An Email about Finance and Smart Decisions

I don’t know where this came from, I found it in my email that I’ve been cleaning out lately. I must have thought it was a good piece and wanted to save it. It’s about a man who came over to the U.S. in the 50’s with only $400 in his pocket and how he became a great success. He has some good advice in here:

Here’s a hindsight view from someone that came to the USA in 1956 with the grand sum of $400 and the promise of a job. Today my wife and I have a high 7 figure portfolio of municipal bonds and CDs, a primary home and a vacation home, both paid for, and two retirement pensions and two SS checks arriving like clockwork every month.

In every person’s life there are a very small number of very significant turning points. Take one bad turn and you can impact your future big time. I must also add that there is one factor that none of us have any control over and that is the date on which we were born, i.e. timing.

Factors that are important for success:

1) You need parents and an extended family that are great role models.

2) You need to buckle down, be very conscientious, and work very hard starting at grade school because without a good education behind you the road of life will be significantly tougher for you.

3) In the vast majority of cases you need a college education, preferably with a post graduate degree since the competition gets tougher and tougher all the time.

4) You need to get it right when you decide to marry. I have been married to a wonderful woman for 53 years. Divorces can be a finance killer, quite apart from all the unhappiness and stress.

5) You need to be the best employee you possibly can and keep improving your job skills so that when layoffs occur you aren’t one of the unfortunate ones to be let go.

6) You need to start a savings program when you get your first paycheck and stick with it.

7) You need to make the maximum possible contribution to your company 401K plan.

8) You need to live frugally, at least until you are very secure financially, then you can ease up a bit.

9) The good education helps again when it comes to managing your own finances. If you have good math skills, understand the power of compounding, understand the devastation that one large percentage loss can make to your portfolio, then you have an excellent chance of acquiring the skills needed to manage your own investments.

10) Being born in a good year can prevent you from meeting an early death in a war, keep you out of periods when the economy and job market go through a serious downturn, and allow you the opportunity to benefit from periods when jobs were plentiful (i.e. during the Cold War), and grow your investments very significantly during bubbles and periods like the nineties when the financial markets were unusually strong. Thus I am the first to admit that LUCK plays a huge role in one’s life.