I’ve pondered this question often. Of others. Of myself.
If you’re so smart, why aren’t you retired already?
I’ll speak for myself….a few reasons why I’m not retired now, or soon.
- I invested in high-priced mutual fund products for far too long
In my 20s, I invested in mutual funds that charged money management fees close to 2%. Back then I simply didn’t know how much those fund fees would eat into my investment returns. On top of that, I had no idea that most mutual fund managers have no hope of beating their benchmark index, even after a few years let alone after many years.
I’ve seen the light…
I don’t invest in pricey mutual funds anymore for these key reasons:
- I can (and do) get market-like returns through index investing.
- I’ve learned that buying and holding a diverse basket of dividend paying stocks can deliver dividend income that can grow over time.
- I tinkered too much with my portfolio
As a novice investor in my 20s I was very guilty of chasing the hottest products. So, not only did I pay sizeable money management fees (see #1 above) for my mutual funds but I also chased the performance of those funds. This was a massive double-whammy.
No more whammies. Not only are the pricey funds long gone but so is the bad investing behaviour. I buy, I hold and when the market crashes or dips I buy more. I’ve learned to train my investing brain and so can you. If you need help you can find it here.
- I wasn’t engaged in the process
In my 20s, I was more concerned about having fun than investing. I didn’t save very much money in my 20s. Fun is still very important but so is investing to me, and investing is now fun too. Not casino-fun-let’s-blow-some-cash-or-make-it-rain-kinda-fun. More like, save, invest, give it time, watch-it-grow-kinda-fun. Nerdy? Maybe. Financial flexibility eventually? Absolutely.
Start this blog. Share what I know. Share what I don’t know. Learn about myself. Learn from others. Grow personally.
Looking back, had I not invested in costly financial products for about 10 years too long, had I not tinkered with my portfolio, had I been more engaged in the financial process and been ultra-frugal I probably could have reached semi-retirement by now.
Then again, that journey has made me who I am today and brought me to the here and now. I wouldn’t change a thing.