I wrote a post almost 10 years ago about money revelations in my 30s.
Here’s an updated version now that I’m approaching my mid-40s (dammit Father Time):
1. Lifestyle creep isn’t always bad. Yes, you need to live below your means, delay gratification and avoid overspending.
But I am not a fan of living like a pauper when you’re younger just so you can have more money when you’re older.
If you’re making more money over time you should be saving more but spending more too.
There is nothing wrong with enjoying the fruits of your labor assuming you keep your savings rate relatively constant over time.
2. Debt is a tool. Personal finance experts hate debt. I don’t share that view. I’m not of the opinion that every big purchase in your life has to be made with cash.
Debt in and of itself is not bad. Debt is like a hammer. It can be used to both build and destroy.
The intelligent use of debt has brought far more flexibility to my financial life.
3. Investment performance is important but mildly overrated. I spent my 20s and 30s building up my tax-deferred retirement accounts and emergency fund.
Then I moved on to building up my taxable accounts. I was looking at the history of my brokerage balance this week and noticed there has been a big jump in the balance over the past five years or so.
The bull market in stocks and crypto has certainly helped but the biggest reason for the increase is the fact that I’ve been shoveling more money into this account.
Compounding does the bulk of the heavy lifting over the longer stretches but how much you save has a much bigger impact over shorter periods of time.
Returns matter but it doesn’t matter
