#17. Our Unremarkable Investment Journey
Updated: Jan 22
Before I write about what our current investments are, I want to provide background on how we previously viewed our investments/retirement and how our approach changed over time. I hope this makes everything I am talking about more relatable. This will show that you can come from a place with zero teachings or investment knowledge, and then be able to invest your money confidently on your own.
I grew up without any formal teaching on investing. My dad owned his own business, so he never talked about a 401(k), a pension, or any other retirement savings vehicle. I still remember the first time I was introduced to compound interest formally.
During my sophomore year of high school, a speaker came to our school to give a presentation on investing and compound interest. I remember the presentation was held in our cafeteria. It was a foreign language to me.
The speaker explained how everyone in the room could be a millionaire by 65 years old. He further explained that if every student in the room started saving and investing just twenty dollars a week, they would retire a millionaire.
I saw two major problems.
One, the school population consisted of many students who were on the poorer side. The thought of EVER having a million dollars to our name was outlandish. Only rich people could make a million dollars. Because of this incorrect belief, I completely disregarded the presentation and ignored the actionable steps he laid out.
Two, even if I had listened intently to the full presentation, without any background knowledge of the stock market and investing, I would have been unable to grasp what I needed to know. An actual required class in high school would have been a much better avenue for teaching our sophomore class about personal finance.
My First Real Job
Fast forward to my first job as an official attorney in September of 2015. I began working for my dad at his law firm, but I still had zero understanding of how to properly save for retirement. I just turned 26 years old.
I had no access to a 401(k), but luckily enough, I had a money conscious girlfriend (now my wife 😊) who I had met the year prior to get me interested in personal finance. She was not only taught about saving and investing, but she also understood the importance of it. This was one key turning point for me, and I am so grateful it occurred.
My First Major Mistakes
Now, just because I started to realize the importance of investing, I did not begin looking into the topic immediately. It took me three more years to start making it a point to learn more on investing and personal finance.
My first mistake was not starting my investment journey earlier. My second mistake, which I am about to share, is such a face-palm moment to me now.
Around 2017, I heard on the news how important it was to invest in a Roth IRA. I read a couple headlines, knew my insurance firm (USAA) offered Roth IRA investments, and deposited $3,000 into a Roth IRA managed by USAA. I did nothing more with the money and made no further investments for two years. I did not realize I needed to invest the money once it was in the account, and I never bothered to learn otherwise.
(Note: USAA in July, 2019, sold its investment business to Charles Schwab, who I currently have my Roth IRA through.)
A Lightbulb Starts To Flicker
Now jump ahead to 2019 when my true passion for personal finance began. I purposely started Googling more about investing and became familiar with Investopedia.com*. Once my Roth IRA was transferred over to Charles Schwab, I eventually invested the money into a conservative mutual fund, ticker symbol PRSIX, and felt good about what I was doing.
For the readers who are more familiar with Roth IRAs and investing, you are probably squirming and clinching your jaw because I was investing into a conservative mutual fund that had a high expense fee in my Roth IRA at just 30 years old. Again, I had a very base knowledge on investing and thought being conservative when it comes to the “terrifying stock market” was the way to go.
Then, around October, 2020, my “Ah-ha!” moment finally occurred. A good friend of mine, one of my best-friends actually, recommended a book by JL Collins called The Simple Path to Wealth**. He told me what it was about. I remember saying something along the lines of, “Yes, investing is huge. I already have a Roth IRA and have it invested into a mutual fund.” I thought I was a bigshot.
I had no idea how much knowledge I lacked when it came to building wealth. I generally thought I had everything figured out because I was automatically investing into a Roth IRA (I was not even maxing it out yet). I should have known something was missing because I have always believed the more you learn, the less you know. And I thought I knew a lot about investing.
Because of how much I trusted my friend, I read The Simple Path to Wealth anyways.
The Lightbulb Became Brighter
Wow! My life was forever changed when I finished Mr. Collin’s book. I invested the money in my Roth IRA with Charles Schwab into SWTSX (Schwab’s low-cost total stock market index fund) and started reading everything I could on the FIRE (financial independence / retire early) movement and personal finance.
Some of the books I read immediately thereafter that had a major impact on me were The Psychology of Money by Morgan Housel, Your Money or Your Life by Joseph R. Dominguez and Vicki Robin, Die With Zero by Bill Perkins, and The 4-Hour Workweek by Tim Ferriss. Since 2020, I have mainly spent my “down” time reading or listening to motivational or finance books, listening or watching financial podcasts on YouTube (I highly recommend The Money Guy Show), and thinking of ways to increase our income.
With all this base knowledge, I finally began to get very serious about reaching financial independence as early as possible.
The Lightbulb Officially Shined At Full Capacity (I think)
Shortly after I began making financial independence my top priority, I had the epiphany I wrote about in my first post. To summarize the post, my epiphany was that more money was not the answer, more TIME to do what our family wanted to do was what I truly desired. Therefore, I started seeing money as a means to an end, instead of seeing it as the end itself.
Since I started the blog, I have been focusing on figuring out my “why” in life. I started by listing out all the things I wanted to spend more time doing. I then went on to try and picture what a day without work restraints would look like. I continued writing and doing a deep dive of our finances and figuring out ways to save and make more money. Ideas eventually started flooding my head about what to write about, so I had to start the “Financial Independence Tangents” and “Adulting Is Hard” series.
If there is a mistake out there that has been made in personal finance, there is a decent chance I can relate to it. I have spent a lot of my life making plenty of mistakes and learning from them. If what I share is not useful or actionable to your situation, one of my main hopes is that at minimum you can see a path to becoming confident with your personal finances no matter your current situation.
As long as the ideas keep coming to me, I plan to keep up with this blog on my current schedule of Monday, Wednesday, and Friday posts. It means the world to me that you decided to join me on this journey.
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*Disclaimer: I do NOT receive any compensation for you clicking on any links in this post, not even a fountain drink.
**JL Collins also has a free blog series on saving and investing.