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Kindly Compounding

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AUTHOR: SCao on 2/02/2025

We all have our own journey of discovering finance literacy. Some of us may be fortunate to be raised in a financial literate family, either immediate or extended one; while some of us may learn the hard and expensive way, by making financial mistakes.  I learn about being frugal and working hard to better our own life from my parents, who both never had the chance to finish middle school growing up in a rural area in China back in 1950’s.

As recently as several years ago in term of financial literacy for personal investment, I mistakenly thought I was quite educated already, as I had a double major in economics in college and obtained an MBA in the evenings while working full time and supporting a growing young family. That ignorance led me make a about six digits buying of a long time well known industrial company stock several years ago. The key reason for me to pick this particular stock was because the company had a famous CEO with many positive press coverages when I was in college in early 2000’s.  Needless to say, I had no clue what I was doing, and as the luck had it, the stock lost close to 50% in the next couple years. Thankfully, I did not need to sell during this time to avoid realizing the loss. After holding the position for about three years and the company cycled through a couple more CEOs, the stock turned around. Even though I had a modest capital gain after liquidating this stock, I would have done much better if simply just invested in the total U.S stock index fund, with significant less mental stress and better sleep quality.

During those couple years of darkness, I started to read and learn about personal finance.  Through those self-learnings, I found some good news: I realized how lucky I was to follow a college professor’s advice to start contributing for the 401K the day I became eligible for at least up to the level of fully capture the employer’s match; Also, I started saving consistently using 529 Plan for both kids when they were very little. Meanwhile, there was also a bad news: I only got to open Roth IRAs with Vanguard for myself and my wife from the self-learning. Hey, better late than never, even though I wish I opened Roth IRAs when I was much younger.

Through my journey of self-learning, I came across HumbleDollar.com one day.  I cannot thank Jonathan and all other writers enough for sharing financial knowledge and life wisdom. Among many things I learned, I gain the most appreciation for the rule of 72 and using low cost diversified index funds. Above all, I realize the compounding not only works for finance, but in human kindness. Jonathan pays it forward with founding of the site and collaborates with many kindred spirits with aim to make us become more informed individual investors. In addition, I become a big believer of Bogelheads investment philosophy.

As a famous quote says, “You only live once, but if you do it right, once is enough.” Let’s all celebrate the journey we have already undertaken, with all its twist and turns.  For the road ahead, no matter how many months or years remaining, let our kindness compound and pay it forward.

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phenomenal8f6ba2e774

SCao, a very thoughtful and gracious forum entry. Like you we have some investing (and spending) mistakes, but we are trying to take our knowledge now to help younger family members by, for example, funding Roths for working teens and 20-somethings to at least give them a head start on retirement. We use the occasion to talk about financial planning and compound interest, hopefully something they will appreciate down the road though it’s pretty abstruse this early for the teens.

Larry Hoel
5 days ago

Thank you for your opened about your journey. I believe it relates to the silent majority of HD readers. While I appreciate all HD contributions, Many feel “over my head” as far as knowledge and their financial situations. But I always try to remember that life is not about perfection, but progress.

Marjorie Kondrack
7 days ago

You’re doing great, SCao. And I echo others in encouraging your writing.

Regarding your quote about life, I’ve often thought that one life is just not enough for me. I just yearn for more time than what one life offers. There’s just so much to learn and experience.

Along those lines, I have a magnet on my fridge that says “Too Much of a Good Thing is Wonderful.”

Jeff Bond
8 days ago

SCao – welcome, and please keep writing! This is a great summary. I’m sure all the HD readers can identify with some facet of your story.

baldscreen
8 days ago

SCao, I loved your story, it was very inspiring to me, and I could relate to so much of what you wrote. Chris

Edmund Marsh
8 days ago

Thank you for sharing your inspiring story!

luvtoride44afe9eb1e
8 days ago

Thanks for the honest, heartfelt post. It’s nice to hear about the mistakes and learning experiences of others. An yes, this site certainly pays knowledge and kindness forward. All the best!

Rick Connor
8 days ago

Welcome to HD, and thanks for a very nice post.

Dan Smith
8 days ago

What a great post. Most everyone here learned from mistakes. Love the idea of compounding kindness.

Jonathan Clements
Admin
8 days ago

Thanks for your first post to the Forum–and it’s great to have you as part of the HumbleDollar community. I’m sure many readers can relate to your initial missteps, and to how it took some time to find the right path forward.

David Powell
7 days ago

Oh boy, can we ever relate.

Last edited 7 days ago by David Powell

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