FIRE.156 40years of finance

I’m 52 and I realized that I’ve now reached 40 years of finance/saving/planning experience.  I’ve mentioned before that my dad started teaching me about our family finances: spending tracking, saving, bond investing, home mortgage, etc when I was 12 years old.

Saving

I had to open a savings account when I was 12 after I  received some money.  It was hard at the time watching  ALL of my friends spent the money they received.  Instead of buying new acquisitions, I  learned what a passbook savings account was—not the most exciting acquisition for a 12-year-old.  Now, decades later, I think I’m still less of a spender than many of my friends, or maybe just a different spender.

Shortly after my passbook savings account experience, I shifted into a brokerage account for my savings.

Over the following years of Jr high, high school, and college, I always saved a chunk of my income.  I also spent a chunk—usually on smallerish items—but I always saved.  Sometimes I used part of my savings to fly places, but often I would fund those trips with new income.  I think I was pretty good at saving.

Employment

Looking back, I can say that after moving to Phoenix in the mid-1990s, I did tend to save less money until 1999.  That was the fall when my job was outsourced to IBM and I realized that I wasn’t much more than an “employee badge number.”  The following year (2000) we made sure that we lived off only one of our incomes and saved the equivalent of the second income.  That living-off-one-income continued until 2005 when we decided to push harder with a 7-year Early Retirement plan—target 2012.  We hit our goals in 2011 when my wife left her career, and I followed after another nice three years of working.

In the great recession, or housing crash, or whatever it was called in 2008/09, I learned from Clark Howard about Total Market Index investing and (trying to) ignore short-term variability and invest for the long term. 

Stocks

My first equity investing started in 2009 with 5k or 10k chunks.  I did experiment with buying a handful of stocks in the 2001 dip but NONE of those investments recovered to previous levels.  Interestingly, I did sell my MSFT around 12 years later in 2013 because it was still flat.  Oops, 2001-2013-2022.

Spending

I’ve tracked my/our spending since high school-college, then again from 2001+.  Just like my father told me once, our spending stayed almost exactly the same over the months/years for over a decade.  As he said, “some things go up, and some go down over time.”  His observations were exactly the same for us. 

I guess that means we never really inflated our lifestyle too much as our incomes increased.  I’m sure much of the consistency is due to staying in the same started home (still) and driving our used cars for 10+ years.  Looking back, yes, we did miss out on moving to a nicer (larger) home— no big deal.  Yes, we did go without many of the new car features (I just, in the past month started driving a car with built-in Bluetooth…a 2000ish technology).  SAD!  But we’re in a much better place now…I can drive my 2012 car all day, any time, any day rather than leave it in my workplace parking spot!  Just the same, I get to enjoy my little house all day, every day.

Allocation

I’ve felt comfortable with our asset allocation (67/33ish  or 65/30/5 cash).  Yes, we have seen our balances drop A LOT in the past 6+ months, but I realize that is a “drop” from an all-time high and now down to around where we were in fall 2020…when at that time the balances were” so high.”  Turns out our allocation has been doing well for the past 12+ years.  (IF ONLY I’D STARTED IN EQUITIES IN THE EARLY 90s)   I am still VERY disgruntled when my alumni association asks for money when their academic program never taught us about Index Investing while we were getting our Bachelor’s or MBA.  So much useless alpha, beta, regression analysis academic textbook garbage.  Reading one Bogleheads blog would have resulted in maybe 200% more net worth…ONE Boglehead post.  Or even a Jack Bogle Tiny Book of Investing book.

As Brian Preston from The Money Guy podcast says “let your army of dollar bills march off to work each day so you don’t have to.”  There have been years (in retirement) where our account balances went up more than we earned while working.  Many times the growth was more than double our earned income.

I should end right there.  Multiple years of doing whatever we want without work and yet our account balances increase(d) more than any amount we ever earned while working.  That’s the power of investing early, often and lessons learned…on the good side of the ledger.

*** Nothing in this article is to be construed as financial advice.  I am not a financial planner, nor do I pretend to be.  You should always consult your own professional when seeking advice. This post is not a piece of literary mastery, just a random thought I had.

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