Investing is a journey much like human life and I can’t write about anyone’s journey but my own so here’s how I did things and would do things differently for every age period.
The 20’s
How I lived it:
I paid my own way thru college and graduated with student loans that were the bane of my younger years and hampered my ability to invest more money at a younger age. To compound my money problems, I got married at 26 and had my first kid a year later then another not too long after further increasing my expenses. On the positive note, the marriage and kids forced me to buy a home when I was young and homes were more affordable than they were years later.
What I would do different:
I largely missed out on the “dot com” stock boom because I had too many expenses and could not save a lot of money but in retrospect it was a good thing because I was fully invested in real estate than would grow tremendously over the life I owned it. What I would tell any 20 year old right now is to invest in an affordable home as soon as you can. You can always turn this home into a rental property at some point in the future if you move or get married. Alternatively, if real estate is out of reach, right now is a great time to save and earn 5 percent or more on your savings, over the last 14 years, paid interest was near 0 percent so it literally pays to save right now.
The 30’s
How I lived it:
Having had a bad experience with student loan albatross, I learned to borrow money from those zero percent credit card offers to lower my interest rate (was once at 7 percent) to zero percent and pay off my student loans. I ended up using the “zero percent for 12 or 18 months” credit card offers to lower the interest rate and pay off my mortgage by the time I was 35. Our mortgage and student loans were all paid off in 10 years!
What I would do different:
After I paid off my mortgage and student loans, I had several opportunities to buy additional real estate properties. At the time, I worked for a company that had me travel to Austin, TX every other month to do some work and I had plenty of opportunities to buy property in that town when homes were cheap. What prevented me from doing so was the imagined hassle of dealing with tenants and I was not aware that I could hire a property management company to do all the work for me and just send me the checks! What we did do with the extra money was travel all over the world with my wife and kids and in retrospect, we probably should have save a bit more money but have no real regrets because I have fond memories of all the places we visited.
The 40’s
How I lived it:
These are peak earning years and while I was making a ton of money, it took a serious toll on me. I had to travel all over the world for work and there were nights I would wake up in a hotel room and not remember what city I was in: Phoenix? Denver? London? Dallas? Seattle? Singapore? Mumbai? I maxed my 401k and invested money in the company stock too. I also finally got around to buying more real estate including rental property to diversify my portfolio to include stocks, real estate, and cash savings.
What I would do different:
The only real regret I have is that I spent too much time away from my family. Virtually all high paying jobs require a lot out of you and most require you to travel on behalf of the company often to places on different continents than the one you call home. While I had plenty of money, I often felt I had very little free time of my own. If I could do it again, I would find a way to change this somehow.
The 50’s
How I am LIVING it:
It amazes me to say this but I recently started my 50s and while I continue to rake in the big bucks, I am happy to say that I have a work from home job now and have had it for a few years but we are also now empty-nesters as our kids have grown up and moved on to lives of their own. I continue to diversify my portfolio and the current high yield in bonds has me loading up the truck with 5, 10 and 20 year Treasury bonds all paying 5 percent or more.
My investment portfolio includes:
- Diversified dividend stocks that will generate income when I retire
- Real Estate rental properties that will generate income when I retire
- Bond portfolio that will generate interest income when I reitre
- Cash savings for emergencies
- Precious metals for roughage
My advice for people in their 20s
- Buy real estate home as soon as you can
- Invest in an index fund such as S&P 500 as soon as you can
- Buy some high yielding bonds now if you can because these high rates won’t be around forever.
- Don’t worry, be happy….everything will turn out fine eventually.