I recently got my 2010 pension statement from work, which showed a somewhat dismal balance, although a reasonable cash-flow for when I turn 65 (2045 seems like a very long time from now). Tim posts his net worth every two months, but I never have, mostly because I really don’t have much in the way of assets. I’m 31 years old, and I really don’t know what I spent my money on for about the first four or five years of my full-time working life.
If I knew then what I know now, I would (hopefully) have invested a considerable amount of money in income-producing assets, which would have reduced my time at work by a considerable amount of time.
Looking at my balance sheet from the age of 23-28 though, I basically had $0 in the asset column and $0 in the liability column (after paying off my ~$25,000 in student loans), and spent everything in the middle, with very little to show for it. Over the past 3 years, I have added a large amount to both columns with the purchase of a home (for good or bad depending on your thoughts about home ownership), but at least I seem to be adding more in assets.
At some point (hopefully at or around the age of 45) my goal is to have enough income-producing assets to cash-flow my lifestyle needs. This was never a goal previously, but has become one of my new considerations before I make a significant purchase, for example – should I be saving money now to purchase the new iPhone, or should I be adding this money to my bi-weekly mortgage payments? The iPhone will add to my general life-enjoyment (until the next version comes out), while the mortgage payment puts me closer to my end goal of $0 owing on my mortgage and the start of building assets.
I think most people who read this blog would at least weigh the pros and cons of a major purchase and realize there is an opportunity cost to most purchases. Personally, I learned about this by reading different books and websites and coming to the realization that I would like to be financially free more than I would like to have every new toy that comes out (I still get some, but I will probably wait until the iPhone 6 or 7 comes out to upgrade my phone, if I decide I need one by then).
Looking at what I have now and what I spent money on in the past, even without accumulating debt I basically gave up a year or two (at least) in purchasing “stuff” that I really don’t have much to show for. Electronics go obsolete quickly, books collect dust, cars die. Reading Robert’s post from yesterday about the mistakes he’s made investing , I wish I would have made those kind of spending mistakes (where I could have learned a lesson and still had an asset worth something) than buying “stuff” that I can’t even give away.
How are your assets looking these days? Do you have any spending regrets or tough financial lessons learned from your past you wish you could fix?