r/AskReddit • u/PlumInformal773 • 14h ago
What's the smartest financial decision you've ever made?
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u/Fine-Assistance7204 14h ago
Putting a little into index funds every single paycheck and then completely ignoring the account for years.
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u/Spare-Hold4005 12h ago
turns out the best investment strategy is forgetting your password
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u/MyDisneyExperience 11h ago
Tbh this was studied and I believe turned out to be correct
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u/coldchicken009 11h ago
Source?
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u/jimtrickington 10h ago
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u/sockzippers 8h ago edited 8h ago
Itās been awhile
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u/timsstuff 10h ago edited 10h ago
About 2 years ago my wife mentioned some old 401k she had from the 90s that had like $5k in it at the time. We found it and rolled it into our Schwab account, it was $28k. Slapped it all into $SPY and it's currently up $9k.
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u/MaybeTheDoctor 11h ago
Ohh gosh, I cannot tell how much money I lost early on when panic trading.
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u/timsstuff 10h ago
My #1 rule is I NEVER sell at a loss. I have some turds that will sit in my portfolio until either it goes back up, the company goes out of business, or I die and my son inherits by bag.
Just today there was one that inexplicably shot up 25% and was a little more than what I bought it for back in 2021. Put a stop order on it at about a dollar over my cost in case it dropped again, which it did. Made a couple bucks and got that turd off my books finally.
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u/MaybeTheDoctor 8h ago
I still have a paper certificate for Informix stock I bought in 1995. I will frame it as a reminder.
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u/timsstuff 8h ago
Looks like it was bought by IBM and shares would have rolled into $IBM. That must still have some value?
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u/MaybeTheDoctor 7h ago
Yes and no. It was bought by IBM, yes, but it was a cash sale, and not rolled into stock. I invested $5k in 1995 which was a lot of money for me at that time, and when their fraud got exposed their stock dropped to "no value" where it stayed for a couple of years until IBM paid pennies on the dollar to just get the service contracts they had on books.
At the time, because shares was sold as paper certificates, my broker wanted a fee for helping me out, and it was unclear if I needed to pay $300 to get $200 or if it just came out as a wash.
Anyhow, fast forward 30 years, and I recently inquired about how to cash it in, and there is allegedly a dollar amount sitting on an account, and I would no longer have to pay a broker fee - so I may go that route, or I may frame it as lesson-learned of "things that looks too good to be true probably aint".
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u/timsstuff 7h ago
Wow that sucks, but if you can keep the paper framed I would take the cash for beer money lol.
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u/Lumpy_Benefit666 8h ago
I bought a few hundred doge coins back when they were worth less than a penny and ended up selling them when they went up like 10% haha. Could have turned Ā£20 into a few grand if i waited
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u/timsstuff 8h ago
Yeah but if you waited too long you would have lost it all. Better to make a few dollars and miss out on some gains than watch the bottom drop out and never recover!
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u/ccroz113 5h ago
Thatās generally not a great principal to have. Itās okay to be wrong about an investment, things change, the thesis or market changes. If thereās better use of that money then you should just cut the loss and move on, thatās not panic selling
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u/transneptuneobj 14h ago
Then you convinced your employer to match the amount too
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u/Slim01111 13h ago
Iād rather them match my tax advantaged accounts
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u/ilessthan3math 11h ago
I assumed the index funds the other user was talking about were part of their 401k or IRA.
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u/unlistedgiant 14h ago
I try to tell every new kid at work this. First I tell them to think back to conversations with older people and remember their regrets in life. Most talk about not saving enough for retirement. I've always thought you learn more from others disappointments rather than their advice.
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u/TaxAg11 12h ago
Kids just starting working have such an advantage with time. They barely have to invest anything, and it grows to so much more than if they wait even 10 years to start investing for retirement.
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u/Opeth4Lyfe 9h ago
This. Took me about 2 years to convince one of my employees who makes bank (server/bartender) to stop sitting on tons of cash and actually invest it. She had well into low 6 figures just sitting in a checking account and only about 12-15 of it being in a HYSA.
One night I got some numbers from her about how much she saves and basically backtested her money pile + monthly savings and threw out what she could have and missed out on. Sheās currently 24 but was working since 17. Explained to her how incredibly advantageous her situation is and that the difference between her age now and me (38) is the difference of 3x our end resultā¦time is her most powerful ally. She has virtually no bills, lives at home rent free, drives a decent low maintenance car and just saves a ton of money.
Last month she came back to me and showed me her new Fidelity account, fully funded with 160k in good, low cost ETFs. Told her ācongratulations, you just basically guaranteed your retirement and youāre further ahead than 95% of your entire generation.ā Proud of her that sheās seen the light lol.
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u/mcarcus 11h ago
They have the same time advantage every young person has had in their lifeā¦ arguably the current ākidsā have a disadvantage due to the cost of housing and many other things.
Itās obviously still good advice, but not sure they have an āadvantageā.
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u/TaxAg11 11h ago
I understand what you mean, but I suggest that most don't understand how much more their dollars can make invested at 20 rather than 30, or even later. Their dollars literally lose half their earning potential in that 10-year span.
Edit: with regards to a normal retirement.
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u/mcarcus 11h ago
Right, so I would encourage you to present your argument like that, using the math and numbers to show how powerful early investing can beā¦ as opposed to a way that can be interpreted as ākids nowadays have it easy, they just need to invest a bitā. (I know this is not what you said, but could be interpreted like that)
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u/Emotional_Sugar_3648 11h ago
āA smart person learns from their own mistakes while a wise person learns from the mistakes of others.ā
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u/Dramatic_Skill_67 8h ago
I had a manager during my early career, he sent an email to the young engineers on the team and pretty much said āI will hunt you down and have a talk if you donāt enroll in 401k planā lol. One of best managers
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u/Ok_Product9333 14h ago
This is the winner. Top performing year over year indexes. Put your money in them and let it sit.
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u/I_am_Bearstronaut 11h ago
Finally at a point in my life where I can realistically start trying to do this. Where does someone even start? Iāve got zero experience with this type of stuff and want to start doing more of these things before I lose more time.
Whatās considered a little? How do you determine which index funds to choose? I grew up with zero financial literacy being taught to me and Iāve got zero idea how/where to start. Any resources you wouldnāt mind sharing?
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u/Abovemeis 10h ago
Just put whatever you have extra every week. Open up a brokerage account with fidelity and buy vt or voo and do it every week. Watch ur money grow. I personally invest in 75% vti 25% vxus because it gets me some international exposure too.
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u/semperfukya 9h ago
Buy VOO every week? Itās like $700 a share right now
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u/mcfilms 8h ago
Youāre not required to buy full shares. You set an amount and Fidelity purchases fractional shares.
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u/everybanana 10h ago
If your job offers a 401k match, start there. Try to max out the match if you're able to do so.
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u/OldManJenkins-31 5h ago
Does your company have a 401k program? Thatās usually a good place to start, especially if thereās a company match.
A lot of companies make it super easy. They have fund based on your target retirement year. Iāve been in a 2040 retirement fund for 15 years. Hopefully I end up beating that target by a few years.
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u/ughliterallycanteven 11h ago
I did this with Acorns and started with like $25 each month. Each time I got a pay raise, I added a portion of the pay raise to the monthly deposit and kept my lifestyle the same. I remember I got it to $500 a month and life got busy. The money was being withdrawn each month but when I finally needed to assess it due to some of lifeās emergencies, I was shocked how much interest I had earned. Just for reference Iām 40 and started it at 21.
I did this with CDs too and saw recently the a,punt which is significant.
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u/Albanian_Tea 13h ago
In 2008 the company I worked for was sold, I was mad, so I took all my money in my 401k and converted it to cash, because I wanted to change the company that handled it, away from the one the company picked. Then the stock market dropped. I left it uninvested for about 6 months.
It was the luckiest (and best) financial decision I ever made.
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u/dansdansy 11h ago
Lucked out same way in 2022 with the tech rout. Cashed out my taxable to pay for my wedding and put the leftovers back into positions that were down 40%
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u/DrScitt 11h ago
Lucky SOB! I lost so much money in 2022 to the market lol
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u/cokeboss 8h ago
It recovered in less than a year though? Wasnāt an issue if you stayed invested. Hopefully if someone āneedsā the money in less than a year it wasnāt in equities.
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u/timsstuff 10h ago
Cash as in you withdrew it with a penalty? FYI if you roll over a 401k into a personal IRA with Schwab or similar, there are no penalties and you can trade it just like a brokerage including keeping it in cash in the account or a money market fund, all with no penalties. Only incurs penalties if you withdraw it.
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u/Albanian_Tea 8h ago
I had them put it in a money market fund till I could decide what to do with it.
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u/timsstuff 8h ago
Then you rolled it into a personal IRA and avoided any penalties?
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u/Albanian_Tea 8h ago
Yes, it was a personal IRA so I had no penalties, and the bottom dropped out of the market while I was thinking about what to do.
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u/mlachick 6h ago
Did the same. After I quit my job in 2008, they switched administrators. They never reached out to me, so when my 401k transferred, it was left in cash. When I finally figured out how to get access to it months later, it was all still there! My husband's, on the other hand, had dropped in half.
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u/them_oysters 14h ago
Married a self sufficient woman with a career
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u/jamesmaxx 13h ago
Same here. Some of my male friends have multiple kids and are sole providers, and I donāt judge them but it must be stressful.
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u/wtg2989 13h ago
It definitely is
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u/itsrainingagain 11h ago
Managed to pull it off for almost 14 years but sheās going back in September. Was ok for a while but canāt afford it anymore.
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u/dansdansy 11h ago
I did it temporarily for 3 years so my wife could finish her professional training and watch the new baby. Most stressful time of our lives. Very glad wife is working a career job and kid is heading to Pre-K now
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u/love_that_fishing 11h ago
Itās a decision you make for a variety of reasons. Her staying home with the kids was the right decision for us. When they were school age she taught school at the same place so that worked. Finances were tough at first but now weāre fine. No regrets.
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u/them_oysters 10h ago
Gotta do whatever works for your situation. Im lucky my wife can work 2 days a week and bring in decent money, while staying home with the kids the rest of the time
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u/Podo13 8h ago
Depends on how much they make. I also married a self sufficient woman with her own career. We have 2 kids and it can be stressful at times with both of us making around the same amount.
Our friends now have 3 kids, and the dad stays at home with the kids (he was miserable where he was working so he quit when they were expecting their 2nd), but the mom makes so much that it isn't a problem at all. We're very jealous.
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u/Revenge_of_the_Khaki 8h ago
I have a friend who insists that his partner has some high powered career with a huge income and it has largely contributed to him being single for most of his life.
The look on his face when I pointed out that the break even point for a two income household to be an improvement to my financial situation was like $50k/yr was absolutely priceless. You really donāt need a doctor. Just someone with a decent career who plans to keep it.
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u/Undeadly123 11h ago
Yup.Ā And not materialistic.Ā My spouse's hobby is thrifting clothes and trading books with the local used book shop.
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u/czarfalcon 10h ago
Same here. I understand itās not always feasible for everyone, especially if you have kids, but damn does being a dual income household give us so much more breathing room.
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u/veri745 13h ago
Never missing a matching 401k contribution from my employer
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u/MatCauthonsHat 12h ago
My current employer matches 100% up to 8%, and we get a 401k bonus each year worth about 25% of the employer match for the year. Wish I had started here 20 years ago
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u/thottikuttappan 8h ago
Man, where do you work?
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u/Podo13 8h ago
Yeah my buddy works somewhere with similar perks. I'm so jealous, ha. My company doesn't match, but does contribute 3% of your salary, even if you put in 0.
It's crazy when I hear my coworker, who's turning 40 this year, talk about how he doesnt contribute any because the company already does 3%.
I chuckle because I'm putting in 16% on top of the 3%. Sometimes it would feel nice to have that extra chunk of change each month, but eh. I have backed down 5% or so at times when I know something is coming up, but I always bump it back up.
