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Best: Choosing a retirement we could afford in South America.
Along with that, living below our means prior to retirement, by living in a mobile home rather than build that dream home; which was a 10-yr. blow to my ego, but I survived. Ending up with no debt or mortgage.
This seems like a fascinating story. Have you told the details anywhere here? (Sorry, new around here)
To answer the OPs question:
1. As posted above by Blondebaerde, buying our house when there's "blood in the streets".
2. Paying said house on the shortest loan period we could manage.
3. Maxing (to the extent possible) IRA/401K etc. contributions for decades.
4. Living waaaay below our means* for most of our first decade of marriage to get a head start.
5. Spending extra years getting our degrees so we could pay for them with no debt.
*We lived like the extreme FIRE people for a decade, only it was to pay for school and to invest -- not to retire early.
Avoid form, choose function. This includes relationships. Choose to develop relationships with solution minded people. Hang out with creative and problem solving people who are not swayed by trends, popularity, or things that sparkle.
Resisting job hopping always dreaming of some nirvana earning situation. Sticking with stable jobs that had good benefits and retirement plans even though they had temporary frustrating ups and downs for me personally.
Keeping the long term view with investments and not panicking over the knee jerk fiscal idiocies markets make from day to day. I might not be making top dollar percentages on them but I am not lying awake agonizing over risk either.
Buying the house that satisfies me, not the house that satisfies others.
Not chasing "miracle" schemes. There's no free lunch.
Hi,
This is a general question which I always wanted to ask for people who have retired or have enough to retire.
What was the best or worse financial decision you took in your life which eventually helped your retirement?
This is more like a lesson for someone like me who is looking as to what are few financial things needs to be done which will decide our retirement.
TIA
Designing and using the "Wedding Cake" financial model.
Long term investments form the bottom level and is equal to 10 years income.
Money market funds form the second level and are equal to 6 months income. Extra goes to Bottom level.
Monthly needs form the top layer and is equal to 1 month.
All our income (ALL!) has gone into money market funds (the 2nd level)
On the 1st, we transfer what we will need for that month to the checking accounts.
Long term investments like real estate and other investments have never been touched.
This system saved our bacon. When our income suffered because of employment difficulties and changes, our standard of living did not. When we got close to retirement we adjusted our monthly income to reflect what we would have after retirement.
Our retirement was seamless. We live off about 80% of cash flow. Retired in 2010.
I have made some really smart financial decisions in my life.
One was to jump on a career that offers a 20-year pension, and then I had to force myself to stay with that horrible career. But I got the pension.
I married an accountant, she has been really good at managing our investments for me.
We have never had a mortgage on any house just for us. My salary income has never paid for any of our homes. Each home that we have had mortgages on have all been Multi-Family-Residences, where the rental income covered the mortgage, taxes, insurance, and repairs. Then when I retired, the money we made selling those properties rolled-over and paid for our retirement farm in full.
It's nice, hanging out with a bunch of smart people. Give yourselves a hand.
I don't think I've ever made any good financial decisions. I mean, I bought a condo and cleared $125k when I sold it 9 years later. But then, wanting to become my own boss, I sunk that money into an untested business model and lost it all. It was the dot-com era, when a lot of people did essentially the same thing.
If you intend to enter retirement as part of a couple, you must find someone who will have your back in every situation. Someone whose eyes light up when you enter a room. Someone who is an unabashed fan of YOU. I've spent 45 years as an adult trying to find that person. It never happened. But you must have this person because retirement is a crucible. Some marriages don't survive it, especially those built on lies and self-deception. Or the ones that endured over decades mostly because you only spent a few hours a day together.
There are some great stories and if I had to pick one for myself and wife, it would be getting educated to allow my career would be number one. Second would be investing in our (wife and I) 401K's. Third would be buying 3 houses in Phoenix area after the market crashed when people were panicked.
The best thing I did was years ago when the market was down and I had left a job, was to covert my retirement account to a Roth IRA. It has been growing tax free ever sonxe.
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