Regrets, I’ve had a few, but then again, too few to mention. Frank Sinatra
Wealthy people have no regrets, right?
Haha! That’s often the perception — that because someone has amassed a large net worth then life has been (and will be) a bed of roses.
Uh, no.
If you thought wealth made life all rainbows and butterflies, this post be a shocker.
Today I want to share the biggest regrets millionaires have. In my millionaire interviews I ask them if they could go back and do it all over again, what they would do differently.
Today we have their responses summarized into the top five millionaire regrets.
Just to note, this post is similar to the millionaire mistakes we’ve covered in the past. The difference is that the mistakes are things millionaires did and wish they hadn’t done. This post will list things millionaires didn’t do and wish they had.
As I’ve done in other millionaire updates, I’ll let them explain in their own words and add my thoughts after each point.
Let’s get started…
1. Save more earlier.
By far this is the most frequent response — millionaires wish they had saved more money earlier in life.
Here’s what they had to say on this subject:
I would have saved more as soon as I graduated from college and I would have invested entirely in index funds.
Additionally, I would have purchased a duplex or quad to initially live in which would have become a solid long term investment.
I wish I could have maxed out my Roth IRA’s as soon as I had a job in my early 20’s.
I would have started investing in an IRA as early as possible. Even though it was only $2000 maximum contribution for the longest time, it still would have compounded and grown.
I waited until my forties to start contributing to tax deferred investment accounts, which is STUPID.
Fortunately, the majority of our liquid net worth is in a taxable account so there are no tax penalties when we need cash in early retirement. I won’t tap the IRA for a long time.
We would have saved more and started earlier.
We would not have panicked when the market crashed.
We would have invested more during the crash.
I probably would have been much wealthier without my flying addiction but it’s my passion. I didn’t go as nuts as I could have on the flying costs but I probably should have recruited co-owners with my first 3 of 5 airplanes long ago which I’ve done for the past 12 years on the latest two.
From age 23-33 I did save diligently in my 401K (but did not necessarily max it out) and then would take out 401K loans for big expenses or to pay off bills; essentially I was never able to accumulate any substantive principle. Those early withdrawal or loan penalties seemed like nothing at the time.
It was such a miss to not understand savings and compounding early on. Time is the most important thing in the context of money and I lost or blew 10 years of time and money. I can only imagine what good financial shape I’d be in if I had used those 10 years wisely.
I’d also avoid credit cards- and cash advances and high interest rates, etc. like the plague if I could go back; they really drug me down and kept me down for longer than I should have let them. I clearly had spending and discipline issues as I always made good money and for some reason it was never enough. Now I only use credit cards for big purchases so I can get my points and then I pay the balance off pretty much immediately.
Like many people, we should have saved more at an earlier age.
I can relate to this as it’s one of my biggest regrets as well.
For many, not saving early (or saving enough early) can be an almost fatal money move. It sacrifices years (or even decades) of compounding — something which can drive wealth at almost any income level. To give that up is a big, big regret.
So I get it, for sure.
That said, kudos goes to these millionaires for seeing the errors of their ways, making changes, and ending up wealthy in the end.
2. Missing career opportunities.
Now we leave the “save” arena and the “earn” world.
Turns out that millionaires have regrets about their careers, despite the fact that they’ve had wildly successful careers.
The following comments summarize most of their sentiments:
I think about this frequently. A lot of people tell me I missed my calling in life and should have been a doctor. I would seriously consider going to med school if I had to do it over.
I should have been more open to changing jobs rather than being loyal to companies that didn’t return the loyalty. When our boys were expanding their math skills, one commented how I had survived over 100% layoffs during the previous couple of years – and he was right!
A couple thoughts here:
- I’m not sure I would have chosen a different profession if I had to do it all over again. I enjoyed business and doubt I could find something I liked better.
- Changing jobs/companies, asking for more raises, learning what it took to grow my career earlier in life — I have regrets about all of these. Yes, I did average over 8% annual income increases throughout my career, but if I had done more I think that could have earned much higher gains, which would have put me at financial independence much sooner.
I suspect that many reading this have career regrets as well. Anyone want to share theirs in the comments below?
