10 Money Revelations at 40

I wrote a post almost 10 years ago about money disclosures in your 30s.

Here’s an updated version now that I’m approaching my mid-40s (damn you Father Time):

1. The creepy lifestyle isn’t always bad. Yes, you need to live below your means, delay gratification and avoid overspending.

But I’m not a fan of living like a pauper when you’re younger just so you can have more money when you’re older.

If you earn more money over time, you should save more, but also spend more.

There’s nothing wrong with enjoying the fruits of your labor assuming you keep your savings rate relatively constant over time.

2. Debt is a tool. Personal finance experts hate debt. I do not share this opinion. I’m not of the opinion that every big purchase in your life should be made with cash.

Debt itself is not bad. Debt is like a hammer. It can be used to both build and destroy.

Smart use of debt has brought much more flexibility to my financial life.

3. Investment performance is important, but slightly overrated. I spent my 20s and 30s building up my tax-deferred retirement accounts and emergency fund.

Then I moved on to building my taxable accounts. I looked at my brokerage balance history this week and noticed that there has been a big jump in the balance over the last five years or so.

The bull market in stocks and crypto certainly helped, but the biggest reason for the growth is that I put more money into this account.

Compounding does most of the heavy lifting over longer periods of time, but how much you save has a much bigger impact over shorter periods of time.

Returns matter, but it doesn’t matter how good you are at investing if you don’t save in the first place.

4. Material possessions can also be fun. I’m a fan of shopping experiences. I know the psychology behind spending on material goods. You buy stuff, the dopamine goes wild and then it’s gone.

I understand that.

And yet…

I find myself enjoying material possessions more and more as I get older. I like to buy clothes. I like to buy shoes. I love buying things for our house.

It brings me joy! There I said it.

This joy might be fleeting, but there are some material possessions that can provide lasting benefits.

Am I a bad personal finance person because I like things? not.

5. Kids are expensive, but it gets better. I’ve always been a big planner when it comes to my finances. I’m rarely surprised by how much something costs.

The biggest financial shock of my life was the cost of daycare.

The hardest part is that you don’t have time to prepare for it. I know that children will be expensive in the future. It’s sports, camps, clothes, college, weddings, etc., but I can make plans for those things.

You’re 18 years old to plan for college, but you don’t have time to plan for kindergarten. We struggled to save when we had twins on the way and knew three kids would be in preschool for a few years, but there just wasn’t enough time.

Now that the kids are in public school and that part is over, things are much easier from a planning perspective.

Deciding at daycare between spending an insane amount of money or the lost income from a non-working parent is a very expensive decision with no easy answer.¹

6. Money can’t buy everything, but it can buy comfort. Money won’t fill every void you have in life, but it can give you comfort, peace of mind, and a little less stress in your day-to-day life.

Knowing that we can meet all our obligations is more important to me than reaching a certain net worth.

7. I’m in no rush to pay off my mortgage. We made extra payments on our first home for several years after refinancing a few times.² I wish those extra payments had gone into the stock market instead.

That money has done nothing for me sitting in our house.

Sure, it helps that we now have a 3% mortgage rate, but I have more peace of mind having more cash and stocks than in our house.

This is personal preference, but personal finance is personal.

8. The goalposts should be moving. My goals for income, net worth, investments and portfolio have changed over time.

I moved the poles several times as I got older. And that’s okay!

I like having something to strive for, even if it seems like the carrot on the stick isn’t always within reach.

You will never have enough. You will never be completely satisfied.

You still need to find some levels of contentment, but it’s healthy to move the goalposts as goals change.

9. Questions build as you get older. I work with a lot of great financial advisors. I find myself leaning on them more and more as I get older and my financial situation becomes more complex.

Financial advice becomes more important the older you get and the more money you have.

10. The Joneses are always there. It’s impossible to avoid comparison these days when friends, colleagues, colleagues and social networks only publicly watch the good aspects of their lives online.

It’s never been harder to keep up with the Joneses because the Joneses are everywhere.

I fall prey to the thief of joy just like everyone else, but I’ve found that gratitude keeps you grounded.

Things could always be better, but they could also be considerably worse.

Further reading:
10 Money Revelations at 30

¹Parents who have a family helping out at preschool are very lucky, but this is also a difficult situation because it’s a big ask.

²When we bought our first home in 2007, mortgage rates were well over 6%.