Just the other day, I posted my 7 biggest financial mistakes. These errors in judgement have cost me around $100,000 over the past 14 years or so. My attitude towards these mistakes are that I can’t change the past. Sure, it hurts to think about them from time to time, but I am optimisitc about the future. I tend to focus on the future because I can control what happens to me, to a certain degree.
However, to balance the costly mistakes over the past several years, I wanted to highlight my better financial decisons that I believe outweighed the costly mistakes and have allowed me to be in a decent financial position for the long-run. So, here are my best financial decisions:
- Choosing a College Major: I knew early on in high school that my talents were in math and science. I’m only 5’9″ so I was never going to be an NBA star. I had no interest in the arts, literature, history, or political science at the time. I was lucky enough to have parents who stressed the importance of an education and the importance of choosing a major that will be in high demand. I eventually chose to major in Pharmacy.
- Knowing future career potential: There are several options as a pharmacist in terms of work setting. Broadly speaking, one could work in the retail setting, the hospital setting, or the pharmaceutical industry. I never felt a desire to work in the retail or hospital setting so I’m glad I not only chose a path with a high career potential, but also chose a setting that I love…corporate America. I feel that if you apply yourself, network, and make your goals known, the possibilities are endless. This has led me to significant promotions and job changes.
- A career in high demand: The demand for jobs in each of the settings for a pharmacist vary widely. It was once believed that the demand for pharmacists will remain high due to low college enrollment coupled with an aging society. However, over the past decade, more and more pharmacy schools opened and enrolled a significant number of students. As a result, the demand for pharmacists in the retail setting has diminished. The same goes for the pharmaceutical industry. The industry is going to very tough times and as a result are laying off 10′s of thousands of workers. However, I have continued to expand my skillset, so that I can continue to pursue industry positions in several different types of roles.
- Setting aside retirement at an early age: As soon as I got my first job, I opened up a Roth IRA and began contributing to my 401k. I always knew the power of compound interest and knew that if I can shovel as much money as I can at an early age, it would pay off in the long-run.
- Multiple Income Streams: Though I only have 1 job currently, I invested in 2 real estate properties over the past 6 years in the hopes that these would generate income once the properties are paid for. Although I may gripe about the rental properties, they have proven to be a valuable asset in my portfolio. I also have a signifant investment portfolio that I can shift to dividend paying stocks if I ever needed the cash as another income stream.
- Continue to invest in up AND down markets: I’ve had too many friend and family reommend pulling my money out of the market and parking it in money market accounts. I’m thankful I didn’t heed their advice because I would have missed out on significant gains since the market bottomed out in late 2008. Additionally, I knew people who were too scared to invest in the market during that period and beyond so they stayed on the sidelines missing the opportunity to buy investments at rock-bottom prices. I take a slow and steady approach so I continued my 401k and IRA contributions.
- Invest in age appropriate investments: I was never scared of the market and could always handle market fluctuations. Thus, I have always had my investments in very aggressive accounts. I am still invested in aggressive accounts, but will continue to shift this allocation as I age and my situation changes. Because of these early aggressive investments, I have seen significant gains over the past several years.
There are probably a few more good financial decisions that I’ve made, such as buying a home close to family which saves on day care costs, but I decided not to include these because I know that not everyone has that luxury. The ones I described above are decisions that I believe everyone can make with careful planning and personal relfection. I also did not include things I did not do, such as taking on more debt than I can afford, because the list of things I did not do would be exhaustive. This could include things like, I did not become a drug addict, or I did not gamble. Anyway, what about you? What decisions have you made that were financially rewarding?
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