3. Missing out on real estate investing.
Since we’ve covered, “earn” and “save” so far, why not round out the group and talk about investing regrets? Haha!
Does anyone else find it interesting that the top three areas where millionaires have the most regrets are the three basic tenets of this site?
Maybe it’s just me. 😉
Anyway, here are a couple top investing regrets:
Post undergrad – I wish I had taken a harder look at real estate investing as an income source earlier in my career. I always thought I didn’t want the hassle but when I looked at it in terms of financial independence, I realize I would gladly trade a couple hours a month for the cash flow stability over time as well as the ability to leave my full time career if I so choose.
Post MBA – I regret not getting into the housing market in San Francisco. I could have purchased something to live in back in 2010 when I moved here. Really it just means I missed out on a great leveraged bet over the past 8 years.
In general I’ve always shied away from debt that would dramatically eat into my ability to save in the near term, even when doing a deal might be the long term way to maximize my net worth.
If I had had the time or interest, I would have pursued the acquisition of real estate.
I would only recommend that to those of you with the time and interest to learn everything that you can about it, due to the obvious risks involved. I do recognize it, however, as an excellent method for wealth accumulation.
Ah, yes. I follow the pack and have some regrets here as well. Namely:
- I wish I had started investing in real estate earlier. If I had tried the one-house-per-year-for-20-years method. I think I could have done quite well.
- Even when I did start investing in real estate, I held on to my desired return too tightly and thus missed out on a ton of great properties. Today those units would be churning off cash like crazy.
- Before all of this, I missed out on house hacking. If nothing else, this would have saved me a boatload of money early in my life which then could have been saved/invested for a long, long time.
Anyone else have real estate investing regrets?
4. Not getting an early financial education.
We now enter into two more general topics. In this one, millionaires regret not knowing more about managing personal finances earlier in their lives.
This might be a surprise to some. After all, if millionaires didn’t understand managing money early in life, who would?
I’ll let them share their regrets in their own words:
I would have studied personal finance more and not hired a financial advisor.
I also wish I would have read the Millionaire Next Door earlier and John Bogle’s writings. I think I could have skipped a lot of fruitless study of market timing and stock trading that never panned out anyway.
Ask more questions.
Skip the snooty “wealth management” people and go with low-key people you can trust, who want to explain things, are a fiduciary, and charge a flat fee not a percentage of assets.
I was lucky in this area. I started coaching people on finances at my church soon after we were married. I read The Millionaire Next Door soon after that.
The combination of these two got me started on the right path, though it took years to get all my kinks worked out. 😉
Anyone else wish they knew more sooner?
5. Various personal regrets.
Finally we come to more of a catch-all category, most of which only have a slight relationship with money:
This is a difficult one but my work/life balance in my 30’s is one of the reasons my first marriage didn’t work out.
I can’t turn back the clock to see if I wouldn’t have put work first what difference it would have made on my personal life or net worth but if I could change anything it would be to enjoy life more then. I am making up for it now though.
I would definitely have tried out for the track team in high school. After that I’m happy with all of my career and personal life decisions. I see failure as an opportunity to learn so that next time maybe I can succeed, so I would keep all the failures.
My wife and I often have said that one do over would be that we would have had one more child. That obviously has nothing to do with money, but that is one thing we have said to each other.
I have several thoughts here:
- I had a long stretch where my work/life balance was not in balance. I had too many hours at work and it was tough on me and my wife. Thankfully I eventually got a job that paid me well and only required a 9-to-5 commitment. I was blessed to find it.
- I agree that failure is a chance to learn. Unfortunately I repeated some mistakes more than once, so I wasn’t always the fastest learner in the pack. Haha!
- I too would have liked to have had more kids — one at least but maybe two. Our two kids are great, and I simply wish I had more like them. 😉
At some time I’ll probably do a “my biggest life regrets” post or perhaps include them in a retirement update, so for now I’ll leave it at this.
So those are the top five millionaire regrets. See any that you identify with? Or perhaps you have some not on this list?
Share your thoughts in the comments below.
Xrayvsn says
When I was a medical resident I wish I contributed fully to the Roth Ira accounts. It is the one time as an MD where I could contribute without worrying about income limits.
