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5 Best Financial Decisions I Ever Made


5 Best Financial Decisions I Ever MadeHere is a tough question for you. What was the best financial decision you’ve made? Life is really good for us right now and a large part of that is due to many smart decisions we have made in the past. I also think we are very lucky because we haven’t made any huge mistakes or had any major accidents so far. Lucky is good and I’ll take it.

For me, there isn’t just one best financial decision that I can pinpoint. For example, I didn’t invest in Apple when they were cheap. If I invested all the money I had in Apple circa 2003, we’d have millions now. Instead of a big home run, I made a series of conservative base hits. This worked out for us, though life is different for everyone. What worked for us, might not work for you. I’m very curious about your best financial decisions and I hope to learn from them. I’ll start the conversation off by sharing my 5 best financial decisions and then I hope to hear yours.

My Best Financial Decisions

Major in Engineering

Unless this is the first time you visit Retire by 40, you’d know that I retired from my engineering career after just 16 years. I liked being a computer engineer when I started, but I got completely burned out and had to bail from Corporate America. That doesn’t sound like a successful career so why would I pick major in engineering as one of my best financial decisions?

Simple, I made a decent salary as an engineer and that enabled me to make other good financial decisions. At the end of my short career, I was making a little over six-figures and we were saving all of it. A decent paying job is a great base to build upon. If my kid wants to major in engineering, I would tell him to go for investment banking instead. They make a lot more money. Just kidding! I would encourage him to pursue engineering if he is good at it, but plan for early retirement. Engineering is fun, but you can’t stay in a technical role for long unless you’re really lucky. Anyway, you need to make a decent income or else it will be very difficult to get ahead financially.

Live Modestly

My number one rule of personal finance is – NEVER ever spend more than you make. It’s a downward spiral if you can’t follow this rule consistently.

Actually, I didn’t make a conscious decision to live modestly. It just turned out that way. My parents struggled financially for many years when I was young and I was used to living frugally. College was expensive and I knew my parents worked really hard to help pay for my education. I lived as cheaply as I could and rarely spent any money when I was a student.

That frugal habit stuck even after I started making good income. I never spent all my income like many other people did. A big factor here was that I made good income. Life was still very comfortable while saving 50% of our income. Living modestly came easy to me, but I know that’s not true for everyone. Over the last few years I have been tracking all our expenses and that helps us put a cap on spending. It’s very useful to know what you spend money on.

Start Investing Early

Another great decision I made was to start investing early. I didn’t want to invest in my 401k when I first started working, but my dad convinced me to do it. I continued to increase my 401k contribution and maxed it out after just a few years. I’ve been maxing out my 401k contribution ever since and it is the biggest part of our net worth now.

I know it is difficult for young people to max out their 401k contribution every year, but you should do it as soon as you can. Saving a significant percentage of your income has two huge effects.

  1. You live on less because you don’t have as much disposable income.
  2. Your investments have a lot of time to compound.

Every experienced investor wishes they invested more when they were young. Time is on your side when you’re young. A $1,000 every month can turn into $3 million in 40 years. So start investing as early as you can or else you will regret it.

Buy a House

In general, I don’t think buying a primary home is a good investment. However, it worked out well for us. We purchased a house in 2000 and turned it into a rental home in 2007. Eventually, we sold it and did a 1031 exchange into a tiny duplex. We made a $40,000 down payment in 2000 and now the property adds over $500,000 to our net worth. That’s not bad at all.

In retrospect, buying a home was good for us because it was a form of forced saving. We paid our mortgage instead of spending money on discretionary items. Once we turned it into a rental, it became a real investment and our tenants paid the mortgage for us. We’re lucky with the housing market too. We took a hit when the housing bubble popped, but we’ve recovered since. Now, our rentals are generating a little income every month and the price keeps appreciating. I can’t complain about that.

Married the Right Partner

Marrying the right partner is absolutely the luckiest thing I’ve ever did. I met Mrs. RB40 in college when we were both trying to find our way in life. She was as frugal as I was and we got along relatively well. After college, she joined the Peace Corps and went off to Uzbekistan for two years. I convinced her to move in with me when she came back and we got married soon after.

