Since we're coming up on that time of year when we plan resolutions and reflect on the past year, I thought this would be an opportune time to discuss a few things I wish I did differently, and what I'm glad I didn't.
You see, if everyone talks about all the great decisions they made, that can make readers and younger FIers envious or skeptical that it's really that easy.
But we have to be human and show our vulnerable side because that's what connects us, and what allows the new generation to learn what not to do, or what not to worry about.
I graduated college a year early, in 2010. I thought I was doing all the right and mature things, because I graduated with no student loans, and a month after graduation helped my parents score a screaming deal on their dream house.
Part of the reason I graduated early was that I told myself I needed to figure out my life before everyone else graduated and I felt pressured to find a grown-up job.
I figured even if I wasn't working or earning an income during those 9 months, it was still better than being a student because I wasn't spending money on tuition, books, or commuting. I could freely explore my interests while I lived at home, and it was one of the best and most liberating times in my life.
Dental school was on my radar, and I was supposed to start studying for the DAT that summer. To make some spending money, I signed up to be a substitute teacher.
Before you laugh, I didn't do it for the money (even though it was the middle of the recession and hard enough to find a good-paying gig). I did it because I thought it would be fun to be a 21-year-old "teacher" to 18-year-old high school seniors and just live out that dream of seeing subs when I was a kid living the high life.
All the kids treated subs like royalty because they knew it would be an easy day in class and they could bend the rules. Plus it gave me time to study and research.
So what are these 3 things I wish I had done differently in the last decade that could have completely changed my life for the better?
Investing in Index Funds
As I write this and look back at my ambitious 21-year-old self, I'm amazed at how mature I was and then wonder what happened.
A few months after I graduated college, I convinced the professor at our local community college to let me sit in the class, and basically audit it. I never took a class on investing and didn't know anything about personal finance. I learned a good deal in that class, and the following year opened up a brokerage account.
I invested in the SPY ETF, yet whenever I put more money in, my young confident self thought I could time the market like any day trader, so I bought individual stocks and then sat in cash for long periods of time because I thought the market was at all-time highs.
All-time highs in 2015! Yes, anyone looking at market returns since then, would know that was not the bottom of the market by any means.
Had I just taken the advice of my investing class professor or the first personal finance book I read (affiliate link), I would have been in a much better position.
On top of that, I didn't start maxing out my 401k until I was 26, because I thought I should save more to put a down payment on a house since that was a nearer-term goal. More on that is below.
Luckily, in my first job, a colleague told me to max out my Roth IRA, since it was only a few thousand dollars a year. That is one silver lining in all this.
Lesson: Time is your greatest asset, both in life and in investing. When you are in your early 20s, it's ok to play around with stocks with burn money, but your real savings should be going into passive index funds, and then let the magic of the market work for you.
Buying a House
Remember how I said I helped my parents buy their dream home in 2010? I don't know how I was smart enough to recognize that it was a great time to buy when the housing market had crashed, but it was a great decision.
I knew my parents wanted a little bit of a larger home, and a newer one. I also selfishly wanted my own bathroom and a house in that I could entertain friends.
Thankfully, we had an amazing real estate agent who made it all happen. The house was built just 5 years prior but had never been lived in. There were no holes in the walls or footprints of furniture because the previous owners lived in Silicon Valley and hoped to retire there. Then they foreclosed on it and we bought it from the bank.
Want to know a secret? After I audited that investing class, I also sat in on a real estate licensing class. I almost signed up, but the number of people in that class and the boring topics of disclosure quickly bored me into doing something else.
Yet when it came to my own home purchase, I figured I should wait to have 20% down and then buy it. I also had commission-only income until 2014, and even though I did well for my age, my realtor said it would be hard to qualify.
I also thought I wanted to live at home and pay nothing to save more money, and then move to a city and live the urban life for a while.
Not only that, I still have the email from my realtor from 2013, telling me it was now a "sellers" market and homes were going above asking. This lasted ever since, even when I moved to Denver.
Had I just bought a home in 2011 or 2012 instead of waiting for the next "market bottom", it could have almost tripled in value. We may never have price appreciation like we've seen the last 10 years (especially since 2020) but I guess anything is possible in the future.
Creative Work Like YouTube
Ok, maybe this one is a bit of wishful thinking, yet I can't help but wonder how I missed the boat on this. I used to watch YouTube a lot on my laptop but didn't think people made serious money off of it and didn't even pay attention to subscribers.
It wasn't until 2018 that I saw a video of a comedian who had been putting up videos for a while, making videos in a much nicer house suddenly, and you could tell it was his new house.
Then I saw a video around FIRE, this guy who has been making videos for about 3 years said he brings in almost $10k a month on YouTube.
I figured I'm more comfortable writing than being in front of the camera, so I went with blogging and writing a book.
How to Make Money in 2023
So where does this leave us?
It's clear 2023 is going to be an interesting year. Home prices have not been keeping up with incomes for a while, and interest rate hikes are putting them more out of reach. Homes in my neighborhood that went for $300k 10 years ago have gone up to $1 million.
I know for me, I'm going to work harder to grow my side hustle as I've already automated much of it, making it passive.
I'm also going to be ready to buy a place if the 20% price crash estimate is true.
Finally, I'm planning to either start or buy another business, because living away from California showed me how much California is missing out on, and I hope to bring some awesomeness here and hopefully profit from it. Stay tuned.
So yes, I would be a millionaire by now if I just followed the right advice 10 years ago. But I learned some good lessons. I had fun. I failed, and I came back.
I'm close to a million now, but the more important thing is when I make it there, I won't let it get to my head thinking it was all that easy. I'll know there was a lot of luck to go with that discipline!