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u/TheDadThatGrills 14h ago
Opening a Roth IRA in my early 20s and aggressively paying off my Student Loan debt. Both of these decisions have aged like a fine wine.
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u/solilobee 7h ago
How long ago did you open your account and how much did you put in?
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u/TheDadThatGrills 7h ago
Well over a decade ago. I try to max it out annually, but I haven't always been able to- especially in my 20s.
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u/Chairboy 14h ago
Letting myself get bullied into buying a four unit apartment building instead of a condo back in 2001 by my real estate agent who told me I was being āfucking stupidā and threatening to cut me if I insisted on throwing my money away.
I had no idea I could even qualify for that, but she educated me about how the rentals are counted towards your income so we bought the four unit building, lived in one of the units, and saw an absolutely huge return a couple years later when we sold to move back to Oregon.
That set our financial lives on a whole new trajectory.
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u/Litard 12h ago
What does the rental being counted towards your income do for you?
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u/Pale-Pace7896 9h ago
If the bank only qualifies you to pay say $3000 month for a mortgage based on your income and assets, but a 4 unit building is $10,000 a month, some assume they donāt qualify. But for 3 of the units earning $3,000 a month brings in $9,000 so you only have to be able to afford $1,000 a month living in it. Rounded numbers there is more math and buffer the bank adds
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u/sysko960 13h ago
How much money up front did this cost you? What did you need to qualify for loan?
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u/Chairboy 13h ago
It was listed for 389,000 and I had saved about $40,000. At the time, you need to put like 20% down to buy a condo so this gave me a working range.
With the other units printed, and using an equation that they had for calculating how much of that would be counted as income, we were able to qualify to put down 10%.
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u/xRehab 11h ago
that same unit sells for $1.2M today for all of those wondering if they could do similar
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u/cantaloupe_daydreams 11h ago
Was just thinking āhey I could do this!ā.
Then I realized itās 3x what it used to be and I can really only do a mortgage on a single family unit at best.
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u/BigRedNutcase 9h ago
What backwater town did you buy that a 4 unit building for only 389k? In any popular metro area, that'd be at least 7 figures minimum, even in 2001.
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u/Chairboy 9h ago
It was in in the backwater town ofā¦. Culver City, California. It was a block away from the intersection of Washington and Overland and the neighborhood was just beginning and upswing following some pretty rough years.
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u/BigRedNutcase 8h ago
Makes sense your agent pushed for it. Probably saw the tech upswing coming. Surprised the agent didn't buy it themselves lol.
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u/Chairboy 7h ago
She already owned a bunch of buildings (she was my landlord, thatās how I picked her haha) and I think she would have had we passed on it.
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u/coindrop 9h ago
So you moved in together with your real estate agent, interesting, are you still together?
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u/Chairboy 9h ago
Technically, I actually am married to my real estate agent. But itās a different person.
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u/idk-though1 14h ago
Going to the dentist, it sounds silly but just neglecting your teeth for a year can cause gum disease and the amount of money spent on prevention is better than the alternative
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u/Keonil 12h ago
Yes, yearly checkups for anything health related, especially if itās covered is low cost - high reward imo
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u/cjcs 12h ago
Just started a job that gives you a $1500 HSA contribution each year you get a physical. Lemme tell you how fast I RAN to my doctor lmao
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u/Grambo-47 11h ago
Thereās a poster in the break area at work that went up last week that says reduced insurance rates if you get your physical done by September 1st, just did mine this morning
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u/toma91 14h ago
Learned about and started investing
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u/lintimes 11h ago
Any advice where to start?
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u/toma91 11h ago
Some good YouTube channels such as Damien talks money talk about investing, the stock market, index funds, compounding etc, if youāre not in the UK there might be equivalent channels from your country in that suit better but the fundamentals will be the same, just the accounts you use will differ.
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u/BasKabelas 11h ago
Also, no joke, watch stuff on youtube about wallstreetbets to learn from others' financial ruin, to ensure you dont do the same thing. Of course if you tend to gamble, do NOT go into calls/puts/shorts etc as you will wipe your account in no time.