I was an engineer and earned a stable salary so she had a chance to try several different type of work. In 2005, she went back to school to get her Master’s degree and started a new career in HR. Now, she is working while I’m a stay at home dad/blogger. She likes her job and she is making very good progress with her career. However, she wants more time to pursue her other projects, so she plans to retire by 2020.

Mrs. RB40 is a great partner. She is reasonably frugal and we have similar financial goals. We prioritize building our net worth over spending money and our finance continues to improve every year. It is much easier to accomplish your financial goals when you work as a team. I can’t imagine a better partner because we works very well together.

What’s your best financial decision?

So those were my best financial decisions. Notice that they were all decisions that I made in my 20s. Those smart conservative decisions add up over time and we are reaping the dividend now. It feels like we will continue to do well if we just keep it up and avoid making any big mistake. All in all, I am very happy with where we are. We live a comfortable life and don’t have a lot of stress. Base hits aren’t as exciting as home runs, but they work well for us.

What about you? What are your best financial decisions? I want to hear about some home runs. 🙂

Bonus story!

Mrs. RB40 lived with her mom in CA after she got back from Peace Corps and she flew up to Portland to visit me. I wanted to impress her so I picked up a dozen long stemmed red roses on the way to the airport. In those days, you could still go through the security checkpoint to wait at the arrival gate, so that’s what I did. However, the metal detector beeped and the security lady had to wand me. So picture this – I’m standing with my hands outstretched, holding the roses while the security guard wanded me. Everyone in the airport was grinning from ear to ear. Mrs. RB40 appreciated the roses and the trial I had to go through. Ahh.. the good old days.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, the job became too stressful and Joe retired from his engineering career to become a stay-at-home dad/blogger at 38. Today, he blogs about financial independence, early retirement, investing, and living a frugal lifestyle.

Passive income is the key to early retirement. This year, Joe is increasing his investment in real estate with CrowdStreet. He can invest in projects across the U.S. and diversify his real estate portfolio. There are many interesting projects available so sign up and check them out.

Joe also highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help DIY investors analyze their portfolio and plan for retirement.

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{ 72 comments… add one }
  • Danielle December 2, 2016, 11:16 am

    The best financial decision I ever made was to live frugally. My family never had much money, so it was natural to become a very frugal spender in adulthood. Remaining frugal has allowed me to max out my 401K (where the tax laws allow me to), contribute to an IRA, buy rental property, and save 40% of my after tax income. I too am lucky that my partner is not interested in material purchases, and is happy with our modest lifestyle. It helps that I chose to become a CPA, got an MBA, and obtained my real estate license!

    • retirebyforty December 4, 2016, 6:29 am

      Wow, it sounds like you are doing extremely well. Really great to hear a success story. Being frugal is a great way to start your journey in life.

  • Fiscally Free August 24, 2016, 9:00 am

    I think you hit the nail on the head in the “Live Modestly” section, or as I would call it, the “Be a Cheapskate” section. Just kidding.
    If you are satisfied with a modest lifestyle, you will have lots more money with which to make other good financial decisions.
    If you always have to have the latest and greatest stuff, you will be caught in a downward spiral forever.

  • tg August 23, 2016, 1:24 pm

    Hey Joe,

    Just wondering why you think you would have to be really lucky to stay in a technical role for long term? I’m not an engineer but have a technical role and plan on working for 15-20 years.

    • retirebyforty August 23, 2016, 10:52 pm

      From my experience, companies demand a lot from their tech workers. This is fine when you’re young, but really tough when you have a family. Also, they want you to contribute more every year. If you’re getting raises and promotions, you need to work more effectively. This means you’ll hit a ceiling at some point. Then you need to go into management or other leadership type position.
      Companies prefer younger tech workers because they are cheaper and are willing to work harder.
      Good luck!

