to grow with compound investing.

Compound Investing

Compound investing is the best thing since chocolate cake because every year your gain from the previous year will become the base line for this year. If you invest $10,000 in 2010 and had 10% gain, then you would make $1,000. So in 2011 you will start with $11,000. If you have the same 10% gain in 2011 then this year’s profit will be $1,100. Every year you will make more and more money. As you all know, our time on Earth is limited so the earlier you start, the more you will have when you stop working.

Let’s look at some hypothetical examples.

Joe starts working at age 20 and invested 10k per year right away. We’ll assume 10% gain to make it simple. In 20 years, he stops investing, but he won’t withdraw the money until he completely retires at 68. He will have $3,351,214 in his investment account when he is 68.
Michelle starts working at age 20 and spends a lot of money on clothes, shoes and purses. She wises up and starts contributing to retirement at age 30 and invests 10k per year for 20 years until she is 50 and then stops. In this case, she will have $1,625,989 when she retires at 68.
start early invest graph
They both invested 200k, but do you see the huge difference in the amount accrued at age 68? Even if Michelle keeps investing 10k/year for another 10 years until she is 60, she will only build up her account to $1,860,696. This is because Joe had a 10-year head start on her at the beginning of the race.
Kevin made a great retirement calculator. You can check it out and plug in different numbers to see what your retirement may look like. That’s what I used to calculate the numbers above, so if there is any mistake it’s Kevin’s fault. ;) He also made a video showing how you can have $1M when you retire.
OK, I see this calculator is not quite perfect. Michelle’s 10k investment should be adjusted for inflation somehow, but her account still won’t catch up with Joe’s account even with that. Kevin also shows two columns for tax advantage vs post tax account. It’s startling to see how much difference there are in the two. Another lesson learned – put off paying tax as long as you can.

