When you get to be my age, it is easy to look back on a well-lived life and have some regrets. My biggest regret is embodied in the saying, “I earned lots of money when I was young and spent it all on wine, women and song. The rest I just wasted.” Actually, I don’t have any real regrets, because all the roads I took led me to my wife of 22 years.
What got me to thinking about regrets was a recent article in “Forbes Magazine” titled 7 Financial Decisions Made In Your 30s That May Haunt You In Your 50s. Let’s take a look at the seven.
- The Company You Work For – You will have many things to consider when you choose a company, but retirement benefits are important
- Your Starting Salary – “…a salary of $55,000 instead of $50,000 (with 5% increases each year) would earn over $600,000 more in income over a 40-year career.
- Your Choice Of A Partner – Let me tell you from personal experience, divorce is expensive. You lose half of your assets and your half may turn out not to be equal her half. Compatibility about money plays a role as well. If both of you are careless with money, it will be harder than if you tend to be opposites. That goes for respect for risk as well.
- When You Have Children – Here Forbes offers this thought: “Consider a couple that has children when they are 25 years old. Before they hit their 50s, their kids are past the very expensive college years. These parents, still young themselves, have 15 years to focus on their own retirement savings if they plan to retire at 65. Couples that have children when they are 35 years old may not see the light at the end of the “empty nest” tunnel until they are 60—much closer to retirement age.
- How You Invest – Management fees can eat you up. “Make sure you weigh the long-term impact of fees when investing; consider choosing low-cost mutual funds or index funds for retirement savings.”
- Whether You Rent or Buy A House – This may depend on whether mobility is important. Generally the nearer you are to retirement the more desirable it is to have fixed housing costs. A fixed-mortgage at 5% is a risk the banks are taking, not you.
- How To Pay Attention To Your Dollars – Track your expenses with any of the online apps. When tracking, you can more easily identify areas for cost savings and put those savings toward your financial goals.
Now Forbes did a fine job with those seven, but there are two more that are important.
- Remember the Power Of Compound Interest – If, starting at 19 years old you put $2,000 away in an IRA each year for seven years and never put in another dime, you would have more money in your IRA than another man who started putting in $2,000 every year beginning when he was 26. He would have invested $80,000 to your $14,000 and you would have almost $1 million.
- Gone are the days of the briefcase – Men today need a way to carry things like a computer, pencils and pens, sharpie pens, medicine, breath mints, chapstick, business cards, passport, change, headphones, iPhone, external hard drive, glasses, sunglasses, notebook, and Kindle. Why not buy yourself a “murse,” a mans’s purse or travel bag. Cowboys called them saddle bags.