  • SC August 23, 2016, 9:55 am

    Saving: Save Early, Consistently, and put savings on autopilot. Maximize 401K, retirement-plans, IRA, and ESPP. Do allow for Charity contributions (you can start low early career, and increase as your pay/income increases)!
    Life in Cruising-mode: Buy right Home in great and growing school district, keep nibbling at the principal (building equity as an added savings); If required do ZERO-cost Refi to get better rate & lower payments
    Sustain: Plan/Live/Enjoy with remainder of the take-home money. Whats life if there is not some fun ! :-). If you got extra monies – buy some individual stocks of great companies (5-10 Co, for some level of diversification)
    Watch: check your portfolio that you CAN NOT TOUCH! watch it grow – (and thru some gyrations during downturns, but never quit savings contributions 🙂
    Start a company/web-site/additional-streams (rental properties?), books, patents – etc to add additional passive income streams
    Contribute: Buy them one of those nice cars, or nicer homes – sure helps Economy !

    Do enjoy work, kids/life, and what we’ve been blessed with! Do help kids succeed, after all they are your blood, and your next-gen!

    Future: Survive with savings-kitty (ever growing/compounding), partial Social-security (unlikely to expect 100% level as it currently stands ..), and possibly some passive stream(s)

  • Dividends Down Under August 23, 2016, 3:56 am

    Nice stories Joe, I can see why every choice you’ve made has really helped your finances get to where they are today.

    I hope that I can look back at the further education I’m doing now and say that it was worth it. I’d definitely say my wife is the best financial choice I’ll ever make, she completely agrees with the FIRE financial lifestyle and she REALLY makes our money work hard, she gets the best value out of every single purchase we make.


    • retirebyforty August 23, 2016, 10:48 pm

      I think education is one of the best investments you can make. Good job to both of you.

  • [email protected] Turtle August 22, 2016, 9:31 pm

    My best financial decision so far has been to get out of a bad relationship. My ex knew how to spend money. My money. And I let him even though we weren’t married. He put me in a lot of debt that I had to claw my way out of after I left. Leaving him turned my life around. It allowed me to pick myself up and get on better financial footing.
    Now I’m in a relationship that is incredibly financially stable. Neither one of us is in debt and we are putting away a lot of money every month for retirement.

    • retirebyforty August 23, 2016, 10:48 pm

      Good for you! It’s great that you regrouped and moving on to a better future.

  • Laura @ Savvy Family Finance August 22, 2016, 8:49 pm

    Love peeking into others decisions 🙂 I also married a partner with similar money habits, in tech and we both maxed out 401k contribs. That’s a HUGE thing, though didn’t realize it at the time that most of our coworkers weren’t contributing – or worse, went all cash when the market tanked (2x for us)

  • Christy August 22, 2016, 6:51 pm

    Our top 5 would be:
    1. Tithe 10% to local church(We haven’t always done this, but learned the hard way….now we don’t want to build wealth without honoring God)
    2. Invest early/max out 401k/avoid debt
    3. Fix up old homes As a side gig/ rent or sell for profit.
    4. Pursue a career you love
    5. Find out what makes you happy and only spend $ on that…ie travel, we are not interested in golf or boats or the mall etc.

  • James August 22, 2016, 5:22 pm

    Best decision;
    Buying amazon stock in early 1998

    Worst decision;
    Selling amazon stock in late 1999 for more than 10x profit and using it to buy a house since i had other source to pay for a decent downpayment.

    The house has gone up at lest twice what I paid for, but the amazon money if I held it til now…sigh……I would’ve made more $$ than my salary from 2000 til now..

    • retirebyforty August 23, 2016, 10:47 pm

      Hindsight is 20/20. 🙂

  • SF Bo August 22, 2016, 4:14 pm

    1. Buying AAPL at the right time – worth over 9x purchase price

    2. Living modestly

    3. Deciding to save and invest

    4. Buying house at the bottom of the market (or close to it) in 2011 – 66% price appreciation

    • retirebyforty August 23, 2016, 10:46 pm

      Great job with #4. That’s a huge gain on investment.

      • SF Bo August 29, 2016, 9:14 am

        Funny thing is I wasn’t trying to time the bottom. I was a renter and my landlord raised our rent again. I was pissed so I decided that I would buy a house instead. Picked up a foreclosure property.

