Author Topic: Best Piece of Advice You Can Give Someone Just Beginning?  (Read 2285 times)

gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Best Piece of Advice You Can Give Someone Just Beginning?
« on: October 10, 2019, 05:09:00 PM »
Hi everyone. I am new to the forum, and I have just started in my journey in pursuing FIRE. I have received a lot of help and advice some great people on here, and I had an idea that can help others who are just starting out.

This forum, collectively, is a wealth of knowledge that can change generations of people's lives for the better. I propose a simple question to ask you that can give new people a jumpstart in applying the principles of FIRE in their everyday lives. You don't have to be FIRE'd to participate. You can even be only a few weeks/months in. Having a go-to resource like this, a compendium of tips for beginners, can really help someone in the beginning. It may even be the thing that gives them the strength/motivation to continue when it gets hard.

As the title asks,


What is the best piece of advice you wish you had received (or did receive) when you first began your journey toward FIRE?



gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #1 on: October 10, 2019, 05:10:22 PM »
I'll start:

I got this wonderful piece of advice from @BicycleB :


Right now each choice is the outcome of struggle, and the feeling of desperation permeates life.  -edited for clarity- little will change materially even after you become safe, secure and powerful. But your mental outlook and your actual ability to live an excellent life will change.

On most days, in most ways, you can live that confident and uplifting life using exactly the tools you have at hand already. Which you are mostly doing. So kudos to you! Mentioning all of this in hopes that it can invite you to shift from a feeling of desperation to a feeling of calm and abundant confidence, of overall wellbeing, ASAP /quote]

Note: This advice was given to me by BicycleB under the context of just starting out and battling to feel like I'm gaining ground. My mindset is so important in this journey, and like the advice says, I have the tools I need to start living that confident and uplifting life now.




degrom7

  • Stubble
  • **
  • Posts: 141
  • Location: NY
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #2 on: October 10, 2019, 05:10:37 PM »
Visit JL Collinís blog and read his stock series. Then afterwards, get his book, ďThe Simple Path to WealthĒ.


Sent from my iPhone using Tapatalk

LonerMatt

  • Handlebar Stache
  • *****
  • Posts: 1032
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #3 on: October 10, 2019, 09:02:48 PM »
Justifying a miserable present for an idealised future is a tricky balance. It's better to enjoy what you're doing and build towards the future more slowly, rather than burn out hoping to reach the 'end goal' faster.

Every situation and lifestyle involves dis-satisfaction and restlessness, the best thing to do is choose which forms of dis-satisfaction you can live with and scrap the things you don't want to live with. Having money in the bank doesn't make all (most?) problems disappear, so be careful to make choices to increase wellbeing, even if they delay FI or make it an impossibility.

kei te pai

  • Bristles
  • ***
  • Posts: 421
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #4 on: October 10, 2019, 10:06:26 PM »
Track your spending. Be honest with yourself about where your money goes, and the difference between a want and a need.

pbkmaine

  • Walrus Stache
  • *******
  • Posts: 8337
  • Age: 63
  • Location: The Villages, Florida
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #5 on: October 10, 2019, 11:34:34 PM »
Make it a game instead of a struggle.

11ducks

  • Pencil Stache
  • ****
  • Posts: 575
  • Location: Duckville, Australia
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #6 on: October 11, 2019, 01:25:41 AM »
Don't get discouraged because it is taking so long, or that you can only start with small amounts. You won't be rich overnight, or this year, sure. But you will look back in 5 years time and be amazed by how the little changes have compounded and how much you have been able to improve your financial picture.

Omy

  • Pencil Stache
  • ****
  • Posts: 591
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #7 on: October 11, 2019, 02:14:22 AM »
Save and invest more than you spend - the magic of compounding does the rest.

gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #8 on: October 11, 2019, 08:00:51 AM »
Solid advice here. Thanks for your responses. Letís see if we can get more!

FI45RE

  • 5 O'Clock Shadow
  • *
  • Posts: 55
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #9 on: October 11, 2019, 09:35:45 AM »
Track your spending. Be honest with yourself about where your money goes, and the difference between a want and a need.