I wish I paid off my student loans by living like a resident the first few years out of residency and knock them out. I graduated medical school with probably $160k of loans in 97. I did forbearance and deferment until I became an attending and then paid the minimum. It was almost 22 years from when I first signed the loans to when it was finally paid off, probably paid $600k or more because of it.
I wish I learned about finance earlier as well and discovered index investing sooner. I got taken for a ride by a commission based financial advisor who put me in front loaded high expense ratio funds. Fortunately the money that early on in my career wasn’t too much.
I also wish that I had more of a backbone and didn’t cave in to my mother’s wishes to marry a girl not of my choosing (arranged marriage). The subsequent personal and financial misery set me back more than a decade. I figure I lost 7 figures from the divorce alone.
Happy1 says
One of my biggest regrets is not having a well funded emergency fund. For me 3 to 6 months income savings is not enough. In looking for employment opportunities it has taken 9 to 12 months. I have had many temporary jobs to fill in for income before finding a reasonable job. I have borrowed from my IRA which has decreased the effectiveness of compound interest.
Kevin says
Excellent contribution although I empathize with 3-6 months emergency funds not being enough.
IncognitoMillionaire says
Timely career reminder, thank you! I just gave notice yesterday and was immediately told “name your price to stay”. Sadly after 6 years of trying at this place there is no monetary price for growth opportunity and the right team fit. I was also asked (by the owner) if my husband knew what I was doing…so yeah see team fit comment.
D says
Sounds like you are making a good move… 😮
GT says
Sounds like you made a good choice to me too! I really like your username by the way.
Richard says
I will also second that–at most any income level, a year’s worth of cash for living expenses has nearly universal appeal and just makes sense. If you can’t swing it in a year, then . . . not to mention another recession or something. Currently is my number one priority, getting cash up to 15k+, ever since nasty rumors started my department could go bye-bye. That and revamping all my exit strategies. It’s all about choices, not having to panic. But the largest regret for a low-level non-millionaire would be allowing my personal credit abuse (multiple cards, Lending Club / Prosper loans) get in the way of my preapproval gambit. Yeah, I got the deal of a century, nailing one of the best leftover houses (foreclosed) from the Great Recession–it’s value has tripled over the last four years in this super red hot, now low-inventory market, recently overrun by Seattleites, Californians and Texans on the make. Still, the preapproval margin was restricted to just 75k(!), impossible to work with by some lights. But I ignored every realtor’s hype and bs, fortunately, and plowed through into accidental genius land. STILL, for twenty grand more, several duplexes and quads were concurrently available. For historic renters, now homeowners, claiming a 1 or 2 bedroom unit while renting out the rest would have been the thing, no doubt about it. I’ve had co-workers, the drug-tested financially stable kind, begging me for a spare room to rent, at most any reasonable price, for YEARS. So they could also enjoy my eight-minute commute, and the savings, versus their hour plus, and all those costs. When I lived further out, gas alone was three hundred a month extra. Anyway, before the big purchase (lol) we were renting a condo out in the same neighborhood, so we got to know it well, but I also accidentally learned something else. Our landlady got things fixed ASAP without question, and never raised our rent for over five years, off-lease. Some of you salivators may recoil in horror over that lost opportunity, from her respective, but she owned the building outright. We stayed there five years, the neighbor for ten and running, nice and stable. Imagine all that sweet cash, and no headaches, month after month, for a decade or more. So yeah, I missed out on a quad, or a duplex, for being a rank consumer. Now they’re all gone, and all that personal debt, and the other game seems fine, but regrets, yes; I’ve definitely had more than a few, though I’ll skip the rest for today.
Richard says
From her PERSPECTIVE, should say, if you know what I mean . . . but as it turns out, smartest landlady I’ve ever seen, as opposed to all those slumlords and scorched-earth corporate types, raising rent up to three times while taxes remained stable. I never forget the names of my enemies, though. When I was a child, I was allowed to open a savings account and put in a couple dollars. I didn’t get it, at all; I was more interested in girls, Bubble Yum and BMX bikes. Eventually it withered down to 60 cents where it stayed maybe two years. Then they closed the account on me, and kept my 60 cents. American Marine Bank. Those f*ckers still owe me .60 plus interest (lol) . . . largely my fault, of course, as if that possibly matters! They got swallowed up by some other killer, and now several decades out it’s not even a bank. I keep sixty cents stacked on the credenza, by the front door, to remind me. Never forget . . . there’s the life of a butth*le, on the fringe. Keeps me focused, though, if for all the wrong reasons.
