If I had a time machine and could go back to my 20s, I wouldn't invest in the technology stocks that were hot. I'd simply save my money. Assuming I didn't take back with me any "future knowledge," I'd just want to put more old-fashioned cash in a savings account or emergency fund.
I was in my 20s in the 1990's or the time leading up to the infamous dot.com bubble. If I had saved cash in my 20s, I could have bought a home when the housing market hit bottom. I could have paid cash. I would have the cash now to pay for a new car and cash to pay for my sons' college tuition.
Buying into the bull market
I've had the unfortunate luck of not only buying into a bull market, but buying a home during the housing bubble. Many of my Gen-X peers had equally bad timing. Although lenders would not give me a mortgage loan in my 20s, I was free to invest in the stock market. I remember purchasing shares of some technology companies for $100 a share. Last time I checked, some of those specific companies now sell for $2 a share, even though it's 15 years later. So much for the philosophy of dollar-cost averaging that promises I'll win out over time. I couldn't qualify to buy a single-family home until 2005 when the values were already inflated.
Selling at the worst time
Because I didn't save cash, I had to sell stocks when it was time for my sons to attend college. That meant locking in the losses. Fortunately, we have not had to sell our home, which was recently appraised at $50,000 below the price we paid. If I had simply saved cash in my 20s instead of investing in stocks, I'd be further ahead. However, all the so-called financial experts in the 1990s and beyond promised annual returns. No one ever mentioned the possibility of long-term losses with regard to stocks. As for housing, well, all I ever heard was that homes appreciated. Reality is, we dealt with negative equity for years.
Saving too much for retirement
Although experts always say a person can never be too young to save for retirement, I beg to differ. I couldn't really afford to invest in a Roth IRA when I was in my 20s. I regret the money I put in my 401(k) because I can't access the money without paying a 10 percent penalty and taxes. Also, I would have been further ahead financially if I could have used cash to buy a home. Even my professionally-managed 401(k) account did not make much money in 10 years.
When I look back on my financial life in my 20s, I see it as my wasted youth. Although I made a lot of complicated financial moves such as investing, I regret not making the most simple and uncomplicated move of all. After getting out of debt, I should have saved a boat load of cash. If I had, I'd be sailing into the sunset at age 40.
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