7

Suppose you could travel back five years and give yourself one bit of financial advice, anything except stock tips.

What would it be?

closed as primarily opinion-based by RonJohn, Dheer, Peter Cooper Jr., Joe, Victor May 21 '18 at 10:46

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise. If this question can be reworded to fit the rules in the help center, please edit the question.

  • This is just a weird discussion question based on an impossible hypothetical. It has the additional feature of being obsolete because it was a time sensitive question. – Nathan L May 7 '18 at 15:04

16 Answers 16

8

2 things:

  1. Understand how to research, research, research stocks instead of just plopping money in without understanding key metrics about a company
  2. I should have been less concerned with paying short term capital gains taxes on my employee stock purchase plan purchases, and I would have done more investigation into the fundamental value of the company. 15% off a purchase price sounds great, until you hold it for a year and its dropped 50%.
  • 1
    or, from my personal experience, dump all the money you can afford into the ESPP - but only if you're going to be bought out at a 50% premium over list price in 6 months :) – warren Sep 8 '10 at 17:25
7

(more like 10 years ago, but that's beside the point)

Save, save, save!

Both in the notion of squeezing as much value as you can out of every purchase and the notion of putting money away in a savings account.

6

I wish I had learned my lesson from the dot com bubble before I took a piece of the housing bubble.

  • 2
    at least your learning – Tim Jun 17 '10 at 15:50
  • 1
    or am I just plain broke now? vOv – MrChrister Jun 17 '10 at 18:12
6

Maybe not exactly 5 years ago, but the big thing I wish I understood starting out my career was retirement accounts and how they worked.

5

I wish I would have:

  1. Paid off my car loan a lot faster. I had the cash, it wasn't in a higher interest rate investment, and I just didn't think to do it.
  2. Spent less on groceries by learning to shop sales and plan my menu around them instead of planning meals incautiously.
  3. Put my savings into a higher interest rate account or the stock market (instead of something with under a percent return at my local bank).
  4. Taken that personal finance class in undergrad!
4

I was offered a student credit card and refused it.

If I'd taken it and used it sparingly, paying off the balance on time in full every month, I'd have built up a better credit rating in the time period.

  • 1
    Plus, you can get a free t-shirt! – Eclipse Sep 8 '10 at 19:25
3

I wish I had started contributing to the pension fund offered by my employer sooner than it became compulsory. That is, I started working when I was 23 but did not contribute to the pension fund until I was 30 (the age at which it is compulsory to do so). I lost a lot of productive years in mid to late 90s, when the stocks were doing well. :-(

3
  1. Save half my income. I've found this much easier than I originally expected. I use the following formula to manage my desires: want more = work more.
  2. Learn some basic economics. I wish I would have read this and viewed these videos 5 years ago.
  3. I am as qualified as anyone else to choose investments. I should make sure I do my homework and understand them.

Now, if I wasn't concerned with the integrity of my already tainted soul I would have given myself the following advice five years ago:

  1. Obtain a job with Goldman Sachs, JP Morgan, Citibank, Merill Lynch, or Bank of America. Your company will never fail. What a great business model.
  2. Obtain a government job (especially government school teacher). Unlike private sector jobs, most government jobs still have pensions and they cover most healthcare costs. I would have to save very little (if anything) for retirement and I would be able to live off the productive folks in the private sector.
3

Advice to myself: the benefits of being self-employed totally outweigh the risks!

2

Compound interest.

Next time you buy a 100$ toy realize that if you save it - in x years that 100$ you saved and invested could potentially be more than 100$ where as most likely whatever you're buying will be worth much less.

  • 5
    But money is worthless if you don't use it for something – Joe Phillips Sep 7 '10 at 17:07
1

Get an advanced degree. This should increase your earning power. Also learn how to use a computer, this should also tend to increase your earning power.

  • 6
    Ha! Mine would be 'Grad School is a waste of time'. – theycallmemorty Sep 8 '10 at 16:30
1

I wish I would have known macro-economics taught by the Austrian School types at The Mises Institute. Their teachings would have compelled me to do the following:

  1. Sell my house! 1/2 million of equity now all gone.
  2. Buy Gold. Gold was at $435 in June of 2005, now at $1250.
  • Commodities tip, stock tip, same difference. :b – fennec Jun 21 '10 at 20:00
  • Perhaps, but my point is not that I wish I would have known that RE would crash and Gold would triple, it's that I wish I would have understood the macro big-picture. Had I known then, as I know now, how an interventionist monetary policy affects the economy, I would have taken those steps. – azcoastal Jun 24 '10 at 5:39
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    Market bubbles can happen regardless of monetary policy. Irrational demand for something drives up the price. At some point, no one can afford it, and it has to come back to sanity. I think this graph sums it up pretty well. marketoracle.co.uk/images/2009/June/housing-prices.gif – myron-semack Jul 8 '10 at 20:22
  • Irrational demand - sounds a lot like Keynes' "animal spirits" from his General Theory... CPI often is rigged to eliminate the assets that are being driven up in price by inflation, as it did during the recent housing bubble your graph. What does the "CPI" represent in that graph? Obviously not housing prices - nor energy, which were also skyrocketing then. Since I've studied the Austrian Theory of Business Cycles, I'm comfortable in my assumption that all market bubbles are caused by some form on monetary inflation. – azcoastal Dec 4 '11 at 7:53
1

Bank every dollar possible to have more cash available for investing during the 2008/2009 crisis.

1

Planned my grocery shopping better. You can't just wake up on Saturday hungry go to the grocer and buy what looks good.

Take the time to clip some coupons and more importantly make a shopping list.

  • I wish I'd done this too. The good part is, as soon as you learn, you learn! – justkt Sep 10 '10 at 14:34
0

Do your homework on all types bonds and other lower-risk instruments, including bond funds and ETFs. I left too much money sitting around as cash over the last 5 years.

  • Funny, I didn't have enough sitting in cash when it would have been handy... being 100% invested is a similarly bad idea :) – bstpierre Sep 12 '10 at 22:35
0

When I was contracting I wish I had joined a tax efficient umbrella organisation rather than just work as a sole trader.

I also wish I had put money aside to pay my taxes rather than just spend it all. :(

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