Do you wonder what your best financial decisions were or are?
I do and if you are like me I am sure you do too.
Making smart money decisions is not that hard all you need is discipline and education. Do you want to share your best money decisions in your 20s and 30s and smart choices?
In this post, I will share the 7 best financial decisions I have made in my 30s.
Going through this process almost daily I understand it can be a daunting task. And, in my experience with a bit of skepticism and discipline, everyone can reduce the risk of bad money choices.
My Best Financial Decisions
I would like to know what were your best decisions that helped you increase your wealth. To get the ball rolling lI will share my best decisions ever. I believe these 7 decisions have helped us reach where we are today.
Growing up with Limited Resources (Controversial)
I know this was not my decision and not necessarily a financial decision as well. Growing up with limited resources helped me understand the value of money. This gave me the ability to relish my life.
Who Am I?
Unless this is your first time here, you probably know that I grew up in India and moved to the US after my undergraduate degree.
My dad was a civil engineer working in one of the state government and my mom was a homemaker. In other words, our family was a single income family. On top, we are three siblings and I am the youngest.
Living with limited funds, made us more creative and adaptable. For instance, as a kid, my dad’s old clothes turned into my clothes. Frugality is a value that I got from my parents.
My parents also had a big emphasis on education and made sure that all three of us got a good quality education.
My sister (eldest) has a masters degree in accounting and now runs her own business in India, my brother is a doctor (psychiatrist) in mid-west, and I became a computer engineer which leads me to my next best financial decision.
Getting a Computer Science Degree
Quality education is another great money decision and Business Insider did a study where they found on average a college graduate makes more money than people with no degrees. Another research from the NY Federal Reserve Bank shows that an average college graduate earns $30000 more than a person with no degree.
So I graduated in 2000 which was a really bad year. In other words, many of the technology companies weren’t hiring that year. After applying to a few hundred jobs and attending a handful of interviews I landed a job as Software Engineer in NYC.
A young lad from India moved to NYC with an above-average paycheck. This was my time to enjoy life and obviously I made mistakes. Actually a lot of them. Technology jobs pay much higher and that is the sole reason I think this was one of the best decisions.
The salary from my tech jobs has given me the opportunity to live a comfortable life, support my parents back home, and start investing in my future aka retirement.
Started Funding 401K Early
With a lack of financial education, I had no idea about the time value of money. However, over time I have learned time is your best friend and worst enemy and young people have time on their side.
I had an employer match which sounded like FREE money. Finding out about FREE money was the reason enough for me to start contributing. Since then I have been maximizing my 401K at the age of 26 and have maximized it ever since except in 2018-2018 when I was living in Thailand.
I know it is hard for young people to maximize 401K early in their career but the sooner you start better it is. I recommend starting to invest right from your first paycheck.
Marrying the Right Partner – Greatest Financial Decision
When it comes to love money usually is not in your thoughts. However, marrying the right partner can make your financial future. On the contrary, if you marry the wrong one you’re heading right into money hell.
Fortunately, I have been very lucky to marry my wife and she has been a great partner in crime. And without her, I wouldn’t have been able to achieve what I have without her support.
Ever since we got married she has been the anchor of my life, the person who keeps me grounded and focused. She keeps reminding me about our goals and helps me take great money decisions.
Getting Laid Off From My Job
In general, getting laid off from the job is not great but in my case, it turned out to be a blessing in disguise. It brought a ton of stress but gave us a tremendous amount of learning. It wasn’t until this time my frugality was buried inside me and this event helped me pull it out of the grave.
Losing a job with good pay was heart-breaking but it forced us to think and retrospect on our past. It helped me discern that I was paycheck poor and was living paycheck to paycheck.
It is after this event we recognized the importance of saving and we started ramping up our savings rate and today we save about 50% of our paychecks.
What was the eye-opening event in your life?
Learning about FI/RE Movement
Soon after finding the new job and learning about FI/RE (Financial Independence and Retire Early). We embarked on the Financial Freedom journey was a pivotal decision. Since 2009, we have been on a path to increase our networth. In about 10 years we have increased our networth from zero to $1.5M and we are on track to our early retirement at 50.
Every month, we try to pay ourselves from the top and then fit our expenses into the balance. I would also acknowledge we have made a few mistakes on this journey but have course-corrected every time.
With money, it is an eternally learning game as the world around us is evolving and we have to adapt each time.
Buying a Home
Generally, FI/RE seekers are not a proponent of buying a primary residence but in our case, it turned out very well. There are a few connotations connected with buying a house:
- Leaves you exposed to unexpected expenses i.e. less money to invest
- Hinders your flexibility to move around to follow your passion or reduce living expenses
- A lot of people do it to satisfy the personal ego of homeownership
In 2014, we chose to defy these concerns and bought our first home in the suburbs of Seattle and we converted it to rental in 2016 and sold it in 2017. Our first house added about $200K to our networth in less than 3 years which is phenomenal.
Conclusion
So those were my best financial decisions and I am really thankful for all that we have accomplished. What are your best financial decisions? I want to hear your slam dunks, and winning streaks.
That said, I have made my fair share of financial blunders which I’ll write about in a follow-up post.
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