Maria says
One regret that I have that might sound silly but weights on me (now that I’m older/retired/millionaire) has to do with financial literacy. Back in my 20’s, we received a subscription to Money magazine for one year (it was a gift) and although I tried to read it, it was totally over my head! I often think that if I TRIED to understand all the concepts presented, we could have done even better in life.
Simple Money Man says
Yup, save early and often. You can get almost anything back if you try hard enough, EXCEPT time!
Middle Aged Investory says
My biggest financial mistake was “Lifestyle Creep” . I think many of us fall into that trap when we hit career milestone changes and forget that we don’t need to match our new income with a spend plan. Even though I continued to invest and increase my investments during those times, I didn’t increase them as much as I should respectively to what my income increases were at the time. In other words, I should have saved more until it hurt.
GT says
I have let my lifestyle creep for sure. With eyes wide open though and as long as my income and savings outpace the expense creep I have allowed it. We live well, but we also live well below our means!
Tom says
I wish I would’ve better understood the declining nature of pensions and perhaps been less quick to leave some of jobs I had that offered them.
Who knew that they were going to go away so quickly??
I now have a much better appreciation of the value of “mailbox money”, and frequently mention it to younger people who are still working.
Don says
Selling my 1968 Z/28 camaro when I was young and newly married. Considering the current price of 60’s muscle cars, would have made for a fun investment over the years.
Ksarraga says
Two regrets centered around early savings and career. Those regrets are:
Listening the family accountant who told me in my mid 20’s that I could wait until I was 30 to start contributing to an IRA. By that time it was financially difficult to contribute regularly and I missed out getting a good early start with compounding.
Not understanding how to manage my career better to maximize income. I graduated with a Masters in Fine Arts concentrated in Metalsmithing, not exactly a lucrative high demand field. I turned it into a decent living in Manhattan for several years, self-employed, but it didn’t leave much for savings. Took my business skills and transitioned into administrative jobs in sports marketing then marketing in the food manufacturing industry. My hard work ethic served me well but I never pushed for promotions, better raises, etc. I took what came to me which was generally above average but I wonder if I could have done better if I had been more aggressive. I am retiring next Spring after 18 years at my current company. My pay was at mid to high range for the area and industry but an average to slightly better raise was always followed by a few years with no raise. About half way in decided to stay because it was comfortable and secure, it was a 10 minute commute and they allowed me flexibility to work remotely as I came to a point where I needed to care for aging parents with Alzheimer’s. It was a family owned business and it was also a fun place to work with good co-workers. Hard to beat some of those benefits and I choose to stay rather than look for greener pastures. The family sold to new owners and things have deteriorated over the past few years. During the past 18 years I contributed the full amount to the 401k, hubby and I aggressively paid down the mortgage and built up savings so I am pulling the trigger and retiring. Overall things have worked out but I can’t help but wonder if I could have done better if I better understood the concept of managing a career instead of just riding the wave.
Happy1 says
You don’t mention if you had children. Sandwiched between aging parents and children does not allow for much career advancement. You trade time for money. Time to spend with your family is priceless.
KSarraga says
No children and yes, the time was invaluable. Especially since my parents were 3000 miles away on the other side of the country. I managed all of the finances, medical paperwork, rental management of their house when they moved to assisted living, etc. and my brother was “boots on the ground.” But more than once I was on a plane, sometimes at short notice, to handle issues when he was out of town. That flexible work arrangement was so important.
getagrip says
As I’ve gotten older I care less and less about regrets. Typically a regret is just an assumption that if you had made a different choice your life today would be so much better off for it. But how much of a load of crap is that? When I really look back at my “regrets” I see they led me to where I am now, like it or not. I may regret the relationship with the woman who broke my heart, but that taught me what I wanted in a relationship and led me to a multi-decade marriage still going strong. I can regret not going into business with my friend who became a multi-millionaire before the age of thirty, but then again he went bankrupt while I’m still steadily working in a career and financially in darn good shape. So it goes. In my ideal imaginings I would have still met my wife and avoided the pain, but chances are I wouldn’t have and we likely would have passed by each other. I can imagine I would have helped my friend avoid the bankruptcy and we’d both be multi-millionaires living the life, but knowing our dynamic, I doubt it. But even if the imagined outcome would have been great, so what? Not like I can do anything about it now.