I second this!

gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #10 on: October 11, 2019, 09:38:57 AM »
Track your spending. Be honest with yourself about where your money goes, and the difference between a want and a need.

I second this!

Yes, many people have no idea where their money is going. In the past when I would go over every single line on my statement and I analyze it, it usually surprised me. That problem has largely disappeared for me since finding MMM.

RyanAtTanagra

  • Handlebar Stache
  • *****
  • Posts: 1177
  • Location: SF Bay, CA
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #11 on: October 11, 2019, 09:47:25 AM »
Might be advice more for starting a life rather than starting a FIRE journey, but 'don't design your life to require your entire paycheck', which is what most people seem to do, then complain about how it's impossible to save.  Well of course you can't save, you got the most expensive apartment/house and car you could afford with your paycheck.

Also, however much you think it costs to live well, you can find happy people making less money than that.  So whenever you think you've cut things to the minimum possible, look around to others for ideas on where you still have waste.

FINate

  • Handlebar Stache
  • *****
  • Posts: 1771
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #12 on: October 11, 2019, 10:22:54 AM »
Think big while taking small steps. FIRE is a big life-goal and can be overwhelming. You're playing a long game, at least 10 years if not more. The key is to have a sustainable trajectory and to be moving in the right direction. Don't attempt to do all the things at once, and don't think that you're going to change your entire life on a dime, not gonna happen. Change itself is analogous to reaching FIRE: slow and steady wins the race.

So, pick one thing to focus on at a time. Start with low hanging fruit, things that are easy to change, and address these first. Once you've addressed an item and established a new norm, which could take a week or even months, then move on to the next. Make a habit of doing this and over a period of years you'll make substantial sustainable change.

And don't poo-poo the little things...lots of little things in aggregate add up to big things. Yes, that $5 daily coffee isn't going to break the bank, and I don't think it makes sense to pick on this as some kind of moral failing. BUT, $5 a day adds up over time. If a 20 year old invests instead of ingests $5/day, over 45 years (e.g. by traditional retirement age) this would grow to about $1M at 9% annual compounding growth.
« Last Edit: October 11, 2019, 12:01:23 PM by FINate »

Ann

  • Bristles
  • ***
  • Posts: 291
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #13 on: October 11, 2019, 11:14:06 AM »
Hereís something I had to tell myself when I started researching and reading about money-saving/FIRE/etc:  remember you do not have to do everything people suggest.  Do what you can.  Somethings you may never choose to do, even if most PF communities hail it as a basic tenets.  Thatís okay.  You can change your mind later or never.  Of course, if you change nothing then you will never advance your cause further.

(This was important for me, personally, because I would feel irritated and a little judged sitting alone in my apartment reading PF blogs and I would just have to shake my head and tell myself how silly that was!  Iím never going to be Pete or any day the other PF gurus ó but all I need to do was optimize *me*.)

Ladychips

  • Pencil Stache
  • ****
  • Posts: 563
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #14 on: October 11, 2019, 02:58:57 PM »
Related to what @RyanAtTanagra said about not designing a life that uses your whole paycheck, my piece of advice is to design your life to be as flexible as possible.  Don't limit your options (takes your check to make your mortgage) because you are one crappy boss/one technology advancement/one recession away from no job/a job you hate.  Design your life so that you can make a different decision that's better for you than the poor guy who has to work for a crappy boss/take the first job he can find to make that mortgage payment.

And probably my more concrete advice (but it's still the same advice) is don't start out in a hole by taking out student loans unless you HAVE to have them to eat, don't borrow money to buy that new car because you now have a 'real' job, don't buy brand new furniture for every room in your new house.  Don't bury yourself in debt before you even have a chanced to breathe.  Breathe first (save your funds---they add up quickly if you aren't making debt payments) THEN buy the stuff you want.