  • Maria Martoral August 22, 2016, 3:29 pm

    Best financial decision for both my hubby and I was entering professions which provided us each a solid pension while saving $1,000 a month in our Roth IRA on very modest salaries. Owning our own home has also been a wise financial decision !

  • Adam and Jane August 22, 2016, 12:35 pm

    Hi Joe,

    Very interesting post about you and many of the fellow readers. You also made MANY MANY wise decisions that allowed you to quit a job you hated so much and to saved 40x expenses!!!!!

    In no particular order:
    1. Both majored in Computer Science
    2. Purchased an affordable home 3x annual combined salary.
    3. Saved at least 50% of income from the beginning after we brought the house.
    4. Maxed out 401Ks
    5. Paid off 180K mortgage in 11 years.
    6. Both Are frugal and on the same page.
    7. Purchased munis to generate passive tax free income starting in 2009.
    8. Saved 85% of income for the last 5-6 years
    9. Own cars for 18 years plus.
    10. Jane stayed in the company instead of quitting to get a pension and money for medical yearly starting in 1/2017 if she chooses.
    11. TINK – Triple Income No Kids. Interest paid from munis is our third income.

    Jane said the best was to pay off the mortgage in 11 years by 2002 so that we could increase savings.

    I think the best decision was to dump our life savings to purchase munis in 2009 to reach FI by age 48/49 in 2014. This allowed us to not get stressed out as our company is giving our american jobs to workers in India!


    • retirebyforty August 22, 2016, 2:43 pm

      That’s a lot of great decisions! No Kids would be right up there. Kids are expensive. Great job paying off your mortgage in 11 years. Having no debt at all makes life so much easier.

  • The Money Commando August 22, 2016, 12:30 pm

    I think marrying the right person is probably the single most important decision anybody can make. Not only is divorce is expensive, but there’s no way you can succeed in a career or save money if you’re not happy at home and on the same page as your spouse.

    After that, my best financial decision was to bet on myself and move from engineering into sales. If you’re successful in sales you make a lot more money. If you’re not successful you make nothing AND get fired! But it’s worked out for me and resulted in much higher income and the ability to save and invest.

    • retirebyforty August 22, 2016, 2:41 pm

      Divorce is a terrible set back in every way. We’re really lucky that our relationship is doing well.
      Good job moving into sales. That’s awesome.

  • Cynthia August 22, 2016, 11:26 am

    Hi Joe,
    I’m here to encourage the people who didn’t start early, married to a shopper & gleaned nothing from their payment happy patents ( who declared bankruptcy at one point).
    I retired at 62 & very happy to say I didn’t lose sight of saving, investing myself. The only thing I was able to engage my spouse on was maxing out the 401k! I started early but I was already working for a large company who had a pention. I took a buy out after 17 years I started when I was 24. The smartest thing I did was fill out my pention paperwork as soon as elegible. I then joined the 401k plan but was only in it for a year before I left. I then went to work for a small company & learned a new trade which allowed me to open my own business from home for the next 24 years. I began my own Corp retirement plan & put the max I could in ever year.
    No, I never went to college either, so no loans!
    My husband in the last 20 years made a good income. We lived on his. Since he was a shopper as I earlier mentioned I could use my income for paying cash for any house project, paying off all debt & plowing money into an emergency fund, and retirement accounts.
    I attended a college course ( alone) on retirement & learned as much as I could.
    It can STILL work! We retired & we are very happy & have a solid retirement plan. With the help of a retirement planner where we park about 1/3 of our money with a 1% fee and I manage the other $. We got VERY serious in our mid 50’s. I still get a pention and our monthly income covers all our monthly bills (plus some travel $$) without releying on selling any of our stocks.
    We take dividends from our broker account only.
    On a side note we paidoff our house too. We didn’t upgrade to the big house when we could have but instead made our 2k sq ft house one we love. We have two nice new cars, both paid in cash to enter our retirement.
    So please don’t be discouraged if your 30/40 without savings & stocks! Just figure out how to accomplish it. Don’t make the excuse my partner isn’t on board.
    Just do it as Nike Says! LOVE retirement!!