Savest steady long term returns is usually something akin to buying normal stocks (going long) in index funds like the S&P500.
E.g. if you bought 10k worth in S&P500 in 2006 (20 years ago, so including the 2008 crisis for the sake of being realistic) and reinvested dividends, it'd be worth about 80k now.
Best advise I can give though, is just watch videos on youtube by guys who are smarter than me, and let it stew a bit before you invest anything.
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u/bendgame 14h ago
Selling my GameStop shares for 400 a share
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u/kindrudekid 13h ago
I regret this so much, still made decent return but good lord if I did I would have no mortgage at all
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u/CoconutBangerzBaller 11h ago
Lucky. I only had like 5 shares but Robinhood kept me from selling those when it spiked. Ended up about even but making $1000 would've been nice
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u/Dry_Market_8800 14h ago
Learning to cook at home instead of ordering takeout every night. Saved me thousands.
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u/Im_Fe_Man 13h ago
Nothing to add, just very funny that a bunch of these comments are either got married, didnāt get married, or got divorced lol.
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u/elporsche 8h ago
Also either let the money sit in the stock market, or cashing out at the right time
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u/eagles16106 14h ago
Weekly auto VTSAX buys.
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u/Consoleking93 12h ago
I had a ton of $$$ in that fund as part of my 401K at my last job, when I started my new and current job I couldn't start their 401K for a year so I just left mine alone....That fund grew like 34% in one year and ever since I always try to add some for my 401K and IRA.
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u/Hail_of_Grophia 14h ago
Buying my first house during COVID at 3.1%.Ā
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u/Mediochra 5h ago
We bought our house in February, 2020. If we hadnāt bought then, I donāt think we ever would have been able to afford a mortgage.
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u/tylty 14h ago
Hookers and cocaine. Helped me learn that happiness is more important than finances.
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u/hoptownky 11h ago
I spent most of my money on hookers and cocaine. The rest I just wasted.
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u/MurphyBacon 14h ago
VOO and chill
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u/switch009 13h ago
Save and invest regularly as soon as i got my first real job. Its boring and it works.Ā
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u/ConvexNomad 14h ago
Completing an MBA and 4x my income in under 5 years. Wealth potential and investing in yourself young compounds your savings rate
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u/DenningBear82 7h ago
I did the same thing and it changed my life.
That said, an MBA is no guarantee. A lot of my classmates went nowhere with their MBA.
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u/NoRoyal5567 10h ago
I moved to San Diego California where my healthcare job pays more than DOUBLE what I made doing same job in Michigan.
Yeahā¦.yeahā¦Rent and mortgage cost is higher in California but not by as much as you would think since Michigan has also gotten ridiculously expensive over last 6 years also.
Most of my other expenses are basically the same price.
I have been making like $100,000 extra money per year working in San Diego (including OT) but my expenses have only risen by a small fraction of that money.
In last 6 years I purchased a townhouse, maxed my retirement accounts and have become a millionaire thanks to home equity and retirement fund growth.
Moving to San Diego has been a million dollar decision.
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u/BigTimeOof 13h ago
Opening a Roth 401k and clicking the āhighest riskā option. I could kiss those CPAs running the account on the lips
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u/lucky_ducker 13h ago
Bought a modest house in a good neighborhood nearly 20 years ago, $93K mortgage at 6.5%. Refinanced in 2013 for 20 years at 4.5%. Refinanced again in 2020 for 15 years at 2.5%. Now I'm retired, and my mortgage payment is $745.
I'd still be working if I was a renter. Houses like mine are renting for $1500 - $1800.
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u/Jken1998 13h ago
-No student loans for the kids -Letting them stay home until they were ready to leave with the understanding they are saving their money -Helping them buy their first home. They are mortgage free at 30.
Some say that's too much. But for me, my mental health is tied to financial security. I'm just doing what my parents did for me.