Essentially when people think about regrets they are generally thinking how their lives could be better today “if only…”, but while looking at regrets for insight into what you want or how you want to live is okay, I’ve met way too many people who use their regrets to saddle themselves with chains preventing them from moving forward today. Plenty of self help and philosophers have said it one way or another. The past is simply set in stone and no fussing about it will change it. The future is an amorphous unshaped blob that can change in a second because “future” isn’t just twenty years from now, it’s also a second from now. Don’t think so? Get that call telling you someone important to you died or get called into the bosses office and get told to clean out your desk. Your life can change in a second and the future isn’t all “out there someday”. But honestly, the only thing we have is today and what we do with it and let’s face it, today is a trade off as we get hit with multiple choices daily and the best thing we can do is make decent choices that include choosing to plan. So do you work to meet your goals or go golfing? How about clean the gutters or watch TV? Hang with the kids or make a comment to a blog post? I’m picking hang with the kids now, cya :-).
MMiguel says
Amen… I completely second every single word getagrip said. Ain’t got no time for regrets. I prefer to deal with life as it is in reality and the road that got me here is what it is. There is no way to know how a different road would have turned out.
Sure, has life been grueling and hard at times – yup you betcha. Have there been gut wrenching twists and turns along the way – yup. Has there been disappointment and heartbreak – of course. Have I done some dumb things and made some stupid decisions – yes of course (though marriage has certainly reduced the frequency of dumb/stupid decisions to near zero).
Could I have done better in life, could I be wealthier, could I have nicer homes, better cars, etc. – well sure, probably, but at what cost is the question I ask myself. And how much is enough, really? Yes, more is better, but I have enough. I have more than most.
For me, I would be truly embarrassed to have regrets.
Joy says
Quite interesting to see that a few of the millionaires actually regretted using advisors, chasing returns and timing the markets.
Means there’s hope for the average guy as apparently not all millionaires are necessarily stock market gurus.
Richard says
Yeah, I’ve definitely noticed that theme, having read the most recent 10 interviews or so, then going back to the beginning with M-1, now up to M-22. Index funds, period; at my level, preferably through Vanguard, though I found a perfectly awesome S&P 500 fund (.19 expense ratio!) hiding in the middle of my otherwise terrible, brand new 401(k). I set it at 100% and now get monster returns, instead of all that dog-level volatility and crumbs, as with the old 401(k), before my company upgraded. Sort of should say, since the prepackaged portfolios they otherwise offer are appalling, actively-managed, loaded dogcr*p, as bad as the old plan. Still, all the money in the world can’t save the millions upon millions left behind in this country, vulnerable to stagnant wages, massively overpriced college options, and horrifyingly expensive real estate. My home’s value has tripled in four years. Five more years out, barring something worse than the Great Recession, it will probably be worth six times or more. Yeah for me, but for the young or low-compensated it’s a brand new nightmare. I mean really, is every Western state going to end up like Tokyo? Or even worse, like Silicon Valley, a minute island of prosperity in a sea of poverty, hardship, and crime?
MMiguel says
Joy, I can assure you all millionaires are not stock market gurus. I know many multi-millionaires, including myself, who think of securities more as a parking place for funds, than a generator of wealth. And once you get into deca-millionaires and above, of whom I know quite a few, it is from one of more of the below:
* Starting/building their own business
* Reaching a C-level position in a megcorp (and the attendant salaries, bonuses, & stk options)
* Building a professional practice that expands above and beyond (ex. doctor who creates a private surgical hospital business, and then IPO’s it)
* Real estate investing & developing… one of the greatest ways for the average person to become wealthy
* Certain types of very high-comp professionals (ex. Wall Street, I-bankers, traders, PM’s, etc.)