    • retirebyforty August 22, 2016, 2:39 pm

      Thank you for sharing your story! It is great to know that you start off a bit later and still have a good retirement. You did a very good job planning for retirement, though. It’s tough to save when your partner likes to spend money.
      I think it will be more difficult in the future, though. Pensions are getting more rare every year.

  • Tim George August 22, 2016, 11:09 am

    I earned a good living as a Technician for 24yrs until disability retirement. My big mother told to save .25 of every dollar. I did not listen to my regret. My wife earned a good living as a dietician. Yet we both failed to save enough and be prepared for college. Then I remembered if you seek first the kingdom of and His righteousness, all these things are added. So that is the most important thing because we can never save enough money, because we do not know how much we will need, but God does.

  • freebird August 22, 2016, 10:58 am

    No home runs here, none that I know of anyway, but I think a few decisions helped financially. I didn’t choose to major in engineering, it was thrust upon me by a parent who thought it was a better fit than the pre-med track I was on. In retrospect I think that was correct. Second, I always chose which school to attend by following the scholarship money. Whoever paid the most got my acceptance. So I didn’t study in one place very long, but I netted out a fairly impressive sum by the time I finished my doctorate. Chronic underspending probably helped the most over the long haul but that’s never really been a decision, for me it’s just my nature. And finally my dad was an avid stock trader so I was partial to stocks from an early age– despite having a strongly risk-averse nature. My preference was to lose money in the stock market over buying things I didn’t need, and the lessons learned from the former I think were much more valuable than what I could glean from an overstuffed garage.

    • retirebyforty August 22, 2016, 2:36 pm

      It’s great that you got a good start without owing a lot of money. I feel terrible about kids and student loans these days. Hopefully, we’ll be able to help our kid decide on a good school and major.

  • Silicon Valley Dollar August 22, 2016, 10:33 am

    We have not achieved what you have, Joe. (But hopefully one day!) That being said, so far one of the better decisions I made was keeping student debt at a manageable amount by going to public universities and getting scholarships. I still had student loans (mostly due to grad school), but was able to pay most of it off fairly quickly.

  • Tawcan August 22, 2016, 10:01 am

    Love this, you totally give me an idea for my next blog post. 🙂

    • retirebyforty August 22, 2016, 11:05 am

      You’re welcome! Sometime blogging is a lot of fun. 🙂

  • Rock the Casbah August 22, 2016, 8:26 am

    Hey Joe,

    Been checking out your website for a while now but this is my first comment. This question resonated quite a bit with me as I am planning to soon take the plunge into semi-retirement (or semi FI as some prefer) at age 47. There were a few factors that played into my ability to do that but one of them was among the best financial decisions I’ve ever made. To made a long story short: I had a substantial amount of capital at the beginning of 2009 (partly from an inheritance I was fortunate enough to receive and partly from my savings). Stock pricings were severely depressed from the 08-09 financial crisis and I invested almost all my available capital at that time into equities. I kept some cash for emergencies but otherwise, I aggressively applied Buffet’s adage “Be fearful when others are greedy and greedy when others are fearful” and backed up the truck hard. Stocks were on a firesale at that time and I tried to take full advantage.

    I invested in only a handful of stocks at that time but my intent was NOT a long term investment in most of them but rather to take advantage of the weakened market in 09, invest in some stocks w/ good short term growth potential and sell them within a relatively short term timeframe to make substantial capital gains. These gains were then used to fuel the purchase of dividend growth stocks (my true long term strategy). Essentially, I made some concentrated stock picks to “turbo charge” my available capital to purchase a diversified portfolio of dividend paying stocks. And it fortunately worked out very well.
    Now I have a portfolio of dividend paying stocks that generate enough dividend income to cover a large portion of my expenses. My plan now is to get a lower stress, reduced hour position with my current employer to cover the remainder and give me some margin of error as well. I am fortunate that my employer does offer the same health insurance benefits to reduced hour employees (albeit at a higher premium but still very reasonable).

    So, in hindsight, this was one of the best financial decisions I’ve ever made.

    BTW, enjoy the website and appreciate your sincere observations and amiable manner. Keep up the good work. Wish you and your family well.

