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|Subject: FI Part II: Invest Early||Date: 9/22/2013 7:31 PM|
|Author: whyohwhyoh||Number: 4985 of 5082|
Part 2: Invest early and often.
Again in no particular order; investing early has been a key enabler for me. There are many paths towards FI, and this is just the details on mine, and I'm not there yet.... still on this journey.
I've never been an excellent investor; however, I've stuck with low fee broad index funds and enjoyed some individual stock picking, just to keep me interested.
In the 8th grade we had a finance visitor come talk about finances and the compounding of interests etc. in what I recall as 4 one hour sessions. I was a bit young, but later in high school I remember my Spanish teacher lecturing several times about the importance of saving 10% of your income for your entire career, as she claimed she was financially independent and taught part time for "fun" with her summers off to travel. I remember these talks clearly, and later began reading about investing in finance sections of book stores, and of course here on the Motley Fool around 1995, but it was on AOL at the time at 28kbps.
Once I graduated from college and started my engineering career in 1997, I signed up for 7% 401k withdraws starting with my 1st paycheck. It wasn't easy, but we led a very frugal life. I was very intrigued with purchasing individual stocks, but didn't have the funds at the time. By about August 1999 I had apparently saved up an e-fund and was ready to start shifting cash flow into more investing. I still have the same 401k account, and amazingly am able to look at all the historical transactions back to the origin in 1997. In Sept. 1999 I started to really ratchet my 401k up to 16%, and starting in 2000 I was able to start maxing out my 401k each year, something very few of my colleagues were taking advantage.
At this same time I also made my very 1st stock purchase through E*Trade. 60 shares of Starbucks in August 1999 for $22.50/share + $19.95 commission. I still own these same shares today in a taxable account, and with all dividends reinvested and 2 stock splits, I now own 252+ shares a little over $19,000... a ~13-bagger so far. I've continued to pick stocks mostly in a Roth IRA and later some other IRA accounts, but probably only matched or slightly bettered an S&P500 performance.... but is part of what has kept me motivated to continue investing. Most of my NW is in index funds.
I've continued to max my 401k from 2000-present.
Some random frugalness indicators:
1. No HBO.
2. I make our pizza from scratch.
3. DIY installed 6 solar panels to offset the $0.32+/kwHr crazy high tier rates in California.
4. I hit the farmer's market each week right as it's closing to get huge discounts on fruit and produce. $1/lb plums/peaches/organic tomatoes/grapes.
5. I buy flour in bulk and dry can.
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