PSA: Save early

[Anonymous]

Anonymous wrote:My biggest financial regret is that I didn’t start saving aggressively, or at all, when I got my first professional job right out of college. I was living with a bunch of roommates and going out for drinks every night, never could be bothered to make it to HR to open the 401(k) WITH A MATCH THAT I NEVER BOTHERED TO GET. When I finished my MBA I started saving, but that was in my late 20s and I missed out on all of that money from plus time compounding. Now I’m pushing 50 and I don’t want to calculate how much I lost but I think it’s probably a year or two of retiring earlier, and I wouldn’t have missed that cash at 22. Young people, be smarter than me.

THIS^^^
When you are young and just out of college, it's not hard to continue living "like a poor grad student/college student". If people do that and start saving, you will change your life for the better. Not hard to live in a basic apartment and continue to drive your old car.

[Anonymous]

A little off topic, but this is from the NYT article:

“Lou, at 43 a fit 5-foot-9 with a prominent nose and wiry dark hair that's quickly disappearing from the top of his head, sits on a couch next to me.”

Why do articles have to have these awful descriptions of people?

[Anonymous]

Anonymous wrote:A little off topic, but this is from the NYT article:

“Lou, at 43 a fit 5-foot-9 with a prominent nose and wiry dark hair that's quickly disappearing from the top of his head, sits on a couch next to me.”

Why do articles have to have these awful descriptions of people?

That’s a lot off topic

But yes

[Anonymous]

I was fortunate that I was able to save almost immediately after college. And I had an early interest in the stock market so most of my investments went there and not into bonds or CDs. Never married so I was able to retire early, now live off stock investments/dividends. My path has been atypical but everyone should try to save 15-18% of your gross income, in equities mostly, and build up the passive income stream. It takes patience and discipline, deferred gratification. I had no mentor but my interest and math ability helped me in my pursuit of wealth. We live in a consumer driven society so it is hard for many people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I had no one in my life speak to me about retirement savings when I was younger. I just knew I had to save, because of my own personal experience. Yet, between living in a HCOL area making very little to then making something and wanting to actually live for the first time in my life and then being SAHM for 11 years, I have saved very little. To make matters worse, my DH is not the saver, I am! He only has some money in a 401K and IRAs because I made him do it!

I knew I should have been saving more when I was younger and I now have a lot of regret. However, unless someone had an adult guiding them, or better yet, making them, it was very challenging for people our age who were starting out in the 90s during transition from pensions to 401K. Whatever little I invested I did very poorly. However, it pains me to think about how much more expensive our retirement will be, because we are starting so late.

Being a SAHM for 11 years was a very expensive choice. Not saying it wasn’t worth it, but the opportunity costs are high.

My DH was making good money then. Also, the way I looked at childcare is that either you pay someone to do it or you do it yourself and I chose to do it myself.

dp.. of course, and that is priceless, but as the PP stated, it came with an opportunity cost.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My biggest financial regret is that I didn’t start saving aggressively, or at all, when I got my first professional job right out of college. I was living with a bunch of roommates and going out for drinks every night, never could be bothered to make it to HR to open the 401(k) WITH A MATCH THAT I NEVER BOTHERED TO GET. When I finished my MBA I started saving, but that was in my late 20s and I missed out on all of that money from plus time compounding. Now I’m pushing 50 and I don’t want to calculate how much I lost but I think it’s probably a year or two of retiring earlier, and I wouldn’t have missed that cash at 22. Young people, be smarter than me.

THIS^^^
When you are young and just out of college, it's not hard to continue living "like a poor grad student/college student". If people do that and start saving, you will change your life for the better. Not hard to live in a basic apartment and continue to drive your old car.

