How Old Were You?

Some do it earlier than others

So, how old were you the first time that you…

Hey, it’s not what you’re thinking. Get your mind out of the gutter!

I may have asked that question twenty-five years ago when I was in my twenties. I only want to know how old you were when you first did something else. I’ll share how old I was.

I became an Adult Probation Officer for what must be the most inefficient, politically-motivated county in the U.S. back in 1993.

I was about a year out of college, having spent some time employed as a court clerk for the same county while spending my non-working hours hanging out with my buddies, traveling to visit my girlfriend or have her visit me on weekends, coaching my brother’s pony league baseball team with my father during the summers and searching for a more meaningful and higher paying job.

The clerk position paid around $8 or $9 per hour, hardly fitting for a recent graduate from UW-Madison, but communication arts majors from that school were not in high demand in the Chicago area at the time. Had I decided to seriously pursue a job in that field, I would have had to accept an internship or overnight position at some local radio station for minimum wage or less.

I wanted to earn more than that and did not know what I wanted to do with my life at that time and still often do not. So I took a job with the Cook County Clerk of the Circuit Court’s office and processed arrest warrants for nearly two years while ostensibly searching for a better job.

I had several close friends at the time including two that I remain friends with at present. All three of us had crummy jobs that did not require college degrees and all three of us currently have jobs that pay in the low- to mid-six-figure range.

The guy who I most often refer to as my “best friend” is a computer programming geek for Blue Cross Blue Shield of Illinois and my other best friend is an elementary school principal, although at that time he had not yet even become a teacher.

The guy who was my third best friend back in those days is currently a tech firm executive with Oracle in North Carolina. I have not spoken to him in over ten years, but my wife still kind of communicates with him by liking each other’s posts on Facebook.

At the age of twenty-three, I was accepted into a six-week training class of twenty-four new adult probation officers. Shameless plug — for my detailed account of what that was like, check out The P.O., which I wrote under the pseudonym George Kawalik.

Just before turning twenty-four, my wise maternal grandfather bought me a gift subscription to Money magazine, took me out to lunch at my favorite Chinese restaurant at the Old Orchard shopping center in Skokie, and explained to me why I should begin investing. He handed me a book by his investing guru, John Bogle, the founder of Vanguard, and urged me to read it.

I knew that my grandfather had a decent amount of money, but I had not ever cared about how much or how he came about it. I knew that he often repeated the same long, boring stories about his career working for the Chicago Post Office and that he was very diligent, hard-working, generous, and loving.

His wife, my grandmother Elsie, had passed away several years earlier.

I did not know investing from anything else. I knew that my grandfather did it and I otherwise thought of it as something that only rich people did. I did not yet think of it as a way to become a little bit wealthy as I think of it now.

Even though I kept that first John Bogle book and the subsequent ones that my grandfather gave me on my bookshelves for many years, I never read them all the way through, ultimately donating them to Goodwill. They were too dry and boring for me at the time, but I could give you the gist of all of his books in a single sentence: automatically invest for many years no matter what in an unmanaged, low-cost index fund and you’ll do just fine.

Bogle’s, and thus my grandfather’s, philosophy on investing worked well when he conceived of it, it works well today and it will likely work well for many years to come.

I was turning twenty-four, wanted to move into an apartment with my girlfriend (who became my fiancé at the stroke of midnight as it turned 1995 and my wife in June of 1996) and have a good time with my friends.

I had no aches and pains at the time, I could get “excited” and ready at the drop of a hat and I figured that I would find some way to become massively rich in the future after being a P.O. for a couple of years even though I had just begun pursuing a master’s degree in public administration (MPA) that I ultimately received when my soon-to-be wife was pregnant with our son less than two years later in spring 1998.

Not exactly the path to massive wealth.

My grandfather had a passive-aggressive way of helping me invest, first for myself and then later for my children. “I’m by no means telling you what to invest in,” he would say. “But a fund that I really like is…”

That fund would always be with his favorite and the second-largest fund family started by his investing guru.