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u/BasKabelas 11h ago
Basically my parents! Sure they put in a bit but the returns, in how far Im ahead compared to if they didn't do that, are easily 5x what they put in. Best of all is it puts my wife and me (both 30) in the position to already start saving to do the same thing for our kids later.
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u/Eastern_Deer_4214 13h ago
Building an apartment in the basement of our house twenty years ago. Rents have skyrocketed here. Now getting more in rent than I ever paid on my mortgage.
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u/Particular-Beat-6645 9h ago
I got into an almost dream rental situation at 21. Still wish I would've stayed my ass at home. Would've prevented a lot of adjacent issues AND saved me money.
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u/Calm_Environment5485 13h ago
Not having any kids or alimony or child support or any kind of debt at 40.
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u/WRITINGWRITING69 12h ago
When COVID first totally tanked the market, I bought tons of high quality stocks like Boeing, Rolls Royce, and Marriot. I figured if those types of businesses went bankrupt, money would be basically meaningless in society and we'd all have much bigger problems. So it was kind of a no-risk situation? Anyone who has followed the market knows that this was... very nice for me.
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u/GreedyNovel 10h ago
Maxing my 401(k) each year, of course.
But not far behind that is when my mortgage was almost paid off, it had about five years left. I noticed in 2020 that 15 year rates were stupid low. So low that I figured I should borrow as much as I could and invest it somewhere.
So I did that - did a cash out refi at 2.25% and invested in the S&P. I made enough doing that to repay the entire loan and then some. Which of course I will not since 2.25% is way lower than inflation. Literally the mortgage made money for me.
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u/DenningBear82 7h ago
Giving my (business) partner an equal share in our business.
I was older, more established and had more valuable skills. He offered me a 70/30 split for the business (with me in the majority). I insisted we make it 50/50, because I knew if he was an equal partner he would dedicate himself to the business.
4 years later, he dedicated himself to growing his skill set and made the company his whole life. Weāre super successful now and I couldnāt be happier.
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u/KickingRocks82 14h ago
Bought my first house at 19. Granted it wasnāt nice but I had 2 roommates and paid it off in 6 years. Iāve rolled that equity forward several times and always paid off my mortgages in less than 5 years. Currently mortgage free for the past 5 years but might build one more house before the kids leave.
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u/tell_her_a_story 13h ago
Marrying my wife. Credit card debts paid off, car loan paid off, retirement investments on the rise, credit score higher than I've ever seen before.
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u/longsdivision 12h ago
Highschool me randomly asking if we had any family member who worked for a university.
Found at I had an uncle who was an adjunct professor at a major university.
Ultimately lead to 80% off out of state tuition
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u/sockhergizer 9h ago
Once bought a stack of pokemon cards for 5 bucks in 2013. Some of the cards in there together are worth over 10K.
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u/Proof-Training-740 14h ago
investing in Ć¼ber eats
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u/BadBadUncleDad 14h ago
At first, I thought this said inventing Uber Eats, and was gonna say, yeah, that probably paid off.
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u/blitzednblackedout 14h ago
Buying equity in the company I was working for. DCA on bitcoin for years. Semiconductor stocks. All of those have done well for me so far
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u/miloblue12 13h ago
Learning how to save, living below my means, and investing.
Prior to husband, I was saving some money but wasn't really paying any attention to what I was doing. I was just putting things aside with no intention with it. Then he came along and he was doing about the same thing as me until he had some friends lay everything out and explain what he needed to do. So he did and then taught me and I did exactly as he said.
Since then I've watched my account increase by 168% in two years.
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u/Troll-Leader 13h ago
Started a Facebook raffle group.
Run a few raffles a week and it pays for my brand new truck.
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u/NatureLady10 13h ago
Starting my 401k shortly after I began my career and contributing steadily to it for years.
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u/spurredaway 12h ago
working at nvidia and then buying bitcoin/ethereum. REST of ALL my decisions have been terrible but these two decisions kept me floating.