    • retirebyforty August 22, 2016, 11:05 am

      Great job investing when the market was down! That’s a great way to invest. We didn’t have a lot of capital when the market was down last time. We kept saving and investing, though. Good luck with reducing your hours. I think that’s a tough sell. Thank you for following Retire by 40!

  • ESI Money August 22, 2016, 7:00 am

    Mine are very similar to yours.

    I’d add “invested in real estate when the market was low.” Those places have appreciated 40% now and are providing most of the income that allowed me to retire early.

    • retirebyforty August 22, 2016, 11:02 am

      We invested in real estate when the market was low too. It was hard to get financing, but we did it. Now, we just need to convert that into cash. We’ll be paying a ton of taxes when we sell.

  • RocDoc August 22, 2016, 6:32 am

    I loved the story about bringing the roses for Mrs RB40 at the airport. So sweet!
    My best financial decision was my husband and I living like a resident for 7 years after my graduation. We got teased a bit about our old cars and living in an apartment. But it gave me lots of time to see that a doctor’s life can be pretty onerous if you allow it to become that way. By continuing to live modestly we’ve been able to save money, become financially independent and both work jobs we love, but on our terms because we know we have the option to “walk away.”

    • retirebyforty August 22, 2016, 11:01 am

      That was the first time I got flowers for her. Previously, I was too poor and cheap to spend on flowers. 🙂
      Great job keeping your living expense down. Being a physician is very rewarding, but I heard it gets harder. My brother is working a lot and he seems stressed out…

  • Pia @ Mama Hustle August 22, 2016, 6:27 am

    Eeee. All of that underlines how important the decisions I’m making right now are. It’s stressful to realize the financial situations we make now are likely the most influential decisions we’ll make regarding our financial future. I’m halfway through my 20s and just now getting on the right track!

    • retirebyforty August 22, 2016, 10:59 am

      You’re way ahead of the curve. 🙂 Keep at it and you’ll be in a great financial position later.

  • Mike Drak August 22, 2016, 6:23 am

    I was lucky as my parents were good teachers with respect to money. My father came over to this country with nothing and did well through hard work. I remember our first house where we had rented out the basement and 2nd floor and there was only one washroom. Things like that you never forget. I remember one Christmas where I only received a bathrobe, but they made up for it another year when Santa gave me my first fishing rod. We never did have much but we always seemed to have enough. When I got my first job which lasted for 36 years I would top up my RRSP and max out money in the kids RESP’s. The mortgage was lumped down on a priority basis and this was all done before we could splurge a little on what was left over. I was lucky that my parents taught me well about how to save money.
    I think a good topic would be about our biggest money mistakes. Now that would be interesting and I have to admit to having made a few!

    • retirebyforty August 22, 2016, 10:58 am

      Thanks for sharing! 5 of us shared one room at my aunt’s house when we first moved to the US. Being poor isn’t any fun.
      I will put biggest money mistakes on my topic list. For me, it’s probably retiring early, but life is so much better now. 🙂

  • Jon @ Be Net Worthy August 22, 2016, 5:08 am

    Those were all great decisions Joe! For me, it was also majoring in engineering, which put me into a well-paying career and then getting an MBA from a great public university on a full scholarship which really boosted my earnings. I also have a great wife who is not a big spender and we are a great pair!

    • retirebyforty August 22, 2016, 10:56 am

      Great job with the MBA. The short term sacrifice will pay off for years to come.

  • Apathy Ends August 22, 2016, 4:56 am

    Like you we don’t have a single “Big Bang” event that clearly stands out. I think saving at least 50% of all of our raises for the last few years has done the most work for our net worth.

    We also made pretty good money on our first home in just 2 years, but that was more luck than anything.

    • retirebyforty August 22, 2016, 10:55 am

      Great job saving your raises! That’s how I feel about luck too. We’ve been really lucky and I hope it continues.

  • Mrs. PIE August 22, 2016, 4:48 am

    All great points and not a million miles from what I would say were our best decisions too.
    We found pretty well paid careers, maxed out 401K’s early, bought a house that appreciated in value over the last 17 years and never had credit card debt.
    Again, all choices we made pretty early in out ‘grown-up’ life that have far reaching consequences

    • retirebyforty August 22, 2016, 10:54 am

      Not running up debt is huge. It’s amazing how many people live way beyond their means. Everyone knows it won’t work out, but they still do it.