Greystache

  • Bristles
  • ***
  • Posts: 322
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #15 on: October 12, 2019, 08:18:53 AM »
I will pass along my two biggest mistakes/regrets and hopefully you can learn something from them.
First, learn to be self sufficient. My biggest mistake was hiring a financial adviser who charged me 1.5% of assets under management. I wish I had listened to my boss who told me I should educate myself and manage my own investments. It would have saved me tens of thousands of dollars. A good place to start in A Simple Path to Wealth by Collins.
Second, Have a plan. Don't just start drastically cutting spending. Figure out what your core values are and what is truly important to your and what really makes you happy.  Optimize your life, your spending and your investments around these things.  FIRE is not about deprivation and sacrifice so you can stop working. It is about optimizing your life so you can achieve your goals. A good resource is Your Money or Your Life by Robbins and Dominguez.

NV Teacher

  • Pencil Stache
  • ****
  • Posts: 509
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #16 on: October 12, 2019, 09:23:44 AM »
Track your spending. Be honest with yourself about where your money goes, and the difference between a want and a need.

Ditto.  Knowing where your money goes is priority one.

SunnyDays

  • Handlebar Stache
  • *****
  • Posts: 1181
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #17 on: October 12, 2019, 10:15:42 AM »
(save your funds---they add up quickly if you aren't making debt payments) THEN buy the stuff you want.

Long before I heard of MMM, I learned the concept of Pay Yourself First.  As in, allocate your savings before you start spending.  Then live off the rest.  You won't miss what you don't see.  Best if you automate those savings so that you DON'T see them.  Worked well for me.

Sandi_k

  • 5 O'Clock Shadow
  • *
  • Posts: 54
  • Location: California
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #18 on: October 12, 2019, 11:04:57 AM »
Use a calculator like paycheckcity.com, and estimate your first paycheck. And then AUTOMATE your savings. You can't (easily) spend what isn't in your bank account.

And then every time you get a raise, put half of it (at least) into that retirement account automatically.

MoolahLula

  • Bristles
  • ***
  • Posts: 411
  • Location: Moolastan
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #19 on: October 12, 2019, 11:23:47 AM »
I would echo some of the great advice above, plus, surround yourself with likeminded people.  Not spendypants friends who are gonna drive ridiculous cars and live in mansions, but instead opt for deeper friends who will max out their retirement accounts and offer you a lift in their Prius when you need it. 

RyanAtTanagra

  • Handlebar Stache
  • *****
  • Posts: 1177
  • Location: SF Bay, CA
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #20 on: October 12, 2019, 11:40:50 AM »
I would echo some of the great advice above, plus, surround yourself with likeminded people.

Good addition!  This can be critical.  It's hard to save significantly more than your friends if most of their activities involve spending money.  If you can't find FIRE people, hang out with friends that are broke and can't afford to do expensive things.

mistymoney

  • Pencil Stache
  • ****
  • Posts: 575
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #21 on: October 12, 2019, 12:21:55 PM »
(save your funds---they add up quickly if you aren't making debt payments) THEN buy the stuff you want.

Long before I heard of MMM, I learned the concept of Pay Yourself First.  As in, allocate your savings before you start spending.  Then live off the rest.  You won't miss what you don't see.  Best if you automate those savings so that you DON'T see them.  Worked well for me.

this was going to be my input as well.

gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #22 on: October 13, 2019, 03:30:01 PM »
All excellent thoughts. Thank you!

35andFI

  • Bristles
  • ***
  • Posts: 278
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #23 on: October 13, 2019, 04:13:07 PM »
I think the following 7 steps would be good advice for someone getting started.

1) Track your spending (Mint makes it easy)
2) Track your Net Worth for use as a financial scorecard (I prefer Personal Capital and Excel but you can use Mint here too)
3) Adjust your spending if needed (you can research what others spend and how they do it)
4) Get your income up
5) Beware of lifestyle inflation
6) Pay yourself first (See Investment Order thread)
7) Live beneath your means with what is left (Focusing specifically on reducing housing, food, and transportation expenses)

Here are some more specific things that have/are helping me:

Learn to enjoy the outdoors, ride a bicycle, lift weights, eat healthy, be honest, spend time around the type of people that you want to be like, question the norm, love who you are, DIY everything, and continuously work on life optimization.

gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #24 on: October 13, 2019, 04:31:29 PM »
I think the following 7 steps would be good advice for someone getting started.