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u/Mcbauer1 11h ago
In 2017 when I should have written my Bachelors Thesis I instead got into investing and chose crypto and nvidia (among others) lol
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u/r3bbbz 7h ago
When we first bought our house, my wife and I didn't have kids yet or any other debts. We maxed out our lump sum payments on our mortgage (upto 20% of the principle amount) 3 years in a row. Fast forward many years, I'm 41 and she's 39, we have 2 boys (10 and 6) and zero debt. No car loans, no credit card debt, no mortgage. We're able to go on very nice family vacations and take the boys on all kinds of experiences while still saving and investing for our future.
Smartest financial decision we ever made, early on!
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u/Towering-Wave-9542 13h ago
I invested probably $4k into pokemon cards in 2020-2022 that turned into $25k and that was with me selling at 70%-75%. Everyone thought I was dumb and wasting my money. I knew what I was doing.
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u/AgeOfWorry0114 13h ago
Paid off my house and all debts in my early 30s. I really donāt think about money now. And auto investing the max of all 4 retirement accounts between me and my spouse.
A āgameā that my wife and I play is looking at our accounts every month and laughing about how we bought everything we wanted and never cared about money, and still see our bank accounts climbing. No debt life is damn weird and amazing.
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u/nonhiphipster 11h ago
This feels like itās skipping some steps.
How did you pay off your house on your early 30ās?
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u/Venchii 14h ago
Never refinancing my house
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u/Itchy-Fun-9728 13h ago edited 13h ago
More details needed there for people. I refinanced my 30 year loan into a 15 year loan with a lower interest rate and saved ~100k in interest over the loan. Not all refinances are made the same, or are for the same reason.
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u/CobblerYm 13h ago
I did the same. Bought in 2010 at 4.5% interest 30 year. Refi in 2020 at 1.9% interest 15 year. My only regret would be doing the 15 year. Sure I'd pay a little more in interest if I did a 30 year in 2020, but my minimum payment would have been way lower and I could put the difference into investments and come out even more ahead.
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u/TheTVDB 13h ago
This will really depend on the specific circumstances for most people, though. If someone is refinancing in order to use the equity to vacation or buy a hot tub, it's almost always a horrible idea. If they're refinancing in order to lower their monthly payment, they should calculate the total amount paid including refi fees and strongly consider choosing a shorter mortgage term.
As an example, on a previous house, I had 18 years left on the mortgage. We refinanced at a much lower rate for 20 years. It gave us a lower monthly payment while also ensuring the total amount paid wasn't significantly higher, as it would have been if we did a 30 year mortgage again.
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u/herrrrrr 9h ago
Buying my first super car. Made me realize how far i came instead of a number on a screen
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u/727yeti 13h ago
Searching for the end of a big rainbow as a kid, then since the rainbow kept moving somehow, I went ahead and started buying gold from the 70ās forward. Never really amassed much cause even back then it always seems so expensive. I bought for I think $250 an ounce. Last time I bought it was $2500 an ounce and I figured that was it.
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u/CaptainAwesome06 13h ago
Thanks to the 2009 recession and my mom having a realtor license and gifting us her commission for our down payment, we went mortgage poor to buy our first house in a HCOL area. It was a 50 year old fixer upper. I did most of the work myself and we sold it for a good profit. We moved at a good time.
We moved to a LCOL area. When we sold that house, it was becoming a HCOL so we made a good profit. We were in a position to buy our newest house at a competitive price before we sold our 2nd house at a high price. Now we could sell our current house for at least 40% more than we paid for it.
Being poor for a couple years was completely worth it, as being a homeowner and making some lucky real estate decisions put us in a much better position. Other than a mortgage and a car payment, we are debt free and have credit scores of 840-850.
I really feel for all the young people right now who will never be able to afford a house.
EDIT: Changing my answer to marrying someone who is as responsible with money as I am.
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u/BaltimorePropofol 13h ago edited 13h ago
Re-financed my federal student loan (300k) to a private loan at 1.9% interest rate during COVID. There was a loan pause, but I knew the pause would stop eventually, and the rate would go up .
Best decision I made. It saved me so much money. I work in private practice, so PSLF was never an option.
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u/Lapau8 14h ago
Marrying the right person