  • Jim @ Route To Retire August 22, 2016, 4:45 am

    My best financial decisions are actually pretty similar to yours. For me though, I would probably add sticking with our first rental property and then getting back on the horse a few years later.

    We made some mistakes on our first rental property that made it a little frustrating for a number of years. We’re good on it now, but it made me almost stop with real estate at that point. However, we got back on the wagon and bought the duplex after having learned from our mistakes and that’s been a very successful investment thus far.

    We’re going to repeat the process a couple more times to build up the passive income even more, but this has really been a game-changer for us.

    — Jim

    • retirebyforty August 22, 2016, 2:46 pm

      Nice job sticking with your investment. Many people bail out on their investments too quickly.
      Good luck with your next property. Rentals are a great investment. We may jump into another property when there is another crash, but we’re good for now.

  • The Green Swan August 22, 2016, 4:21 am

    Fun bonus story, Joe, what a memory!

    I think my smartest financial decision was actually not financial related and that was getting married young. It allowed us to attack our financial strategy together early, and it saved us a lot throughout the years by living together, etc. Bonus: getting married young meant we didn’t have as much to splurge on our wedding day. Our wedding was great but modest. Getting married young impacted so many decisions we made and I couldn’t imagine where I’d be today without her.

    • retirebyforty August 22, 2016, 10:51 am

      When did you get married? We got married when we were 25. I think that was the perfect timing for us. If we got married earlier, it wouldn’t have worked out so well. It was good that Mrs. RB40 went off to Peace Corps for 2 years so we could figure out what we wanted to do separately.

  • Brad, helping Maximize Your Money August 22, 2016, 3:42 am

    My best decision was starting a business just a couple years after college, which I sold 18 years later for a nice exit.

    I love the points you wrote about and think they are often key to success! While running my own company we enjoyed the benefits of those same principles you mentioned. They helped a lot.

    • retirebyforty August 22, 2016, 10:49 am

      That’s great! Starting a business is a lot of work, but the payoff can be immense. Great job.

  • [email protected] Smarter Decisions August 22, 2016, 3:20 am

    Great post Joe and I think your comment about making these decisions when you were young (smart conservative decisions add up over time) – is what got me to FI early as well! Although I chose teaching as a career and wasn’t a high income earner – I invested young and often, I bought a foreclosure that I turned into a rental in my early 20’s, and I always lived below my means and side gigged for extra money. We also bought more rental properties and chose a modest home that we’ve lived in for over 10 years. We are planning to move in to that foreclosure I bought in my 20’s next year – after it being rented to the same person for over 20 years (no vacancies ever…)

    • retirebyforty August 22, 2016, 10:48 am

      Oh wow, you had a great long term tenant. That’s fantastic. These housing opportunities only comes once every 10 years or so. Investors need to be ready to take advantage of it.

  • Martin - Get FIRE'd asap August 22, 2016, 3:05 am

    All of them great advice RB40 and should be part of everyone’s financial education.

    My best financial decision was buying my first investment property. I subsequently bought, renovated and sold several others for good profits which then were reinvested into further property. I still own three which are rented out and will form a significant part of my retirement income. The great thing is knowing that I can get a significant return from them as their value continues to appreciate. A great financial move.

    • retirebyforty August 22, 2016, 10:47 am

      I love it! Real estate investing isn’t for everyone, but it’s working out very well for you. Congratulations!

  • Ernie Zelinski August 22, 2016, 1:29 am

    You ask, “What’s your best financial decision?”

    As I told a “Globe and Mail” reporter over 4 years ago, it was investing money in self-publishing my books. My philosophy is that the best investment anyone can make is creating intellectual property that provides residual income for many years. In my case, the intellectual property is my books.

    You can see the Globe and Mail article here:


    This is an update, however.

    My books have now sold a total of over 925,000 copies worldwide and have generated approximately $2.3-million in pre-tax income for me over the years.