1) Track your spending (Mint makes it easy)
2) Track your Net Worth for use as a financial scorecard (I prefer Personal Capital and Excel but you can use Mint here too)
3) Adjust your spending if needed (you can research what others spend and how they do it)
4) Get your income up
5) Beware of lifestyle inflation
6) Pay yourself first (See Investment Order thread)
7) Live beneath your means with what is left (Focusing specifically on reducing housing, food, and transportation expenses)

Here are some more specific things that have/are helping me:

Learn to enjoy the outdoors, ride a bicycle, lift weights, eat healthy, be honest, spend time around the type of people that you want to be like, question the norm, love who you are, DIY everything, and continuously work on life optimization.

Amazing! Thank you. Iíd love to see this thread lend a hand in getting other beginners started and confident in the pursuit of their goals.

The_Big_H

  • Stubble
  • **
  • Posts: 151
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #25 on: October 13, 2019, 09:53:23 PM »
Be very very aware of the hedonistic treadmill (lifestyle inflation).

If you are relatively young, start out with a lifestyle that reflects your entry level salary plus reasonably rapid student load debt payoff.  This means living like a college student as a young professional.
When you pay your debt off, 33% rule.   1/3 of the payment that was going to debt is allowed to go lifestyle increase (the rest goes to investments / emergency fund build up)
As you get pay increases, 33% rule.  1/3 of the net pay increase is allowed to lifestyle (the rest to investments / house down payment / mortage pay down).
So you'll have that entry level professional lifestyle at near the peak earning potential of your career.  Its a fine and dandy lifestyle level, all needs are covered, plenty of room for a modest amount of luxury.

Mellow Mallow

  • 5 O'Clock Shadow
  • *
  • Posts: 71
  • Location: Australia
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #26 on: October 14, 2019, 02:26:13 AM »
Bring your sweetheart with you.

Linea_Norway

  • Walrus Stache
  • *******
  • Posts: 6844
  • Location: Norway
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #27 on: October 14, 2019, 03:02:35 AM »
Read the blog really well and take it to heart. It usually questions things that you took for granted and have become your lifestyle creep. You can save a lot more than you think, just by rethinking your life.

For every big expense you want to make, or for the choice of your current home/car, just consider: is it worth working longer to finance it, or is my freedom more important? That puts so many purchases in a whole different perspective.
And as the blog describes, multiply small, recurring expenses as the cost over 10 years including expected market growth and see if it is still worth buying it.

And don't forget that it isn't about depriving yourself of everything. You should still have a good life, based on a cheaper way of living.

rudged

  • 5 O'Clock Shadow
  • *
  • Posts: 96
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #28 on: October 14, 2019, 10:05:43 AM »
1. Your rate of savings is more important than how you invest.
2. Invest in broad based index funds with low fees.
3. The first $100,000 takes the longest to acquire.
4. It is only after about 11 years of investing that the impact of your investments (i.e. dividends reinvested) start to overtake regular contributions.

https://www.getrichslowly.org/building-wealth/

Laura33

  • Magnum Stache
  • ******
  • Posts: 2766
  • Location: Mid-Atlantic
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #29 on: October 14, 2019, 02:22:42 PM »
This:

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Everything is a choice, and every choice has a consequence.  You can choose to live up to your salary; the consequence is that you will need to work forever or be poor.  Or you can make a different choice, if you are willing to live with a little less and opt out of the "mine's bigger than yours" game; the consequence of that choice is less daily ego stroking, but infinitely more freedom and independence.  Make the choice that best suits what you want out of life over the long term, not the brightshinytempting right in front of you.

Or to be less metaphysical and more direct, I will tell you what I will tell my daughter when she gets her first paying job:  always save at least 20% of your income towards retirement, more if you can.  If/when you partner up, live on one income, save the other.

gannowar

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 27
  • Location: Ottawa
Re: Best Piece of Advice You Can Give Someone Just Beginning?
« Reply #30 on: October 16, 2019, 09:12:56 AM »
Great thread, everyone. Thank you for all of your contributions.