Before looking for a job, first find the companies in your industry who have a strong business model, then look for interesting roles. There are a lot of companies in the world with pretty abysmal businesses running on razor-thin margins. My experience was those are usually awful places to work where money often drives poor decisions and bad outcomes.
Then there are a very small number of companies which have developed strategic, durable businesses that are extraordinarily profitable and have wide, deep moats. Those employers are the ones who can afford to invest in you and can afford to do the right thing for customers. Their compensation tends to very good, perhaps not the best in the industry but very good. And very good rewards compounded over decades of work is a great way to build wealth in a high-confidence way, better than chasing some hot start-up.
Thanks for this comment, David. It’s an interesting way to look at job hunting when the first instinct is to go for the biggest paycheck. Money isn’t everything!
I am 48, so this is not a lookback post but rather a “what I am focused on post.”
First, I am invested in four real estate partnerships. I had been invested in five, but one was sold recently and I didn’t do the 1031 exchange that was offered. I was able to offset the capital gains (which were small relative to what stocks delivered in the same period) with losses on bond funds. As the other funds liquidate (which they should over the next 5-10 years) I will not re-invest so that I can have more liquidity and not have to deal with K-1s during tax season.
The second area where I am focused is on how I will eventually (and hopefully) draw down my savings. For the last 25+ years, I have been a diligent saver. I now recognize that saving and investing is the easier part of planning for retirement. I have seen some family members make costly mistakes in using their savings, and I know that if I am not careful I could make similarly costly mistakes. Some readers have shared how a Roth conversion could make sense. That’s definitely on my radar.
I am also looking at whether there are other retirement income strategies I can employ now that could limit my risk and make my financial life simpler later on. More research needed on this front….
If you have significant assets in a 401K account, switch your savings to a ROTH. This will help avoid a big tax bill during retirement. Also at the start of your career if your tax rate is lowish, contribute to a Roth instead of a regular 401 K
by switch I meant stop investing in the 401K and instead invest in a Roth. I did not mean convert. By making the switch in investing vehicles, you avoid the conversion later on.
I wish someone had told me I needed to circle my wagons because totally unknown to me, a divorce was on the way.
Before looking for a job, first find the companies in your industry who have a strong business model, then look for interesting roles. There are a lot of companies in the world with pretty abysmal businesses running on razor-thin margins. My experience was those are usually awful places to work where money often drives poor decisions and bad outcomes.
Then there are a very small number of companies which have developed strategic, durable businesses that are extraordinarily profitable and have wide, deep moats. Those employers are the ones who can afford to invest in you and can afford to do the right thing for customers. Their compensation tends to very good, perhaps not the best in the industry but very good. And very good rewards compounded over decades of work is a great way to build wealth in a high-confidence way, better than chasing some hot start-up.
Thanks for this comment, David. It’s an interesting way to look at job hunting when the first instinct is to go for the biggest paycheck. Money isn’t everything!
I am 48, so this is not a lookback post but rather a “what I am focused on post.”
First, I am invested in four real estate partnerships. I had been invested in five, but one was sold recently and I didn’t do the 1031 exchange that was offered. I was able to offset the capital gains (which were small relative to what stocks delivered in the same period) with losses on bond funds. As the other funds liquidate (which they should over the next 5-10 years) I will not re-invest so that I can have more liquidity and not have to deal with K-1s during tax season.
The second area where I am focused is on how I will eventually (and hopefully) draw down my savings. For the last 25+ years, I have been a diligent saver. I now recognize that saving and investing is the easier part of planning for retirement. I have seen some family members make costly mistakes in using their savings, and I know that if I am not careful I could make similarly costly mistakes. Some readers have shared how a Roth conversion could make sense. That’s definitely on my radar.
I am also looking at whether there are other retirement income strategies I can employ now that could limit my risk and make my financial life simpler later on. More research needed on this front….
Thank you for your insight, Kyle. I agree it’s critical to save but then we need a solid plan for what to do with it after the fact.
Stay out of debt!
Couldn’t have said it better myself Scott!
I wish I converted my tradiontal IRA’s to ROTH’s as we were given a five year period (ie 20% of tax paid on a yearly basis for 5 years)
Interesting, I’ll have to take a look at this. Thanks for the input Bill.
If you have significant assets in a 401K account, switch your savings to a ROTH. This will help avoid a big tax bill during retirement. Also at the start of your career if your tax rate is lowish, contribute to a Roth instead of a regular 401 K
I hadn’t thought of this Jackie, thank you!
Significant assets also means significant taxes paid at the switch.
by switch I meant stop investing in the 401K and instead invest in a Roth. I did not mean convert. By making the switch in investing vehicles, you avoid the conversion later on.
The advice I was given and I followed to maximize my 401k contribution and to go 100% into stocks.
I love this advice Nick – even though 100% stocks is terrifying to think about I have to remember I’m playing the long game.