This is what I did right after college, shared house with 5 people, old car. With my first job I maxed out the 401k from day 1. I also just got laid off at 53. I have $2 million in my 401k and have decided I will retire.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My biggest financial regret is that I didn’t start saving aggressively, or at all, when I got my first professional job right out of college. I was living with a bunch of roommates and going out for drinks every night, never could be bothered to make it to HR to open the 401(k) WITH A MATCH THAT I NEVER BOTHERED TO GET. When I finished my MBA I started saving, but that was in my late 20s and I missed out on all of that money from plus time compounding. Now I’m pushing 50 and I don’t want to calculate how much I lost but I think it’s probably a year or two of retiring earlier, and I wouldn’t have missed that cash at 22. Young people, be smarter than me.

THIS^^^
When you are young and just out of college, it's not hard to continue living "like a poor grad student/college student". If people do that and start saving, you will change your life for the better. Not hard to live in a basic apartment and continue to drive your old car.

This is what I did right after college, shared house with 5 people, old car. With my first job I maxed out the 401k from day 1. I also just got laid off at 53. I have $2 million in my 401k and have decided I will retire.

Congratulations, sounds like you made a smart move early on and saved yourself a lot of stress later. Enjoy your well earned retirement!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Hi OP,

I am sorry this happened to you. This is very stressful. My husband was a non-equity partner in big law and was laid off when he was 49. In a way, this was the best thing that ever happened to our family. After doing some soul-searching, he ended up getting a government job. Our HHI decreased by 2.5 fold. Our children won’t inherit millions. But:
- DH is happy
- our marriage is better than ever
- our children will inherit happy memories and a healthy model of a good marriage

We used to be able to afford (pretty much) everything: fancy vacations, fancy restaurants, fancy presents for our children. But we hardly had time to truly enjoy life. We no longer can afford to drop $500 on a fancy dinner. But when we do splurge (after saving up), it is much more meaningful. We were lucky that we still had our old modest home so that we did not have to move.

Good luck with everything! You’ll get through it!

We were never super-high income but at 59/53 we have saved up about $7M. Never ever paid for a $500 fancy dinner but friends and family in CA have treated us to Michelin star restaurants and expensive wine from their $250K wine cellars. I honestly can't tell the difference between a $30 meal and a $300 meal. The sizzle is better of course, but rarely the steak. Same goes for wine. I don't get the " smell and taste different with each sip: lime, wildflowers, wet stone and more" BS! I'd much rather have a good burger and fries with beer at a Fuddruckers than BS fancy food that costs an arm and a leg.

The bolder makes you sound like a cheap jerk. There are people in my extended family who are like this. They accept invitations to lavish milestone birthday celebrations, weddings, reunions, etc., but never once offer to pick up a tab or host an event anywhere. I can do math, and I suspect their net worth is similar to my own. It’s not a good look. I like Fuddruckers too and would love to be treated to a burger.

I’m all for early savings and living within one’s means. But being cheap at your age with your resources is something else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why didn't you start early OP?

This is not helpful.

OP, so sorry this happened to you. I'm glad you ramped up saving in the last 5 years, and wish you well getting a new job. Def apply for unemployment ASAP.

What an absurd thing to say - of course it's helpful. A cautionary tail is often the best teacher.

The OP was the cautionary tale. The "why didn't you save?" was irrelevant and piling on. NP.

[Anonymous]

For those looking to guide their kids, introduce them to the FIRE movement, where people can build up a nest egg for retirement in as little as 10 years. It doesn't mean you have to retire after 10 years, but leaves so many more options for your future. Plus, 10 years is an easier timeline for young people to focus on instead of the 30+ working years before traditional retirement.

For young women who hope to be SAHMs, they can follow the FIRE path right after college, and be financially prepared to SAHM by their early to mid 30s without any of the standard risks. During their SAHM years, their spouses can pay for all the bills while their assets continue to accumulate, and by retirement age, they'll be set even if the marriage falls apart.