    Just one more important point. My favorite marketing guru Seth Godin just yesterday mentioned 4 essential steps of marketing, which are all important for being successful as a writer and self-publisher:

    “The first step is to invent a thing worth making, a story worth telling, a contribution worth talking about.

    “The second step is to design and build it in a way that people will actually benefit from and care about.

    “The third one is the one everyone gets all excited about. This is the step where you tell the story to the right people in the right way.

    “The last step is so often overlooked: The part where you show up, regularly, consistently and generously, for years and years, to organize and lead and build confidence in the change you seek to make.”

    Pay particular attention to the first step and the last step.

    • Mike Drak August 22, 2016, 6:09 am

      I love stories about people who find the strength to say BS to their corporate jobs and start living life their way before they get too damaged. What I found interesting is how you had the courage to do it before you had achieved FI. Whenever I read about people who ditch their high paying corporate job to create a fun less stress lifestyle I call it “Doing an Ernie!”

    • retirebyforty August 22, 2016, 10:46 am

      I love IP with residual income. That’s the best way to live.

  • Kate @ Cashville Skyline August 22, 2016, 1:13 am

    Purchasing a home in East Nashville in 2009 before the neighborhood became super trendy was one of the best decisions I have made. I was able to buy for $167K, and the home has already doubled in value. I refinanced to a 15-year loan a couple of years later. Now, my mortgage is much cheaper than renting and I’ve gained a significant amount of equity. Also: going to college at a state school.

    • retirebyforty August 22, 2016, 10:44 am

      Great job buying when the value was down! That’s an awesome win.

  • Sam @ Financial Samurai August 22, 2016, 1:07 am

    Good moves you made!

    Mine was getting on a bus from college to a career fair at 6am. Nobody else got on! I ended up getting a good job out of it that allowed me to build passive income and retire early.


    • retirebyforty August 22, 2016, 10:44 am

      That’s really great! You’re one smart cookie. I hope some young college kids see this comment.

    • Adam and Jane August 22, 2016, 11:45 am


      You are my IDOL! You have the BEST passive income stream I have seen. Plus, you also have a great online site. Great Job for your passive and active income. You made plenty of wise decisions to attain FI and beyond!!!!!


  • Mr. Tako @ Mr. Tako Escapes August 22, 2016, 1:04 am

    Hi Joe. No lottery wins here. Like you, I’ve never had any gigantic financial wins, but marrying my wife was probably the smartest move I ever made. She really is the best.

    It wasn’t always a straight line to wealth for us — there have been plenty of ups and downs over the years. But small wins over and over again eventually begin to compound.

    Now, we’ve got plenty of money, and thanks to financial independence, very little stress in our lives. It’s a pretty darn good life.

    • retirebyforty August 22, 2016, 10:43 am

      We have had our ups and downs too, but a lot more ups than down. We’ve been very lucky so far. Having the right partner makes everything so much easier.

  • Mr. All Things Money August 22, 2016, 12:48 am

    Forgot to mention, I am also very lucky to have a frugal life partner. She doesn’t like jewelry or expensive handbags or fancy dresses. What more can a man ask for? 🙂

    • Mr. Tako @ Mr. Tako Escapes August 22, 2016, 1:04 am

      Not much!

    • retirebyforty August 22, 2016, 10:42 am

      Mrs. RB40 used to like expensive handbags, but she doesn’t care about them anymore. Whew! I’m really glad she doesn’t like jewelry. 🙂

  • Mr. All Things Money August 22, 2016, 12:35 am

    For me, majoring in engineering was pretty much a given as I wasn’t interested in anything else at the time. Financially, it worked out pretty well. As for the best financial decision, I would say I have a few: Bought our two cars with cash, payed-off my house early, and started a dividend growth portfolio. Not having a mortgage and car payments played a big part in making early retirement a possibility for me. Living frugally is a life style we have always followed and it has served us well.

    • retirebyforty August 22, 2016, 10:27 am

      I don’t regret majoring in engineering. It was interesting and challenging for a while. It also gave me a good start in life. I could have done a lot worse. It took us a while to figure out buying with cash, but now we’re on board. Having no car payment is great. It will take us a while to get rid of our mortgage, though.

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