My Biggest Financial Mistake
Growing up, I was a great saver. I would save almost all the money I made. I had a natural inclination to put money away and save it for things that were important to me.
After graduating from college, I was living alone in a $400 per month apartment in Terre Haute, Indiana.
I was easily saving 50% of my monthly income even though I started out making only $11.54 per hour working as a drive-through teller at Fifth Third Bank.
In 2005, I was pumped to be able to make my first Roth contributions as I cut a check for $8,000 (maxing out my 2004 and 2005 contributions).
At this time, I was also investing heavily in my employer-sponsored 401k plan.
I was very fortunate to graduate from college without any student loan debt.
Through a combination of athletic, academic, and my parents’ hard work, I entered the workforce with a clean slate.
I was doing what I thought was best, invest-invest-invest!
Fast forward eight years to 2012 and for being 30 years old, I had pretty good Roth IRA & 401k balances.
What I didn’t have was liquidity for what was going to transpire over the next few years.
In 2014, we felt God calling us to adopt. After due diligence and prayer, we felt called to adopt internationally.
Over the next six years, we adopted three amazing children from South Korea.
However, this also meant six flights to South Korea, approximately six weeks in hotels, and countless other adoption expenses.
In addition, we had two additional moves during this period to accommodate an ever-growing family.
Our most recent move was completed in March 2021 to our modern farmhouse with big trees.
☑ International adoption is very expensive.
☑ Moving twice and building homes can be very expensive.
This demolished our emergency fund, took a big chunk out of my Roth IRA, and at one point, I even had to take money out of my IRA.
Yes – I took money out of my IRA (paid a 10% penalty and claimed it as income).
What I Would Do Different
If given a mulligan, I would do a few things differently.
- Only contribute to a 401k enough to get 100% of the match.
- I still would have contributed to a Roth IRA.
- The biggest difference is that I would have invested heavily into a joint brokerage account with my wife monthly.
Life has too many variables to invest 100% of your contributions into retirement plans that you may not be able to access penalty-free for decades.
I try to turn my experience into a positive one for the young families that I guide, so they do not make the same mistake.
I allow my experience to help me positively guide the families we serve so they don’t make the same mistake.
Many of the best things in life can be surprises. You may not have years to plan for an amazing opportunity!
I don’t know what will happen next, but financially, I will be more prepared for it.
If you or someone you’re close to could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Cheers,
Nic
P.S. I must share a story from Jeff. When he got married, he sold his Apple stock to pay for flowers and a D.J. for his wedding. Those shares of Apple today would be worth approximately $9 million.
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