Start Early

In my case, my dad insisted that I contribute to the 401k when I started working. I wrote a guest post about this and it is up at Budgeting in the Fun Stuff if you haven’t seen it – The Best Financial Advice I Ever Received. Thanks to my dad, my 401k account is in good shape and I may be able to retire early.
Remember – Nobody thinks about quitting when they start a new career so they don’t think about retirement. When we’re young, we just want to spend the money, but think how much you are taking away from your future self. So start saving for retirement as soon as you can and future you will be that much happier.
ps. I will max out 529 for baby while I’m still working these next few years to get him started early. Once I stop working, we probably can’t contribute to 529 as much. BTW, isn’t technology AMAZING? I didn’t even know they can do this. The ultrasound technician pushed a button and we can see him smile and frown, so awesome!
  1. Starting early is key to getting that compound interest rolling! My wife and I have started our retirement funds. While we didn’t start super early, she was only 22, and I was 25, so we’re doing better than most I would assume!
    LifeAndMyFinances recently posted..Will the Nissan Leaf Save Me MoneyMy ComLuv Profile
  2. We started our retirement funds when we got our first paycheck at the age of 23. (We got married a week after graduation.) I wish the market had performed better over those 20 years, but I am so glad we invested back then.
    Have you decided which state you will use for your 529?
    I can’t believe how much better ultrasound pictures are now than when I had my last one 13 years ago. The 3D imagery in phenomenal.
    Be ready, that baby might decide to come out any minute!!
    Everyday Tips recently posted..Can A Health Journal Help Me Can A Health Journal Help YouMy ComLuv Profile
    • I did the same! The Mrs. got started a few years later and had a couple of non contributing years, but her account is catching up to mine.
      I also wish the market had performed better, but I think we are still better off than many more people.
      I heard baby might come any minute, I’m ready! Well, not really I still have to pack a bag, but the Mrs. is ready.
      We probably will use Oregon’s 529, but I heard good things about Utah. I will need to do more research.
  3. Jessica07 says:
    Great post. Great, great, great post. *applauding wildly* I think you should make this fundamental #1. :)
  4. Jessica07 says:
    By the way, thanks for posting the picture. I want one. :(
    Jessica07 recently posted..5 Steps to Reclaiming Your EveningMy ComLuv Profile
  5. Congratulations on the baby!
    And you hit the nail on the head with saving early. Compound interest is the best thing in the world when you have enough time to let it grow. (unless we’re talking about inflation)
    Kevin @ recently posted..Giveaways Galore!My ComLuv Profile
    • Thanks for making the spreadsheet. It’s really helpful see my plan. All the retirement calculator I’ve seen does not support stopping contribution at 40. :)
      I also realized why compound interest is the best. It’s because we have a limited time to live. If we live forever, we can always compound later. However, we only live for a limited time so it is essential to start as early as possible.
  6. OMG a baby! Congratulations, I am so happy for you! :)
    I totally agree with you “put off paying tax as long as you can”. Taxes is one of things that keeps the poor from the rich.
    lovely leverage recently posted..Leverage and Cash CowMy ComLuv Profile
  7. Marc says:
    Great picture! We didn’t get a 3-D ultrasound with either of our kids as my wife feels they are a bit creepy. I had a 401K that I started while working for a tech company in the .com era but I have had to cash it in (I know bad move) due to circumstances that came our way.
    • Thanks! I need to read up on how this work. I guess it’s just surface mapping, but it is so cool.
      It’s incredible that we can see him moving around and he got all cranky after being poked with the ultrasound device.
      Yeah, life gets in the way of saving sometime.
  8. I think all schools should stress this fundamental rule of start saving for retirement early. Compounding interest sounded Greek to me, but looking back, really should have taken more advantage of time. Congrats on the baby on the way. Exciting! :)
    Buck Inspire recently posted..Entrepreneur AnalysisMy ComLuv Profile
  9. Aloysa says:
    I started contributing when I got my first real job in the US. I think I was 27-28. And I could contribute a lot because my salary was miserable. :-) But as soon as I got a decent job, my contributions increased. I love to see it grow (when it actually grows). I do have a friend who is in this country longer than me and STILL doesn’t have a retirement account.
    Aloysa recently posted..Lesson From Bungy JumpingMy ComLuv Profile
    • This last 10 years had been really tough for stock investors. Hopefully the next 10 years will be better!
      I think you’re still better off than a lot of people because you already started. I would guess most people only start investing in their 30s.
  10. Not everyone is able to start contributing early because many people in their 20s are riddled with student loans. Even without any loans, salaries are meager when one first starts a career which makes it very hard to save substantial amounts!
    Unfortunately, I only started in my early 30s, but better late then never!
    BeatingTheIndex recently posted..2010 Canadian Oil &amp Gas Top PerformersMy ComLuv Profile
    • That’s my brother. He is already early 30s, just finished school and has student loans. I think as long as you are saving something, it’s still a lot better than most people.
  11. I agree that starting early is key as it builds the proper saving behavior and you have it for the rest of your life. As soon as I started working I started saving. The key is to not get caught up in life style inflation :)
    I believe it’s a 2 step approach though, the compound growth is not that easy and 10% is an insanely large number to achieve. 3 years ago I readjusted my investing philosophy because I wasn’t getting the compound growth I wanted even though I was saving and investing.
    The compound growth isn’t as easy and to beat inflation (or at least keep up with it) you need at least 3%.
    The Passive Income Earner recently posted..Dividend Yield- Scotia Bank TSE-BNSMy ComLuv Profile
    • 10% is Kevin’s number. :)
      I would be happy with consistent 8%.
      What is your 2 steps approach? Can you share? I know you like dividend stocks. My approach will be about 50/50 rental/stock market.
      I agree compound growth is not that easy especially over these past 10 years. The dot com bubble and the great recession did a number on everybody’s accounts.
      • I meant that first you need to save and start early. Then you work on making your money work.
        The theory of compound growth is awesome, but it’s hard to execute in practice. Back in the 80′s, my parents had interest in the 10%-15% so it was easy but these days you have to work hard to execute compound growth.
        I am like you, I want to do rental and dividend stocks. Rental is hard in Vancouver though, I’ll need to go out of town.
        The Passive Income Earner recently posted..Dividend Yield- Scotia Bank TSE-BNSMy ComLuv Profile
  12. What a great picture & post :)
