10 Decisions I Might Change to Get Me to FI Faster
Hindsight is always 20/20.
My sister and I (who are in our 30s) recently sat down with our 22 year old sister to talk about finances and lessons learned. This got me thinking about some of the things I would change if I could to get me to financial independence faster. Of course, these are nice to think about and perhaps if I really did come across a time machine, I may change one or two decisions, but I do have to also say that the decisions we make get us to a certain point in our lives and we just need to learn and let live.
For those young enough though, time is on your hands and perhaps these can help you with some of the decisions you are about to make. Of course, there's no guarantee in all of the decisions that we make, but as long as we make them with sound judgement given the information we have at that point in time, we can't regret them.
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Invest in the stock market early
My first job in high school was working concession at a movie theater. I worked 4 days a week, all weekend (Friday night, Saturday night and Sunday day) and Tuesday night. I didn’t hang out during weekends, instead I worked. I made decent money for a high schooler considering working concessions had an added perk of being able to increase your hourly wage through candy upsells. Yup, each time I suggested Sour Patch Kids or Crunch a Bunch was an opportunity for me to increase my hourly earnings via a tiered system that was in place. I used the money I earned from that job to pay for my shopping habit, prom and eventually my books and outings freshmen year and a summer class after my first year. Had I known I could have invested in the stock market through an IRA earlier, perhaps, I could have a more sizeable investment account today.
I would highly consider if you have earned income to open an IRA today. Check out Ally Invest to open an IRA, Swell Investing if you want to be a socially conscious investor or WealthSimple for a more automated way to invest. Btw, you don't have to be an expert to invest. Think long-term and invest in low-cost index funds.
Apply to scholarships more
I admittedly was lazy in high school. I knew scholarships were important, but not in the way I think they are as important today. Had someone sat me down and told me about creating a system for how to apply for scholarships or where to look for scholarships or how scholarships would help reduce my college debt, I would have been more apt to be more diligent in submitting applications.
The tragedy with student loan debt is that it creeps up and adds up on you. Student loan debt can kill your savings rate quickly. It's best to reduce this debt as quickly as possible so that you can open more doors for yourself and more freedom. Don't limit yourself to traditional scholarships. Ask around. See if your parent's workplace, credit union, etc. have scholarships. If you are employed, check to see if your employer has one. The options are endless, you just have to be willing to look and spend the effort to apply. The effort to apply isn't also that hard once you build a system in place that will allow you to reuse essays and streamline the information that you need. Looking back, knowing what I know today, I would have challenged myself to apply to one scholarship a week for a year and see how I netted out. Would you be up for that challenge?
Leave college early
I came into college with a few credits from AP classes which meant I was able to meet some of my class requirements early on. I was able to finish my first major early which is why I decided to take on another major. I can’t regret taking on my second major as this is the the one that fast tracked me into the world of tech, but in hindsight, I wonder if I could have been more efficient in the classes I took and leave college early. I bs a little bit with a minor too so perhaps I could have optimized my classes a bit more. I would also consider testing to place out of certain classes especially if you know the content or can read up on it fast. This can eliminate classes early on that may be too remedial and costly.
I had known of a classmate who left after 3 years after finishing a B.S. in Math. I was surprised at this decision and frankly at the time could not fathom the idea of leaving school early and perhaps missing out. Interestingly enough, at that time we balked at people finishing college early, but not at people finishing in 5 years. Another year of added debt was something that was barely questioned.
One of my biggest regrets in college was not studying abroad. I didn’t have enough confidence in myself to know that I could make it on my own in another country. Similar to leaving college early, I also felt like I would miss out on certain things. If I could change it, I would absolutely study abroad. I would have had to sacrifice some of my savings and maybe add to my student debt but I think the experience would be invaluable. It would also allow me to explore other parts of the world at a student discount which would mean a whole lot of savings when I am older.
Don't be so quick to leave your parents house
I stayed with my parents after graduating from college because it made sense financially and location-wise, but I had an itch to get out of the house. While I wanted my own freedom, I didn't really think about long-term financial freedom because had I capitalized saving money and working towards building a sizeable nest egg while under my parents roof, the freedom I would have now would be completely different from the freedom I wanted then.
In America, kids are deemed as adults at 18 and are expected to leave the house. In other cultures, you stay at home until you are married or must go somewhere to work. The advantages of staying at home is the opportunity to save, to help your parents with their own living expenses (especially after they've spent the majority on you), the opportunity to spend more time with them and chance to get yourself financially set. Staying with my parents with a different mindset would have netted me a completely different outcome.
Have a side hustle
I always thought about starting a side hustle. I even paid for classes to figure out what I should do, but looking back, I was too busy wanting things to be perfect to realize that a side hustle doesn’t need to be perfect. The point of the side hustle is to do something on the side that generates some income. I wish I had spent more of my 20s doing something on the side to learn, build up new skills and open doors for opportunities outside of my traditional 9 to 5. I definitely made a lot of excuses when I got home from work that prevented me from just experimenting and starting something. Sometimes, just starting is a step in the right direction.
Keep writing and blogging
I had one of those Xanga and Angelfire blogs early on in the internet days, but I stopped, but I shouldn’t have. My Angelfire blog was dedicated to the Backstreet Boys. Yup, I was #KTBSPA. The thing about having that blog was I learned HTML and CSS which looked great on my resume at that time. My Xanga blog was a personal blog where I learned to find my voice and get my thoughts into words. I wish I continued blogging and writing because I could have honed my skills faster and easier and perhaps the learning curve to start and market a blog wouldn’t have been so great this time around.
Start writing, start documenting, start creating. If you want to write something related to personal finance, contribute for Sisters for FI. If you want to start writing, check out Medium. If you are ready to start your own blog, grab a domain and a hosting site.
Sell the car
With my parents help, I bought a brand new car after graduation because I needed it for work. When I got a new job in the city, I didn’t really need my car. I used it occasionally during the weekends, but more often than not, my car would sit on the streets sometimes getting parking tickets because I was too lazy to move it. It never occurred to me to return or sell my car. I was so close to paying it off that I just wanted to complete that transaction, not really realizing that even with the payments gone, insurance, gas, tickets and other maintenance costs continued to add up. Then the universe made the decision for me when I got into a car accident. My car was totaled, no one was injured, I was OK and I received a payout which helped me pay down debts. So looking back, if it’s not necessary, it’s OK to let it go.
Clutter means wasted money
This was a hard lessons to learn later in life. When you are taught that shopping is the cure all to everything, the outcome is a place full of stuff. Stuff that you barely have time to use, stuff that takes up time to maintain, stuff that cost money and no longer serves you. It took a few years for me to understand this, but I eventually did. Had I learned it earlier, I'm sure I would not have spent money on so much frivolous items. That my walk-in closet of barely worn clothes could have been better saved for something better.
Don't be afraid to sell your stuff and use that money for something else. Things depreciate very quickly so instead of holding on to things you are not using and letting them end up as clutter, let them go.
Leave the investments alone
I got antsy at one point for change, for something and started playing around with my investments. I shouldn't have done this. I didn't need the money. They were in a secure spot in low cost index funds that were already providing good returns. It didn't need attention. Sometimes, we really are irrational beings that don't think long-term and that get greedy sometimes.
Regret is failure to focus on the future
Of course, I also believe in the quote above so don't spend time regretting. Move on and learn the lessons. How about you? Is there something you would want to change if you could? If not for yourself, what advice would you give to someone younger to help them on the path to a be more financially secure? There are always lessons to be learned.