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I have been pondering for a week whether or not to post this out of concern it will be misinterpreted – I have experience with that.
As Jonathan once told me, “those who are financially prudent will most likely enjoy success, even if events don’t always go their way.” That’s it for me, mostly prudent and very patient.
Is it always necessary to follow all the “rules,” to be precise with every financial decision you make, or to agonize over every detail or calculation to find financial success however defined?
None of that is bad, of course, but if you have made mistakes as I have, if you threw caution to the wind at times as I have, if you did it your way, all is not lost.
Here is my point. Sometimes the end can be better than the means appear to justify with time and good fortune on your side. Just keep at it.
I have been writing and commenting on HD for several years and based on the extensive feedback I receive including those darn down arrows with red numbers, my views, my actions, my suggestions are often viewed as – how shall I put this – not normal, unconventional, wrong and at times misunderstood as if I was urging others to do as I do – never the case.
The fact is you probably should do nothing financially the way I have – except be patient and never give up.
Looking back on my life from my first job at age 18 and considering the financial actions I and then we have taken as a couple compared with conventional wisdom, we should not be in the financial place we are today.
Instead I am living proof that financial success is possible even when you don’t always know what you are doing and have minimal interest in finding out except through life experience.
It may be that sticking to the basics, trial and error – and an absence of uncontrollable misfortune can get you where you want to go. Not a recommendation though.
The basics are well known. Live below your means, avoid debt as much as possible (absolutely no credit card debt), avoid lifestyle creep, save and invest from your first job and never stop. I didn’t obtain a college degree until I was 35 so minimize that advantage.
I didn’t job hop, but stayed with one company pushing through a variety of vicissitudes, nepotism, backstabbing and corporate games. There was a price to pay, but also significant rewards – eventually.
I didn’t retire until age 67. I very much liked my job until then. As it turned out my last five years were by far my highest earning years and also generated significant amounts of stock compensation. And then there is the pension based on all those years working and the last five years earnings.
No financial advisor, no planning a retirement lifestyle or even thinking about it. I still hope to visit Monte Carlo someday though. I did none of the well advised, conventional stuff financially or on the road to retirement some of which I advised others to do.
I bought a second home (with a 9-3/4% mortgage) just before the real estate market collapsed, the year before our eldest child started college.
Connie and I began collecting SS at my FRA while I was still working.
We didn’t have a Roth 401k. I never considered Roth conversions as I felt the payback time too short given I didn’t have a roller-over IRA until 2021 at age 78. I did invest heavily in municipal bond funds, but never bothered to compare the tax-free interest rate with net taxable returns- tax free just sounded appealing. Today those funds are 17% of our portfolio – I am surely not investing for growth.
I was talked into purchasing two small variable deferred annuities decades ago when I was in my forties, but stopped contributing as soon as the penalty period was up. Could I have made a better investment? Very likely, but I don’t think about that. The more important thing is we still have them with a combined value of $265,000, and still earning tax deferred.
I converted all my restricted stock and stock options into shares when they vested. It could have been cash, but I put it at risk. Now my former employer stock is too high a percentage of our portfolio – another questionable decision, but oh those dividends. If the company goes kaput so does my pension and we will be living off the tax-free interest and less than optimum social security – I say in jest.
So where has this literary labyrinth taken us? Nowhere of significant interest to anyone except perhaps to give hope to others just as detached from financial reality as I was – am.
No doubt an unnecessary caveat for regular HD participants, but please don’t assume I am suggesting a strategy to follow. Just be patient, approach finances in a way that is comfortable for you – never give up the journey.
With regards to Disney trips, I had the chance to go to Disneyland, not World, as a 5th grader in about 1972. We had a blast. I went to Disney World as a newlywed and had fun. I took my four kids, ages 5-14 in 2003 to Disney World and none of them ever asked to go back. I was grateful for that. Later in life all of us now consider the National Parks as our Disney and they are fantastic. I can’t tell you how much fun and great memories we’ve had at Zion, Bryce Canyon, Grand Canyon, Crater Lake, Yosemite, Yellowstone, Grand Teton, Big Bend, Great Basin–to me, those are my Disneylands and I can’t wait to experience more of them.
