“Never be afraid to ask.”
I was first introduced to the “don’t ask, don’t get” maxim by my Dad, and it has earned me countless dollars over the years. Thanks to my Dad’s advice, I’ve reaped rewards not only by negotiating a better salary, but by nabbing savings at the grocery checkout, as well. Dollars that would never have been served to me on a silver platter. I get it, haggling over every nickel can make people uncomfortable—not least my husband, who still squirms a little every time I price match at the local supermarket. I guess I am an exception to the general rule that women are more timid when it comes to asking for money. I’ve also embraced Dad’s advice in the additional sense of “never be afraid to ask questions.” If I’d never admitted my lack of understanding on a subject, for fear of looking ignorant in the eyes of a college professor or senior coworker, I would have missed out on so many valuable learning experiences.
I liked this question so much that I passed it on to some other Experts. Here’s how they replied:
“Never buy anything you can’t pay for in cash.”
I was cautioned very early in life that I should never buy anything I couldn’t pay for in cash. The only times I’ve deviated from this principle were for those unavoidable big-ticket purchases: House, first car, college education. Apart from that, I’ve always stuck to the belief that if I can’t afford to pay cash, then I simply cannot afford it.
“Be in charge of your own financial life.”
My Dad encouraged my older sister, Pat, and me never to rely on anyone financially. He pushed us to learn and explore great careers at a time when I don't think many fathers were giving their young daughters that message. This was in the 60s and 70s. He explained to us that if we could support ourselves we would have the freedom to pursue the things we loved in life without having to ask anyone permission. His outlook and ours was never I can't do something because of a financial obstacle, it was how can I? Ever since I began to earn my first full-time paycheck, when I graduated from college, I've held my own bank, credit card and investment accounts separate from my husband–even after more than 24 years of marriage. Sure we have joint bank and investment accounts, too. But we each also have our own financial independence. That's empowering.
“Your financial future is up to you—not your employer, your spouse, your family or the government.”
This advice from my parents still resonates with me. They always wanted my sister and me to work hard and enjoy the fruits of our labor rather than look to others for support. Their wise words helped put us both on track to achieve financial independence in life.
My mom and my dad each issued their own separate nuggets of wisdom—you may decide which is best. At age 11, Dad sat me down with a calculator and asked me to add up the amount of money I’d earned in my lawn mowing job. He then showed me how much I’d end up with, if I chose to put that amount into an IRA and watched it grow over the next 50 years. My projected retirement nest egg was so massive as to seem improbable, like a magic trick. It was the first time I fully realized the effects of compound interest.
If my father taught me the value of a dollar saved and invested, my mother taught me something more profound: What to value in this life. Her advice came in a letter she wrote me when I graduated from college. It was the root cause of my joy-based spending philosophy, and something of an antidote to our capitalistic culture:
“Attach more importance to experiences than possessions.”
Alicia K. Waltenberger: “Start investing as much as you can, as early as you can, into a retirement account.”
This came from a college professor (you guessed it, I was a Finance major). It’s something I’ve parroted to my clients and anyone who will listen, ever since: I think it made such a deep impression on me because, as a college student ready to embark on a brilliant career, retirement was the last thing on my mind. His explanation of historic market performance, tax-deferred growth potential in qualified retirement plans and the realities of retirement (he was semi-retired) all proved unforgettable.
“Save 10 percent of what you make, and live within your means.”
These two concepts (for the price of one) were shared with me while I was studying for my Series 6 exam (just getting started as a financial services rep), and had a huge impact on my life. Within two years after graduating college, I was able to live within my means, which meant I had some work to do, living paycheck to paycheck, with some credit card debt. But I made sure I could pay off credit card balances in full at the end of the month. During my 30s, with this adjustment, I was able to increase my savings rate to 10% over time. Now that I’m in my late 40s, I think twice before making any large purchases, equating each one to working longer. I enjoy my work, but take this approach to enjoy the luxury of retiring on my terms—at the moment, a phased retirement looks interesting, with a fun transition from full- to part-time work.
Withdrawals from retirement accounts prior to age 59½ may be subject to a 10% federal tax penalty, in addition to ordinary income tax.
A hypothetical example of the principle of compounding was used for illustrative purposes only. It is not intended to predict or project investment results. Actual investments may be subject to market volatility, taxes or investment fees and expenses.