I’ve been pretty fortunate over the years, generally having jobs that have paid me well.
But I’d like to think that that’s only half the story. After all, I was making half what I’m making now and still enjoyed a pretty good life in San Francisco – and I was making one-third of that when I was living in Chicago and I was having a blast then. (Of course the $300 a-month rent made that possible!)
There are times that I’m amazed that I’m able to travel to Africa, with a nice camera, all while not having a job.
But then again, I like to think that some of that fortune comes from the decisions that I make.
I’ve been pretty good about saving money over the years, and not living above my means. I haven’t carried a credit card balance for many years now, I’ve paid off my car and motorcycle loans early, and I’ve maximized my 401k contributions for a long time. This is all because, as I’ve indicated above, I make a pretty decent salary – but it’s also because of the choices I’m making. I prioritize what’s important to me (traveling, friends) and I skip over the things that aren’t (new furniture, new cars). One of the mantras I try to live by is: experiences, not stuff. I try to prioritize experiences that will live with me forever over stuff that just accumulates.
This isn’t always easy, of course. I’m not above temptation of the latest gadget any more than anyone else. But I do try to avoid the temptation when I can. I remove myself from emails from retailers; I try to get rid of the catalogs that get sent in the mail; I avoid Best Buy when possible.. And probably most effectively, I keep myself busy. It’s when I’m bored and find myself window shopping that I’ll end up with some purchase that somehow happened.
This has all been on my mind lately as I look at the economy around the world. For the longest time I’ve been wary of unbridled capitalism – and I’ve been concerned about where growth for growth’s sake would take us. And I’ve been amazed and jealous at the way people have lived their lives. But now I’d like to think that some of that has come crashing down. Unfortunately it’s impacted so many in such detrimental ways but hopefully we’ll be able to find a way to come out of this on the other side with more people conscious of their finances and what they need to keep them in a more healthy state.
Having said all of this, I don’t think I’m impervious to the bad economy. I haven’t been that golden in my activities (did I mention I went to freakin Africa without a job!). And as such, I’ve ramped up my savings over the past 6 months to build up a cushion in case things do go sour.
Hopefully though the more optimistic projections will take hold and we’ll see things start to turn around in the next few months. I hope so. That 401k savings is just not what it used to be!
Glad to hear you are doing OK and weathering things. Dude, I sent you an email on 3/17/08 titled, “Worries of a Bad Recession.” I actually shifted my 401k to bonds about a year ago, so my 401k is actually up in the last year, but even preparing for a downturn a year ago, my portfolio still got hit by the stupid eBay stock. I thought it would weather the recession better than it did (during the dot com, tons of people signed up for eBay to sell their stuff). Hope things turn around soon, though; I actually know quite a few people who have been hit hard.
I was not so proactive as you (I remember the email, and I remember my skepticism over the need to be so aggressive…).
But that said, I did have about 30% of my IRA (401k) in a cash position so I didn't get hit that hard.
All told, at the trough-to-date low my investments were down about 30 – 35% which was a pretty big hit. It basically wiped out any gains I've had over the years from my 401k, reducing me to my initial contributions.
In the past month I've recovered some from that low, and I'm currently down only about 25-30%. Not great, but better.
I feel fortunate on many levels for sure, but I will say this. I'm questioning this whole 401k thing. I've never worked at companies with robust matching programs, and I just don't see how contributing (even the maximum amount) is anywhere near the amount of cash I'll need. Bring back the pension!
I was not so proactive as you (I remember the email, and I remember my skepticism over the need to be so aggressive…).
But that said, I did have about 30% of my IRA (401k) in a cash position so I didn't get hit that hard.
All told, at the trough-to-date low my investments were down about 30 – 35% which was a pretty big hit. It basically wiped out any gains I've had over the years from my 401k, reducing me to my initial contributions.
In the past month I've recovered some from that low, and I'm currently down only about 25-30%. Not great, but better.
I feel fortunate on many levels for sure, but I will say this. I'm questioning this whole 401k thing. I've never worked at companies with robust matching programs, and I just don't see how contributing (even the maximum amount) is anywhere near the amount of cash I'll need. Bring back the pension!