2 Money Mistakes That Cost Me THOUSANDS! [Retirement & Lifestyle Creep]

This video is the follow up to my previous video, 6 Financial Accomplishments of 2019:

https://youtu.be/WH9ZNaJaEDI

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My first financial/money mistake was not always investing money in my 401k plan to get the 401k match from my company. My match at my previous job was 100% of up to 5% of your paycheck that you put in! However, I had discovered Dave Ramsey a few months before and he instructed me to suspend all investing while in baby step 2 of the Total Money Makeover. I did this for about 6 months and missed out on about $1,800 of retirement match -- basically free money! A 401k match has basically a 100% return on investment, immediately, unlike paying off credit card debt, which has an ROI equivalent to your credit card interest rate APY/APR.

I understand why Dave Ramsey pushes this: He wants you to "miss out" on your retirement savings so you are more motivated to pay off debt faster. Its a little mind trick and it works, but I don't think its worth the sacrifice since my debt is relatively small.

My second financial mistake was lifestyle inflation. I moved to a new city and got a cost of living adjustment. However, I could have been more thoughtful with how I spent my extra money. For example, my apartment didn't need to be as luxurious as it was, and I could have put more income towards my debt or ROTH IRA instead of eating out more.

Its really important to recognize when you have a potential for lifestyle inflation event coming in your life and address it appropriately. Some people are totally fine with lifestyle inflation but for those wanting to retire early and/or achieve financial independence, lifestyle inflation is definitely something you want to limit!

-Disclaimer: There may be affiliate links in the description above, which means I may receive a small commission which really helps the channel!

-Disclaimer: I am not a financial, investing, tax or legal advisor. The information presented is for entertainment and should not be taken as financial, investment, tax or legal advice. I invest based on my own research and principles. I am not responsible for any financial losses that may result from following my actions. Do your research and develop your own investing philosophy!

Lifestyle inflation (or lifestyle creep) is also known as hedonic adaptation or the hedonic treadmill.... the opposite of essentialism
#money #investing #retirement

Видео 2 Money Mistakes That Cost Me THOUSANDS! [Retirement & Lifestyle Creep] канала Ian Seabrook