The following article was originally post as a guest post at Cashflow Sherpas, to view it in it’s original form, click here. The following article is an updated and slightly improved version of the article, but updated enough to make both stories significantly different!
During my college years, I had a fun time, but even so, I think I could have had more fun while at the same time optimizing my finances.
While I was very frugal and did have some investments, I did so by living a fairly frugal existence in college. Often times, my college roommates would find clever activities for us to do because nobody had money make then. While I participated in some of the cheaper activities, I missed out on the ones that others would charge to their credit cards. Today I look back and I believe I could have had a better mix of frugality and spending.
Now don’t get me wrong, I’m not saying it’s okay to use credit cards and build up debt! But if I had to do it over again, I definitely would have used some of the money from my investments.
In fact, if I had to do it all over again, I would have invested money that I made from working since I was sixteen into investment. I would also invest all the money I got over the years from birthdays and Christmas, into investments that would yield dividends.
Next, I would have created a spreadsheet that tracks all my finances including the dividend stream from my dividend stocks.
The beauty of having such an income stream would be that I could have maximized the money to use to have more memorable experiences back then. Many of these are age specific experiences that once you miss them, you really can’t go back! So I would urge others to do such a thing, especially if you are too frugal like I was!
I was so frugal, that there was a point in my life where I wouldn’t even go on a date because I felt like I couldn’t afford it. Luckily, I was still able to find a few girlfriends that I was able to go out with while staying on a frugal route!
The above is only part of the process though. It’s the bean counting part that while crucial, in just part of the puzzle. The other part is spending intelligently, and keeping your eyes open for opportunities to make money. In fact, I think being aware is the most critical piece of the maximization puzzle.
While I don’t see any obvious, risk free opportunities that would have made me rich in college, there were definitely opportunities that may have made it happened if I tried! If you don’t explore and try such things, you’ll never know. You don’t have to start the next Microsoft, it could be a small money making venture, experiment!
While I have missed some life experiences, for my kids I’ve already creating an investment portfolio that will contain a portion that will have stocks invested in dividends, They will be able to use that money from the dividends for their potentially fun college fun expenses in the future. That way they will get to experiences more than I did while going the college thing!
In the end, it’s about developing a financial balance that would maximize your life.
Bests,
MR
It is good that you mention this. I should talk to my kids and get them started so that they can enjoy the benefits of passive income from dividends. My daughter is starting a summer job. I should talk to her about an IRA as well.
I think that would be an awesome move!
I’ve even heard of some parents letting their kids keep what they earn and then fund the Roth IRA with money equal to what the child would earn.
I think I struck a pretty good balance of saving and spending through college. I had a well-paying part time job most years and saved a portion of the earnings. I also saved a larger chunk of my summer income (there was a lot more of it). But I don’t think my savings prevented me from having fun.
I think you did it that best way! I missed some good concerts growing up, those experiences would be great to have now (along with pictures)…
I can relate to this. I gave up dates because I just couldn’t afford it either. Interestingly, my wife is a Naval officer and while she is Infinitely Attractive, she is what I call a no fuss, low maintenance person. Seems like that characteristic in a mate is something that I have always had.
Awesome looks and disposition! You can’t beat that combination! Congrats!
I see the benefits of using passive income, however my children learned a great deal from working their way through college. I gave them a budget I was willing to support and anything above that they needed to support. They turned out to be very successful adults.
I would like to get my kids interested in blogging. Not expecting anything but a few hundred dollars a month. Of course I’d be supplying the articles while they are in college, at least for a few days a week.
I was a pretty controlled spender in college but I wish my parents had taught me more about money and what I should expect living on my own. They made a lot of mistakes and are still struggling with debt. If I ever have kids I’m definitely going to give them lots of PF lessons and advice!
You and I are very similar in that fashion, I try to teach my kids (especially my son) about money. Both of my kids are good with adding and subtracting (really math in general), so I don’t have to worry about the math part of the pf lessons.
Most young folks have no value of money.
I think it’s great that you realized that you could have been able to have had both back then. Fun and also saved money. There’s no insurance in life that we won’t be gone tomorrow so creating memorable experiences while still preparing for the future seems like it would lead to a more fulfilling life.