When I was forty, I was pretty much broke. I had a house, mortgage, four-year-old, and a wife who kept the family afloat (sort of) with a semi-steady job in animation. At the time, I was not holding up my end of the family finances. I had eight jobs in a span of three-and-a-half years, the longest of which was a staff position teaching English in a private school for $350 per week.
I promised myself that if I ever secured employment that paid a living wage (i.e., more than $350/week), I would get serious about saving.
A month shy of my 41st birthday, I got a job that paid enough so my spouse and I could save a little money ... and boy did we save. Year in and year out, we tucked money away in stocks, in savings bonds, in bank accounts. We took unlavish vacations and drove old cars. We sent our kids to public schools and public universities. And when we retired two years ago, we had enough salted away to (finally!) afford retirement.
So what's the secret? The roadmap to success? The numbered guide below (from a millenial called Badger1754 at bogleheads.org) is more useful than many:
Some Rules For Creating Wealth:
1) Live within your means.
2) Pay yourself first.
3) Put aside money for emergencies (actual emergencies).
4) Ignore the “noise” (CNBC, “financial advisors” trying to sell you stuff). This might be actually a healthier way to live life. I get my news from the NYTimes and the WSJ. My wife gets her news from Facebook and cable TV. I am infinitely calmer during elections. :D
5) Keep things in perspective.
6) Don’t let sentiment, emotion, or a “gut feeling” cloud your judgment when there are facts that can be relied upon. In particular, I’ve found that having a basic facility with finance and math (e.g. able to build an Excel model) helps streamline the decision-making process which as in turn helped me avoid several potentially bad decisions.
7) Invest in the future (monetarily, educationally, philanthropically).
8) Remember: Sic transit gloria mundi — nothing good lasts forever, so don’t expect it to.
9) There is still a greater concentration of talent, hunger, entrepreneurialism, chutzpah, grit, accessibility, and freedom in the US economy than anywhere else in the world that attracts the aforementioned attributes like moths to a flame. So, while nothing good lasts forever, Rome took over a thousand years to fall.)
10) Stay active (physically, intellectually, economically) — idle hands do the devil’s work; idle money does no work. Take ownership and responsibility for your own success.
11) No one aside from your parents will give you anything. In fact, there is a large population of people who would freely and shamelessly take advantage of you. But it is up to you (and only you) to find and pursue those opportunities that will lead to success.
12) A piece of advice I wish all millennials would reflect upon: remember that you can’t save the world if you become a casualty in the process.
13) Don’t reinvent the wheel — stand on the shoulders of giants!
I ladled out a lot of advice in my old job in the cartoon business. The advice encompassed employment, what kinds of investments to put money in, how the cartoon business works. Here's the gist of it (most of which dovetails with badger1754's advice directly above.
Surviving (And Prospering) In The Animation Industry
1) The cartoon job market goes up and down -- Twenty-plus years ago, salaries and job opportunities in animation went through the roof. But within half a decade the supply of talent overtook the supply of jobs, and salaries went down ... and more people were out of work. (Sic transit gloria mundi -- badger's #8).
2) Invest in yourself -- hone your skills, improve your skills. Constantly train, learn, improve; it's the only way to stay relevant in a changing business. Remember there are always hungry 22-year-olds coming up behind you (badger's #7).
3) Even if you don't think you can afford it, put something in your 401(k) ... and IRA ... and Roth IRA. (If you're under an IA/TAG contract, you'll also be having your employer put money on your behalf into a pension fund. -- badger's #2)
4) The animation business has always underpaid workers. Artists were taking free tests in 1933 ... 1967 ... 2016. Artists were working free overtime during the same time periods. My artist father made $15/week at Disney in 1939. Animator Don Lusk made more clerking in a liquor store near Big Bear Lake in 1941 than he did as a Disney artist in Burbank during the same year. (Union sign painters in the building trades averaged $1.47/hr during this time.)
In the present era, Disney exec Ed Catmull -- soon to retire as a wealthy man -- suppressed animation and tech wages; non-union studios pay below union minimums with scanty benefits; union studios distributing work on the internet are allowed to undercut contract minimums. It's useful for artists to know the industry's past as they push to make the industry's future better (badger's #5 & #6 & #12).
5) The TV animation business has always had periods of work followed by periods of layoff. It was that way in the 1960s and 1970s when Saturday morning cartoons provided seven months of employment followed by five (and sometimes six) months of layoff. There were "hiatuses" then, there are "hiatuses" (aka unemployment) now.
5) Best investing advice I ever got? -- keep it simple, keep it constant, and know your threshold of pain. You can't be an effective investor if you react emotionally to markets' ups and downs and pull cash out at the wrong time. If you're unable to endure financial pain without panicking, if you have only a sketchy knowledge about stocks and bonds, read one or two good books on the subject; if you don't have time for math, calculators and slide rules, set up an asset allocation with an all-in-one fund that has both stocks and bonds with the amount of risk you are comfortable with, and let the pros handle your investment stash. Then feed money into it week by week, and only look at how the fund is doing every seven years*.
* A Fidelity Investments study found that the best Fidelity investors were people who forgot they had investments there.
