From money moves to fashion choices, we’re pretty much guaranteed to make mistakes in our youth. (Cue awkward yearbook photo.) Missteps go hand in hand with growing up, but as they say—with age comes wisdom.
These four stories are chock-full of financial hindsight from people who’ve been in the trenches for decades and learned valuable lessons along the way.
The Lesson: Not emotionally reacting to the market really pays off.
Bob Johnson, 59, CEO of a financial education institution in Bryn Mawr, Pa.:
“Thanks to decades of simple investing, I’ve reached my retirement goal early. As they say, it’s about time in the market—not timing the market. This isn’t novel advice, but sticking with it during market downturns is easier said than done. When things look grim, fear can cloud our judgment. But ignoring the noise and staying the course is actually the best wa y to grow your wealth over time.
I’ve had plenty of opportunities to put this to the test, like during the [2007-09 recession.] I never questioned my resolve, even when colleagues changed their investment strategies. Thankfully, I kept my feet planted—and ultimately benefited from the recovery and double-digit growth after.
Having a Ph.D. in investments probably helps; I understand that market volatility is the norm and not the exception. Putting my money in diversified, low-cost index funds early on, and sticking with them in good times and bad, is the best financial move I ever made. Why not let compound interest do the heavy lifting for you?”
The Lesson: When you can’t stretch your income any more, get creative with side hustles.
Judy Toone, 59, a financial coach in Sandy, Utah:
“Finding out-of-the-box ways to boost our income saved my family from financial disaster. In 1987, my husband Dennis worked in the finance department of a local garage door company, and his salary was enough for me to stay home with our four kids. We weren’t rich, but life was comfortable—until, without warning, Dennis was laid off.
He worked odd jobs and collected unemployment, but this was a huge blow. We immediately slashed our budget and cut corners wherever we could. But there are only so many expenses you can trim. We had to earn more.
On the weekends, I started working at a grocery store, and within a year, began running an at-home day care, which brought in $500 a month. Later, I’d do administrative work at our kids’ school. My side gigs shifted over the years and ranged from cleaning houses to doing temp work.
Dennis eventually landed a steady job, and our financial life evened out as we caught up on our savings. But the years in between taught us to hustle. I find it encouraging to see so many people these days embracing side gigs as I did. Done right, they can make all the difference.”
The Lesson: Start saving for retirement early and save yourself a lot of stress later.
Tim Wiedman, 66, a retired business professor in Ionia, Mich.:
“There’s one glaring mistake I made in my younger days: not opening a retirement account until my 30s. I started working at 21, which means I missed out on a decade of compound interest.
I blame it on a mix of ignorance and a fundamental lack of urgency. When you’re living on an entry-level salary, the idea of funneling money toward something decades away isn’t very appealing. Instead, I spent my disposable income on a car, furniture and other things I thought were more important at the time.
Read: How to save twice your salary (or more) by age 35
When I turned 31, I landed a promotion and raise, freeing up about $210 a month. I opened an IRA and began contributing whatever I could afford. I spent the next two decades routinely directing 12% of my income to that IRA and a 403(b), which came with an employer match. Yet I was still behind the retirement curve at 50. So I had to dial up my efforts, and I invested an extra $1,500 a year.
I retired at 62 with nearly $650,000, which has continued growing over the last couple of years. (I began taking Social Security not long after and get a small pension.) These income sources are enough to cover my expenses. But had I started earlier, my 50s would have been much less stressful, and I would have had a lot more come retirement.”
The Lesson: Debt is a major wealth-killer.
Marcia Noyes, 57, a communications director in New Braunfels, Texas:
“When my son was little and we had another baby on the way, my dream was to leave work and stay home with them. But living solely off my husband’s income and paying off our $10,000 credit card balance felt impossible — until we adopted a frugal mind-set that opened new doors for our family.
We hit garage sales for Christmas toys, opted for DIY haircuts and stuck to a strict budget. Landing an early buyout from my husband’s employer in the early ‘90s pushed us over the debt-free finish line—but we never changed our frugal ways. Our habits would keep debt—and financial worry—away for many years. When my husband passed away in 2013, staying debt-free became even more important as I became the head of our household. I still shop second hand, coupon and meal plan to keep expenses low.
This leaves money leftover to invest each month, and I’m focused on growing my money. I’m not hindered or worried by how ‘in the hole’ I am this month, or about rising interest rates that make my debt more expensive. I’ve never been more financially confident.”