    I saved my son’s ultrasound and its in the front of his 1st year baby book. Very cool to look back on it all….he’s 21 this year.
    I save very well but should look into some options for 401K which will help. Since I am self employed that may impact things dramatically.
    Deidre @ TransFormX recently posted..Diabetes And The HCG Diet – What You Need To Know Before You DecideMy ComLuv Profile
  13. krantcents says:
    This is one of those situations where youth is wasted on the young. Most young people do not want think about retirement in their twenties, maybe the best compromise is investing in a Roth IRA. It has less restrictions and can be used to buy your first home. Maybe another compromise is to think of investing in a 401K as a tax subsidized investment. For the price of a lunch, you can have millions in 35 years!
    krantcents recently posted..Budgeting Is a Waste of TimeMy ComLuv Profile
  14. Suba says:
    We didn’t start saving for retirement until a couple of yrs ago (we are almost 30 now), but in our defense we didn’t start earning until we were 25. So luckily we wasted only 2 earning years before we wised up. For us the market has been phenomenal. We started putting money away in 2007, market crashed in 2008, which is when we upped the contribution like crazy (not timing the market, just decided to take the plunge and do it). So essentially we bought a lot on “sale”. We are not counting on those, how many more market swings we will have to see before we retire, but it is nice to see the balance. Hopefully we can catch up inspite of starting a little late.
    Suba recently posted..Vanguard vs Fidelity – Which is betterMy ComLuv Profile
    • You guys still started in your 20s right? That’s a lot better than most people and you still have many years left to invest. We kept contributing through the dip as well and it worked out OK. Our portfolio has mostly recovered. It could have been a lot worse if we stop investing and pulled out the last few years.
  15. I’d say that most readers and commenters are veteran or newly-converted savers. The majority of North Americans are not — hence the abysmally low national savings rate.
    No doubt that starting early yields higher returns through compounding. But for many who financially illiterate or in dire, paycheck-to-paycheck situations, contributing to a 401K or TFSA is often a “next month” resolution.
    • You’re right about the saving rate that’s for sure. I think most of the readers of personal finance sites are making positive progress and are way ahead of the average.
  16. Warren Buffett said one of the greatest factors to his success was that he started early. Buffett filed his first tax return at the age of 13 taking as $35 deduction for the bike he used to deliver papers. For those of you who are young, start now. For those of you who are older, it is never to late to start.
    Clay Ivy Finance recently posted..3 Choices For SavingMy ComLuv Profile
  17. Evan says:
    Congrats on the new one coming! Ummm did you sign up for a Pregnancy Pool yet (cough cough lol). When you say max out your 529 do you mean up to gifting limits or do you mean up to your state’s deduction limits?
    Evan recently posted..Cable and Satellite Companies You Can Do BetterMy ComLuv Profile
    • Thanks! I didn’t even think about the Pregnancy Pool. I’ll let the Mrs. know.
      I meant up to the deduction limit on the 529. That’s $4,000 in Oregon so we’ll have to set it up after he gets his id.
  18. Your Dad is a smart man. I wish I would have listened to my Dad when he told me to contribute to my RRSP when I was a teenager…
  19. Yakezie says:
    I wonder if many people do in fact start early and ever reach those lofty numbers though? Or, do they just get shallacked after a downturn, panic, sell, and never get there?
    Yakezie recently posted..Are You Stuck In A RutMy ComLuv Profile
    • I will ask my friends and see what they do. One guy pretty much quit the stock market and is investing in real estate. Another gal also complain that the market never did her any good so she probably doesn’t have much in the market either.
      The problem with starting early is you don’t know what you’re doing early. Unless you’re in finance or have a good adviser.
      • People in this situation may be best advised to contribute to a market index fund. If you don’t know what you are doing, take market returns rather than trying to pick indivdual winners. Over long periods of time the overall market return will serve you well. I would suggest this before ever considering owning real estate. If you don’t know what you are doing real estate is tougher. Liability, repairs, and dealing with people come into play much more with property than with stocks.
        Clay Ivy Finance recently posted..3 Choices For SavingMy ComLuv Profile
  20. Congratulations on the new arrival! I wish I listened to my dad when he said don’t use your credit cards and only pay the minimum. Live and learn… live and learn :)
    Lisa @ Cents To Save recently posted..I Believe in PinkMy ComLuv Profile
  21. Moneycone says:
    When Google went public, the first thing Google did was hire the best brains from the financial industry to educate Google employees about what they are about to receive and how best to manage the new found wealth.
    I wish more companies did that. Atleast for fresh graduates on their first job.
    Moneycone recently posted..Buying Stocks Neglect This Metric At Your Own Peril!My ComLuv Profile
    • It would have been great if I had more finance education when I first started investing. We would be in much better shape if I had good advisers. Oh well, experience is the best teacher.
  22. First, let me say congratulations!!!!
    I do agree that the magic of compounding interest is still mind-boggling yet so very simple. I do agree that people certainly need to put themselves in a position so that retirement is not a struggle, and the earlier one starts, the less work they have to do. Investing in tax-advantaged accounts dramatically increases the odds of retiring comfortably.
    Roshawn @ Watson Inc recently posted..Do Rich Parents Matter Round UpMy ComLuv Profile
  23. Big Congrats on baby!
    Also, I agree that compounding and starting early make a great tandem. Let math work in your favor, and don’t procrastinate. Just get started. It really makes a big difference to be action-oriented in this realm.
    One addition – important to consider present value here, as a dollar today is worth more than a dollar tomorrow (unless deflation kicks in).
  24. Okay a couple of things here. I get the invest early thing. I started my first 401K at 19! It wasn’t much but it adds up over time. :)
    Second thing is that most 20 year olds don’t have 10K to invest. Sorry, it’s the truth.
    Sandy @ yesiamcheap recently posted..February 1 Check InMy ComLuv Profile
    • That’s the problem with starting early. You don’t have any money and you don’t have enough investment experience. I wish I had a great finance adviser, but I guess we are doing ok.
  25. This should be # 1. Not only because it’s an important one, but because it’s so easy to apply!!! However, young people are usually driven to spending much more than they can afford and, by the time they realize the power of compound interest, they first have to pay the debts they took and then start. Lots of time wasted!!!
    Finanzas Personales recently posted..Diversificación – una estrategia de protecciónMy ComLuv Profile
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