Wednesday, July 16, 2008

My Best Money Decisions

In hindsight, here are some of the decisions and actions that I think helped us achieve our personal finance goals:
  • Marrying my wife. Personal finance success is a team accomplishment. If everyone in the family isn't working towards the goal, then it may be hard to achieve. Fortunately, my wife and I have equivalent views on personal finance. In many areas, we are the same, e.g. buying what we need, getting a degree that leads to a job, and avoiding debt.

    The reason I said equivalent is that we are not the same in every aspect. There are areas when I spend more than she would and vice versa. Also, I am a trader of stocks, while she prefers to buy and hold.

  • Working for a good company. I was fortunate to work for an excellent company from graduation until I retired in my forties. The retirement savings was based entirely on company stock, which has done very well, so far (knock on wood). In addition, as a retiree, my family is covered by the same health plan as employees, although for a higher cost.

  • Paying ourselves first. Once we figure out that is was important to pay ourselves first, our savings grew and kept growing. It also helped us establish a discipline of buying only what we need.

  • Avoiding debt. The only debt we have carried are a mortgage, a car loan and a student. We have paid off our student loans and car loans a long time ago. We now only have a mortgage, which we are targeting to pay off in 15 years.

    While we do use credit cards, we pay them in full every month.

  • Conservative investments. Preserving capital can be as important good earnings in volatile markets. While working, our main goal was to invest in options that had good preservation of capital. This approach helped us avoid major losses during declines such as the technology stock bear market.
  • Of course, one never knows if a decision is a good one until long after the fact and there is probably an element of luck involved in each one of these.

    For more on The Practice of Personal Finance , check back every Wednesday for a new segment.

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2008 Achievement Catalyst, LLC

    1 comment:

    Anonymous said...

    Great read! I can't disagree with any of them (obviously substituiting my wife for me :).

    Best Wishes,