Being a Physical Therapist and Athletic Trainer I worked state sports tournaments to obtain extra money to save for the Disney “pilgrimage” as one of my patients labeled the event. We had a savings thermometer to track the savings level. Alas, soon after moving in to the house our children grew up in we had to pay for a chimney liner for our furnace which was missed on the home inspection before purchase.
We had to begin saving the money again, but luckily were able to go just before our children entered their teens, which was a great age to go. At that age they will remember the pilgrimage. It was a one time shot. I wonder how special it feels when the more affluent people in town we knew went annually.
It sounds like you were a mindful spender and a good saver which will get you far. Good for you!
An interesting read. To me, what stands out in this article is being a big saver, as we all should be. We all get to our financial destination in different paths.
In a comment to Rick Connor, you quote “My opinion is that setting prudent financial priorities throughout life is essential and pays long term dividends. Our four children now in their 50s still remind us we never took them to Disneyworld”
You saved so much that you denied your children a lifetime memory of visiting Disney, but it is a memory for them to keep reminding you of it. Perhaps the goals were to buy a second home and travel to 45 countries?
When our children were Disney age neither the second home nor travel were on the horizon. We simply could not afford it and I was not about to charge anything. We did take two of our children and their children after I was retired and could afford it.
My view of the Disney Experience is not of fond memories, but heat, long lines, huge crowds, crying children being dragged around and having to plan where you want to eat and when three weeks in advance plus absurd prices. People are now paying $400 each per day to get in super fast lines.
I want to go up to some of those families and ask “what’s in your 401k?”
My memories of Disney World are fond, being a kid in Florida when it opened. My parents weren’t the richest folks, but we took a few trips north 3 1/2 hours. We were used to the heat, and I remember the A-E ticket books that once used up, there were no more rides to be had. And more recently, Florida resident rates & free FastPass. But my Disney days may be over.
Better late than never for the Disney trips. Sounds like you adult children like to chide you to this day for not taking them when they were younger.
Maybe the missed Disney trip didn’t just save the Quinn clan from self-inflicted poverty, but also created a powerful family story about the need occasionally for frugality.
Let’s hope. I think they have many more fond memories of our adventures over the years on Cape Cod, even before we had a house.
As an aside to the financial discussion, I would suggest that the red arrows you see are perhaps less about the ideas you present than your style of presenting them.
You use the words “never the case” with regards to the feedback that you seem to be shoving your ideas. But that is the case if that’s how readers perceive it. If your audience has “at times misunderstood” your content, it is likely because you have misunderstood how it’s coming across. If your articles or comments tend to produce a visceral reaction of irritation in your readers, then your ideas will never land as you intend.
My suggestion would be to run your articles past another pair of eyes before posting. You might be surprised at some of the feedback you get, but trust it. Everybody needs an editor sometimes.
Perhaps your thoughts have already swung in this direction, because I found this article more accessible and pleasant to read than your previous writings.
Thank you. I would very much appreciate some examples and if you or anyone else would like to give specific feedback it would be most helpful. Here is my e-mail if you rather not post here. Rdquinn3@gmail.com
It seems I am criticized for “pushing my ideas” but my ideas have no more perhaps less weight than anyone else. I like to use as few words as possible to make a point. I tend to challenge assumptions, but isn’t that part of discussion?
In any case, sending some examples would helpful, just copy and paste a paragraph or so.
I believe all of us discount luck in our lives. But as we all know, you can’t count on it. It is sort of like dark matter-we know it’s there but we don’t know what the hell it is. I believe a good life is a combination of many things, but I know in my own life, luck has played a huge part.
From your description, it sounds like your long tenure and final years of exec compensation provided a significant margin of safety to your retirement plan. It might be interesting to evaluate the counterfactuals.
1) What if you had been forced to retire at 62 without the stock and exec compensation?
2) What if you started your career 30 years later? Would you have had the same opportunity for financial success with one company?
A lot of things could have derailed us and life would be different. As a matter of fact in 2005 we were in merger talks and I would have lost my job with two years severance, but the merger failed and I was promoted instead.
Who knows about 30 years later, depending on the industry perhaps. But so much else had changed. Just starting off with only a high school education is more difficult.
