Do you ever wish you could go back in time? Ah, how younger Dave would have avoided a great many mistakes. Of course, mistakes are often how we learn. It’s how we grow as people, figure out what we like and dislike.
Still, a part of me would love to go back and impart upon my younger self a few tidbits of wisdom I’ve gained over my 30 year existence. I’ve come up with a list of 20 things I wish I’d known (or done) in my 20’s or sooner:
- Save money now, because you’ll definitely want it later. I wish I had maxed out my Roth IRA every year. When I first started it I put some money into it, but I’d been pretty bad on contributing to it since then. I could have easily maxed it out every year. That’s a huge amount of growth between 2010 and today that I lost out on. On the bright side, we paid cash for our wedding – so at least I had a little bit of sense in me!
- Have a roommate for as long as you can. When I graduated, I lived with a college friend. We had a nice 2-bedroom place that was close to work. He wanted to be closer to downtown, so once our year was up he decided to move. I, however, did not; I inherited a 2-bedroom apartment and stayed in it. Having the extra space was nice since I had a room to use as an office, but it cost me about $10k probably to do it.
- Making a decision for a selfish reason is okay. Many of my life decisions have been selfish, but none of them have been easy. I’ve beaten myself up over some things and disappointed people that are important to me. But I shouldn’t have. It’s okay to make decisions for a selfish reason sometimes. You’re the one that has to live with your decision – or indecision. And sometimes that means disappointing people. You shouldn’t feel bad about that if it’s what is right for you.
- Don’t commit to things without thinking it through. I’ve talked before about my decision to go to Vegas. That backfired horribly. If something is worth doing, it’s worth thinking about – especially sober.
- Biking to work is a viable alternative. If the distance is too far, you can move. When my old car finally bit the dust, I quickly found another to replace it. But I only lived about a 5 minute walk from the store and probably a 20 minute bike ride to work. I should have invested in a good bike instead of a car, and saved myself a ton of money.
- Check out the interest rates. Speaking of that car, I got a super crappy interest rate on it because of my credit card debt I had. I didn’t care, and didn’t realize what that cost me. Negotiating rates wasn’t something I even knew was possible at the time.
- Just contributing the company match to a 401(k) is a bad idea. Unless you have a stellar match – for example, Microsoft matches 50% of every dollar you contribute – most plans will auto-enroll you around their matching limit. This means that, while you’re using their 401(k), you only are probably putting in 3-8%. When I graduated my income had an exponential increase. If I had been smart, I’d have maxed it out and lived like the poor college student I was used to living as.
- Credit cards aren’t free money. Future Dave doesn’t want to deal with Current Dave’s stupid decisions. The end.
- Not going out to eat doesn’t make you lame, it makes you rich. And I went out to eat quite a bit – especially lunches. Drinks at lunch add up real quick, too.
- Index funds are the bees knees. In my first few investments I picked specific stocks. Thankfully they generally performed good, but it took research on my part, and honestly was more akin to gambling. I wish I’d known about index funds when I started my Roth IRA and brokerage accounts.
- There’s no such thing as reading too much. I used to play a ton of video games. Like, a lot. I enjoyed reading but I always felt like I was wasting my time if I’d read more than a few hours a week. There are so many great books out there – both fiction and non-fiction – that I wish I’d have read earlier.
- Don’t give up on something just because you don’t gain immediate traction. True story: I used to have a personal finance blog back in 2008. I wrote a few posts, but it didn’t go anywhere. After about three weeks of nobody reading, I got discouraged and quit. I often think about how “My Two Cents” would have panned out if I’d stuck with it. How much different would my entire life have been if I’d followed through with it? It’s bizarre to think about, but I’m still overall happy with where I am right now.
- Ask others for help. When I was just finishing up high school, I ran the most popular Call of Duty fan site on the internet (a story I’ll get into in little bit more in a couple weeks). Eventually it got too big for me to keep up with the cost of hosting. I got hooked up with a few other players who, ultimately, stole the site from under me. I should have consulted with my parents immediately, but was too stubborn to do so. Looking back, I could have monetized that site to the tune of probably $5-6k a month with relative ease.
- Always ask for more than your target salary. Never be afraid to ask for a raise. My income has grown respectably, but I’d always been afraid to ask for more money. When I did, I’d ask for exactly what I wanted and was disappointed when I didn’t get it – even if I had gotten a raise still. And remember, purple squirrels can ask for more than regular squirrels.
- Know what your next move is. I went for a few years in my mid 20’s without really knowing what I wanted out of my career. That’s probably relatively normal, but it definitely held me back to a degree. By knowing what you want to pursue next you can make sure that every action you take brings you closer to that goal.
- The Joneses are broke. Keeping up with them is futile. Even if everyone says it’s keeping up with the Joneses, the reality is that people are trying to OUTDO the Joneses. And that means spending more money than your neighbors, who then spend more than you, which prompts you to spend more…and the vicious cycle continues. It leaves everyone but the disgustingly affluent folks broke.
- Enroll in your company’s ESPP and sell the stock when you can. Then reinvest it. Employee stock purchase plans are a great way to purchase stock since you will typically get a discount or bonus shares. But having too many eggs in one basket (a fair chunk of your net worth and your income) isn’t a good idea.
- Not enough cash is a bad thing. It caused me to use credit cards when I “needed” to buy beer, among other stupid things. Always having a cash buffer would have saved me a ton of money on interest.
- On the other side of the coin, too much cash is a bad thing. I’d sit on waaay too much cash for a single person with low expenses. Investing should have been my number one priority, but I hoarded cash instead. Ultimately it mostly would end up getting spent.
- Everything comes with a lesson. Because that’s just what happens. Sure, you go through life and you make mistakes. Look back on your life, pull out the good pieces of wisdom, and use that to guide your future. There’s always a lesson to glean, and things have a tendency to work themselves out if you’re patient enough and put in some effort.
This list definitely isn’t comprehensive, and I know that my younger self probably wouldn’t have listened to half of it anyway.
There are no redo’s – just the hope that this list is read by someone younger than me who can avoid some of the mistakes I’ve made.
What’s one thing you wish you could tell your younger self?