[Anonymous]

Hmm well good luck with the kids, we discussed money, paid for college, gave them each a starter investment account when they were in their early 20’s. One we helped set up their retirement fund thru work has decreased the amount since and another cashed out the investment account. They either get it or they don’t. But I’m over it, I’m not saving for them any I’m spending it!

[Anonymous]

Anonymous wrote:I was 30 when this article came out. https://www.nytimes.com/2003/04/13/magazine/commute-to-nowhere.html?unlocked_article_code=1.-Ew.mYN6.kn_DsrXdiLD4&smid=em-share. It made such an impression on me that I’ve been saving like crazy ever since.

Thank you for sharing that. It was such a depressing article!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My biggest financial regret is that I didn’t start saving aggressively, or at all, when I got my first professional job right out of college. I was living with a bunch of roommates and going out for drinks every night, never could be bothered to make it to HR to open the 401(k) WITH A MATCH THAT I NEVER BOTHERED TO GET. When I finished my MBA I started saving, but that was in my late 20s and I missed out on all of that money from plus time compounding. Now I’m pushing 50 and I don’t want to calculate how much I lost but I think it’s probably a year or two of retiring earlier, and I wouldn’t have missed that cash at 22. Young people, be smarter than me.

THIS^^^
When you are young and just out of college, it's not hard to continue living "like a poor grad student/college student". If people do that and start saving, you will change your life for the better. Not hard to live in a basic apartment and continue to drive your old car.

This is what I did right after college, shared house with 5 people, old car. With my first job I maxed out the 401k from day 1. I also just got laid off at 53. I have $2 million in my 401k and have decided I will retire.

Sorry about the layoff, pp, but you may want to try something else. You do realize that you can’t withdraw from your 401k without a 10% penalty until you’re 59 1/2, right?

[Anonymous]

I am very grateful to my former employers for requiring attendance at sessions about 401ks, and for offering company matches. I started contributing back in the 1980s at 21, in my first job, always maxing out what I could contribute. They hammered the compounding message.

I was well compensated and had a great career, but by 43, I was laid off and never could find an equivalent or better position. Someone upstream said ageism starts at 50 - heck, I thought it started in the 40s twenty years ago!

Thanks to my savings and investments and my husband’s steady government job, we’ve managed by cutting way, way back. No housekeeper, no dinners out except for celebrations, rare movies, etc. Tonight my college son looked at our stove and said, “Is that burner still broken?” I said, “Yes, it sucks - there are a lot of broken and worn out things in this house.”

I didn’t have to point out to him, but I thought to myself that he knows we’ve prioritized what’s important. This spring he’ll graduate with no student loans and a bright future ahead of him. I will still send him the NYT article pp linked to.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My biggest financial regret is that I didn’t start saving aggressively, or at all, when I got my first professional job right out of college. I was living with a bunch of roommates and going out for drinks every night, never could be bothered to make it to HR to open the 401(k) WITH A MATCH THAT I NEVER BOTHERED TO GET. When I finished my MBA I started saving, but that was in my late 20s and I missed out on all of that money from plus time compounding. Now I’m pushing 50 and I don’t want to calculate how much I lost but I think it’s probably a year or two of retiring earlier, and I wouldn’t have missed that cash at 22. Young people, be smarter than me.

THIS^^^
When you are young and just out of college, it's not hard to continue living "like a poor grad student/college student". If people do that and start saving, you will change your life for the better. Not hard to live in a basic apartment and continue to drive your old car.

This is what I did right after college, shared house with 5 people, old car. With my first job I maxed out the 401k from day 1. I also just got laid off at 53. I have $2 million in my 401k and have decided I will retire.

Sorry about the layoff, pp, but you may want to try something else. You do realize that you can’t withdraw from your 401k without a 10% penalty until you’re 59 1/2, right?

There are ways to get out the money before then without penalty, particularly in OPs situation, the SEPP approach may make sense.

https://institutional.fidelity.com/app/item/RD_13569_15965/understanding-72t-and-sepp.html