The point of the article is not just my story, but that there are always ways to achieve financial success, many different ways – and you don’t need to be an expert in planning. I know several blue collar union workers who have vacation homes and fishing boats obtained by working crazy overtime.
My opinion is that setting prudent financial priorities throughout life is essential and pays long term dividends. Our four children now in their 50s still remind us we never took them to Disneyworld – because we couldn’t afford it and charging such spending was never an option. From what I observe today, many people don’t think that way. I’m still wondering who paid to fill those seats at the World Series for $600 each per game and up.
This reads a lot like you had your own method of creating safe personal finance paths. You followed one of the absolute primary rules. You can’t have good personal finance without a plan to maximize free cash flow. The Millionaire Next Door details how many high income families fail because they don’t do this. And how many moderate to low income families can create excellent outcomes because they do.
Moral: not all educations are from books or mentors, some of it is intuitive and from looking at the world.
Exactly, thanks.
Sure you can do well regardless of sub optimal decisions. But I’d say that largely being thrifty, being fortunate with family health and being in the right generation has more than outweighed any sub optimal decisions you may have made.
And let’s face it if you’d worked for 30 years for a major company that failed to adapt it’s business model and tanked while failing to protect its pensions, and you’d struggled to get re-employed in your 50s you’d scarcely be here posting about your success. The bad luck version of you might have made all the same other decisions and worked just as hard.
Not undermining the core message that slow and steady wins the race. I hope not too many innocents are dragged into the FOMO instant reward of crypto bro returns in the current heady times and lose big time.
( Obviously making myself hostage to fortune if crypto never reverses)
Which generation is the right generation?
One too young to have seen war in a country least damaged and best positioned to boom in its aftermath seems a fair start.
But really it’s the wrong question. Which generations do you think are more or less fortunate than your own?
Not many people buying 2 houses on a single earner while fully funding 4 kids through private colleges these days.
Every generation has its up and downs, pluses and minuses, advantages and disadvantages. I don’t see that as an excuse. I was born in 1943, not many people in my generation though.
Not many people live as we did in a 80 year old house on a small lot with none of today’s assumed amenities. Not many families take short vacations saved for a year in advance and not spending a penny more. Not many making do with the least expensive car possible with four children or working two jobs most of their lives.
I’ll accept the absence of misfortune in our lives as an advantage, but when you get out of high school with no job, no skills and start as a mail clerk making minimum wage and go up from there over decades I think it fair to say it’s more than luck.
The opportunities today are amazing compared to past generations.
Two months after first dating my future wife and five months after my first promotion as a senior clerk in 1968 my national guard unit was activated for two years. I thought my life was over, but we made it. This generation has no worry about a military draft.
Things are different of course, but there are still ways to thrive with patience and setting priorities.
I fundamentally agree with you on your last paragraph.
And of course every generation has its challenges – avoiding combat in Vietnam was probably a piece of your fortune.
I believe a lot of behaviours are influenced by measurement against peers. Hence why “rich” people don’t recognise they are rich when everyone at the country club takes the same trips to the Bahamas or Aspen and maybe even drive a better German SUV.
So with rising living standards obviously the baseline for a “modest” lifestyle will change. Ask your grandkids if they’re ready to do laundry by hand to save more for their future.
It’s only ever with hindsight we know whether we’ve “won” the game. And with enlightenment/maturity to even know what the game really is. It certainly isn’t mere acquisition of financial resources or posessions.
Actually the good fortune was being on orders to Vietnam and at the last minute having them changed because my allergies prevented me from taking the required immunizations.
I think the notion of financial planning is to minimize the need for good fortune.
I agree, it should be but that requires good assumptions achieved over long periods of time as well with plenty of opportunity for misfortune along the way.
Good assumptions are the result of becoming educated about personal finance. How else does that happen?
Remember, learning via experience, is still learning.
I don’t think you really understand financial planning and the purpose of worst case scenarios.
My whole life has been trying to plan for worst case scenarios or as I call them “what ifs.” It was true while working, it was true nearing retirement and it is still true.
I have seen too many examples where that wasn’t true, including my parents and more retirees than I can count. If I have a financial fault it is more living for tomorrow than today, just ask my wife.