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June 05, 2009


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1. Me too --- my career!

'Way back when I was in my 20's, I decided to go back to school so I would have a chance of moving on up. My parents thought I was insane---why couldn't I just get married and let him support me while I worked at low paying pink collar jobs until I had children? 20 yrs later, I'm blessed to have a viable, high paying career. Which helped especially when my husband left with one of his students!

2. Bought a cheap house and didn't trade up.

In 1996 (when I was still married), we were looking to purchase our first home. My RE agent looked at our salaries and said that we could easily afford to buy a home 3X the cost of the one we eventually purchased. 2 kids and 1 divorce later, I still have that house, recently refi'd at 80K for 4.5% fixed. It will be paid off before the kids go to college. My ex, on the other hand, bought a >500K McMansion in 2006 with no money down with results you can predict. So happy I didn't fall for that cotton candy!

3. I live in an inexpensive (but boring) part of the country because of my job.

1. Changing careers to match my degree when I hit rock bottom. I had gone into one field in the hopes of taking over the business, but that did not pan out and I was out of a job. I ended up deciding I needed to use my degree instead of hoping to take over someone else's business. That action has nearly doubled my salary.

2. Renting rooms in my house. I have had problems, but the benefits have far outweighed the problems. The extra income has helped during the rough times and have taught me and my wife many things.

3. Blogging & Reading PF Blogs. That experience has taught me so much more than I learned from my parents about finances.

1) Living at home during college and going on scholarship.

2) Paying cash for my gently used new cars.

3) Investing 15% of my gross income for retirement since I was able to work.

1) Getting my MBA and managing my career
2) Saving from day 1 after graduating from undergrad. Any lump sums (signing bonus, relocation) immediately went into savings. Signed up for 401k right away, always contributed to IRA, and even began putting aside college savings before kids were in the picture.
3) Real esate (personal). Bought a house early on from an elderly couple, lived there for a couple of years, updated it, and sold for a good profit (despite the market going down). Did that again, and then had a significant amount of money to buy a really nice house that we can stay in for a long time in "the" neighborhood. Was able to put a large chunk of change down and have a manageable monthly payment.


I also lucked into a very well paying career (and especially in demand in N.America where the profession isn't taught), but have realized since I started reading moneyblogs that my "home run" was being born Irish - no student loans (taxpayer-paid education), a passport that allows me to work abroad with relative ease, credit cards were impossible to get as a student, none of my peers had cars until they started their real jobs at the earliest, etc. The latter two may have changed recently but a lot of financial headaches others seem to be in were just never an option for me as I started adult life with zero debts and savings in the bank.

1. Realizing I can't work for anyone else when I was 23 (a very long time ago) and going into business for myself.
2. Marrying my wife.
3. Living well below my means.

1. Getting married and buying our first house a few years out of college (5% down w/ a 5/1 ARM that would make people shudder nowadays) and selling it 4 years later at the peak of the housing bubble. We realized a ROI of over 1000%. With one small decision we essentially wiped out all our debt and gave ourselves enough of a monetary buffer to never need to worry about money again.

2. Wisely investing our profits while building our careers.

3. Continuing to save and invest 30%-40% of our salaries annually.

1. Recognizing a ridiculous debt and credit bubble in 2005.

2. Getting out of the stock market 100% in 2006 (yes a little early, but as Buffett says, I got rich by selling early).

3. Shorting financials and commercial real estate all the way down.

I have always saved a ton of money and lived frugally so I already had a sizable nest egg by 2006, but recognizing a massive bubble AND doing something about it has put me 10-15 years ahead of schedule. The people who say "Buy and hold index funds" are better off than the average sheeple, but they're still sheeple.

This is not my advice but that of a doctor with whom I work. It's not three home runs but it would definetly help load the bases..."One spouse, one house..."

1) Working hard at school, college, and graduate school to get a great job in engineering that lasted until retirement in 1992. A happy marriage of 53 years to my childhood sweetheart.

2) Riding the bubble up, realizing the rate of increase was unsustainable, and getting completely out in the four market days after the top.

3) Using software I wrote myself after retiring and marketed to a lot of other investors to produce market indicators that showed me the market was an outright SELL in November 2007, and getting completely out into the safety of CDs and individual municipal bonds. I was also ready to stop trading because I was paying too much in taxes partly because of the very large, mandatory, IRA distributions that hit you after you reach 70 1/2.

