How I "Made it" to Financial Success Slow crawl to financial success

How I “Made it” to Financial Success

Written for young adults, if your older, like me, this is to be shared with your young adult children

I was 25 years old and living in a one-bedroom apartment in the Lincoln Park area of Chicago. Life was great! I had my Finance Degree from the U. of Iowa, and I had a steady job at a large mutual fund company in downtown Chicago.

My social calendar was full as I had friends to go out with any night of the week while playing in multiple basketball and softball leagues.

All my money went to paying rent and going out money. My roughly $21,000 salary (everything was a lot cheaper back then) took care of all those expenses.

Then, one day my mother asked me how I was getting along financially. I told her I was good. I barely used my credit card and never had an issue paying my rent.

She followed up by asking me what I have saved?

Whoops. I gulped and told her nothing yet. It made me feel uncomfortable. I mean I was only 25 years old. She mentioned an Individual Retirement Account. Had I put $2,000 in back then it would grow to about $40,000 by the time I was 60 assuming 9% stock market return.

She told me to start saving. I listened.

It sounds simple, but all I did was set up an auto investment program for $200 per month. As a goal oriented person I started setting statement balance goals for myself. When I got a raise, I increased the auto save. I put myself on a fixed spending plan so I could increase it some more.

I wanted to get to a balance of $1,000 ASAP. Then $2,000, etc.

Fast forward, when I met my wife, Soni, that plan was accelerated. Soni, was a successful hair stylist and like me, wasn’t saving the money she made. The first thing we did, you guessed it, set up an auto save program.

We created auto save and investment programs to provide for all our important financial goals.

For example:

Emergency fund – 3x monthly family income
College – we started by saving $50/m per kid and bumped it up whenever we could so that we were able to pay for all three kids (in college at the same time) from saving, not current income and no loans. Each kid’s college education costs were well into 6 figures!. The power of starting early and automating the saving in fuill display!
We are very blessed today with financial freedom today due entirely to the auto investment programs we set up 35 years ago.We set up mulitple over auto investment plans as we could afford to to pay for other items including our ultimate financial independence.

WITHOUT AUTO INVESTMENT PROGRAMS WE WOULDN’T HAVE BEEN SUCCESSFUL.

Of course, making prudent investment decisions helped tremendously. Sure, it helped that I had studied for and became a Certified Planning Practitioner (CFP) while these changes were happening.

Our investment returns have generally been very good, but just as important was the fact that we never paid income tax on most of the investment account growth.

Our key holdings are either tax-free or tax-deferred: