So What About Retirement?

During my mid-20s I opened up both a stock trading account & a retirement account. I made a couple of big investing mistakes.

  • Not doing dollar cost averaging. It’s very difficult to time the market, even people who do it for a living get it wrong. The ones who do it right have their profits eaten up by capital gains taxes. If I continued to invest during the downturn of the 2008 era, all my portfolio losses would have turned into gains. I also would have a nice sized retirement account at this point relative to my age. $5,000 x 6 years = $30,000. Taking the calculation from The Millionaire Next Door into account age 30 x $30k / 10 = $90k is how much I should have in retirement at my current age.

  • Self-reliance. Letting the naivety of my 20s cloud my judgement in business. Thinking things would automatically fix themselves if I waited it out long enough. People make promises all the time and don’t keep it. Just because your boss is an incredible business person who has made a success in his career doesn’t mean he will make any efforts to keep you around in his business, or try to develop you into the kind of employee he / she wants to keep around. Work as a team but at the same time looking out for one’s own self-interests is key.

  • Eggs in one basket. I got burned way too many times not thinking about the level of risk associated with my investments. Put a few Gs in a penny stock, lost over 50% of it. Kept sending more and more money into it, basically throwing good money after bad.

Today my 401k is valued at $2300. Even though my student loans are a top priority, I also realize the time value of money and the importance of contributing in my 401k up until the match. So not including the match assuming an 8% average rate of return for my current balance up until retirement age (let’s just say 65).

That $2300 will be worth $34,006.29. This doesn’t include taxes on the yields, but still…not chump change.

One of the cars I’ve been eyeing as a replacement for my current vehicle is a new 2013 Infiniti G37 . 328 hp, RWD, VQ37 engine, 7 speed automatic transmission with paddle shifters. 0-60 in about 5.4 seconds. If I were to buy a new one for $30k, using the above calculations with a lump sum investment I’d be missing out on $444,000 of retirement income. How does that shiny new car sound now?


Not saying I won’t ever buy the car, but being smarter about how much I pay for depreciating assets is very important if I want to be a PAW (Prodigious Accumulator of Wealth). 🙂

Lastly I wanted to reflect on how far I’ve come. It’s easy to say I’m not aggressive about paying my student loan debt quickly enough. Truth of the matter is in the 2 years since starting this blog over $3500 of what I paid has gone toward interest (@4.25%). So take the original balance of 45159.35 and subtract the Month 23 update amount of  33,018.91. Leaves you with $12141 plus 3500 so $15,641. That amount is more than half what I earned in 2010 and more than *all* my earnings in 2011. In 2010 it was because the job I got paid slightly more than what an intern might receive. In 2011 being unemployed and unable to collect unemployment contributed heavily to that…

So all things considered I think I’m doing well. If I keep making smart decisions I’ll have more money than my friends who currently earn more but spend less responsibly. Last but not least I started taking some fish oil in heavier dosages (4-6 capsules at 1000mg each). It’s really helped improve my mood. I was getting to the point of being cranky and lacking energy hardcore until I started getting more omega-3s in my diet. One could even call it mild depression. All the things I wanted to do because they make me feel better like the gym I couldn’t do. Almost like hitting a wall that you can’t climb or move around…I feel almost like a different person now. Like my drive is back and my outlook is more positive. Hope things stay this way. 🙂

Month 23 Update – $33,018.91

Month 23 Update: i currently owe $33,018.91 on my student loans as of March 4, 2014. Image

Our washing machine needed to be serviced. I looked around on Yelp for the best company in the area. Basically I wanted the job done, didn’t want to wait the entire day for a service technician and obviously didn’t want to get price-gouged. I asked in advance, the owner said the repair typically runs $150. The actual cost was $99 as only labor was involved. If I let the machine go longer making noises I could’ve destroyed the entire thing.

My car is coming up for a service appointment. Spark plugs are rated for 100k miles but the car is also 6 years old. Car has 76k miles. I might be able to put this one off for another year. Still afraid of heaving the plugs seize up in the cylinder head.

Electric bill was $204, I am very eager for warmer weather. The cold makes me less active and has basically doubled our bill. It’s gonna be rough until my next paycheck. Keeping a $1000 emergency fund is harder than I thought. I hit it, then go back under it again.



My credit card balance is only $100 right now, but have about $250 in pending charges and $907 in cash. Last week I ate out almost every day due to stress / convenience and a need to go out and be more social. Gained 7lbs in a month but this isn’t permanent. Cutting back on carbs /  wheat in my diet and preparing more meals will help. I can’t remember the last day I got a full 8 hrs of undivided sleep.  I need to remember what it means to have fun.

I’ll end this with something a little different… I find the busier I am, the less time I have to be depressed about anything.

Five Steps to Happiness

1 – Stay Off Social Media
2 – Don’t Talk Negatively about Other
3 – Give Gratitude
4 – Make Time For Yourself by Saying No
5 – Say Sorry

🙂 Get Debt-Free and Stay That Way!!