Only buying what we needed and not trying to keep upwith the Jones's has made us totally secure financially. Let's also not forget TIMING & LUCK, I worked from 1956 - 1992 which because of the Cold War happened to be a great period of full employment and nice raises in the aerospace industry. I also never had to disrupt my employment for military service.

1. Going to college on a full scholarship rather than going to a higher profile school and taking on debt.
2. Marrying my wife (same reasoning as you exactly).
3. Starting a business--never expected it would grow like it did.

1) Having a mentor to guide you through the process of finance/investing.
2) Started reading Kiplingers magazine at age 16.
3) Bought my first stock at age 18.

1. Starting saving early (my dad convinced me to have IRA at age 16)
2. Not over-reaching for our house purchase
3. Maxing out retirement vehicles

1. Joining the National Guard to pay for school. Helped me graduate with no student loan debt. Plan sort of backfired when I was deployed, but being deployed also helped us boost our savings and pay for my Lasik surgery.

2. Choosing Finance as my major. Helped me get into my profession and be knowledgable about investing and personal finance.

3. Also marrying the super wife. My wife cringes at the thought of debt and is more anal about saving that I. That has helped us amass a good chunk in savings, no credit card or student loan debt, and investing heavily into our retirement accounts each year.

#1 - My career. By far my biggest single financial success. Without my job I wouldn't have been able to afford #2,3.

#2 - Buying my home. I bought my house 10 years ago and its appreciated quite a bit even considering the drop in market in the past couple years.

#3 - Buying rental properties. I've got some rental properties too which have appreciated in value and given me some rental income.

1. Marrying the right woman and skipping the messy divorces.
2. Having my employer pay every penny for all three of my college degrees.
3. Investing in a Roth IRA and 401-k from the first day on the job.

1. Buying a modest house on a 15 year note. This has allowed me to live worry free while my friends stress about their McMansions which will never be paid off.

2. Starting my own business

3. Marrying someone who works hard and spends little just like me!

1) keeping spending low. The only things we've ever financed were 2 modest cars, and we paid each off within a year. Our spending as a whole is about the same as it was when we were in grad school, despite a huge spike in income. We keep our discretionary/fun spending low, but get a good bang for our buck.

2) recognizing the housing/credit bubble in about '06 and keeping our money in a liquid (money market) fund, and then moving a large chunk into the stock market right as it was hitting 12-year lows. This has led to some big short-term gains, and more importantly, kept us away from big losses.

3) setting priorities. We know what we want to accomplish with our money -- buying a house, raising kids, stable retirement, etc. -- and we've invested our money and aligned our careers with our goals. My decision to raise the kids freed my wife up to really pursue her career, and she's far better suited to that world than me.

1) Selling my house at the peak of the real estate market for 3 times what I paid for it
2) Going on an international assignment for my company for 2 years. Living as an expat was professionally and financially rewarding. Since the company paid for all living expenses, every dollar of my salary for the two years went into savings.
3) Living way beyond my means. I always made it a point to save at least 50% of my salary.

1. Going to college
2. Going to college
3. Going to college


My real 2 and 3 are...
2. Having parents that taught me about the peril of going into debt
3. Getting a job early in life and learning the benefits of working hard & saving money

I agree with Guiness: my "home run" was being raised in Europe, where people have a healthy savings rate (like the US 20 years ago). Credit card debt is frowned upon (think gambling addiction). Heck, when my employer organized a workshop to recruit for its credit card department (aka 'Consumer Finance'), there was a real debate among employees about whether such business isn't immoral. Although, as with everything, culture has been catching up with the US. Why do you think my employer wanted to expand the Consumer Finance department... For me, credit card debt is a tax on the stupid, just like the lottery.

I agree with "F" and "Guiness", being raised in Europe helped a lot in my ability to manage money.
My wife and I were raised in England during WWII, there was no choice then other than being frugal and with parents that were great role models we learned lessons that have carried forward to this day. Frugality is a nigh impossible habit to break after decades of practicing it however there is no greater feeling of security than being wealthy. Now we live in the midst of the formerly "Want All" generation in the mecca for High Tech and are watching them cope with adversity for a change. It's an eye opener to see their inability to manage their finances after being used to spending every penny they make, and then some. The other tax on the stupid that you didn't mention is buying lottery tickets regularly.

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