He, himself, was invested in two funds that I have now held for well over a decade, the Vanguard Wellington fund and the Primecap fund (still closed to new investors). He invested regularly with the S&P 500 Index fund. Additionally, I later found out that he invested heavily and had several hundred K invested with the Health Care fund.

Taking his cue, and a few thousand bucks that he handed me in a check to get started, I made my first investment, opening an IRA with Vanguard and investing in the S&P 500 Index fund.

Being the imbecile that I once was, I had to cash that out along with a few thousand other dollars to purchase a car when our son was a baby. I regret doing that, but my wife and I were seriously strapped for cash at the time; she had recently become a stay-at-home mom and we had purchased a condo in Evanston and badly needed a safer car that the three of us could drive together in.

Like many people now, the only way that I could scrape together a few thousand dollars for a down payment was to cash out what I had contributed to my IRA, so that is what I did.

Moving on, I kept a few hundred invested in the IRA but rarely contributed anything more to it.

Later on, as I expanded from Vanguard to the T. Rowe Price family of funds I currently have my Roth IRA as well as some additional accounts with, I began contributing more regularly. I had been reading Money magazine and Kiplinger’s Personal Finance long enough by that time to realize that the advice that my grandfather and his guru, John Bogle, had extolled was sage advice indeed.

It is many years later, of course, but my personal finance mantra is to Pay Yourself First, although in my case I call it “Paying Ourselves First.” My wife is truly my better half, but she leaves the “money stuff” to me.

I opened her Roth IRA on her behalf and currently send $500 per month to it come rain or come shine. Left on her own and never told by anyone but me anything about investing, it is highly doubtful that she would have ever opened a retirement account.

Thus, the age when I first began investing, with the disclaimer that it was started with money that was given to me and I did not add much to it for quite some time, was twenty-four.

More telling, the age when I set my mind to invest for someone besides myself, our son, was at the age of about twenty-nine when I opened a long-defunct account on his behalf with the super poor performing fund, Stein Roe’s Young Investor Fund. I cashed that fund out ages ago for a steep loss, percentage-wise.

One of the hundred-plus electronic newsletters that I consistently read nowadays is the Motley Fool. Katie Brockman’s article, “This is the Age When Most People Start Saving For Retirement” is what sparked these thoughts.

I often think how the advice that I dispense, among many thousands of other similar ones, is best given to those around the age of twenty-four, half my age now and the age when I first stroked a check to Vanguard with thoughts about saving for some distant future time which is far less distant to me now than it was back then.

Brockman writes that nearly four in ten workers started saving for retirement in their twenties, like I did, in a survey by Morning Consult.

Roughly one-quarter began in their thirties, and another quarter waited until their forties or beyond to start saving.

Also, 8% of workers began at a very young age, before twenty. I am working on urging my highly ambitious and motivated daughter to be one of those super-smart young savers. Right now, she is more motivated by attending concerts, purchasing trendy clothes, and dining out with her friends than she is about her retirement savings.

A separate survey from Nationwide found that among all American workers, the average age to start saving was thirty-one years old. That is promising news because if you begin saving in your early thirties, you will have several decades to build your retirement fund and to better weather the market’s inevitable ups and downs. If you wait much longer than that, you will need to save considerably more every month to reach your goals.

I am in that “catch-up” boat, not so much because I started late.

Twenty-four is a fairly commendable age to begin contributing to your IRA. The thing is that I did not invest much, if anything at all, for quite a few years. I was trying my best to make ends meet and to support a family of four in the northwest suburbs of Chicago on a salary that slowly crept up from the forties to where it is today, about one hundred and forty grand.

I have contributed to a defined benefit plan for more than twenty-seven years now and would qualify for a decent pension at the age of fifty-five, but I want more out of life than just getting by on a decent fixed income. I want to and plan on growing my income into multiple streams, as you and everyone else who is reading this should if you have not already done so.

I have much more to offer than just what I do at my day job, but I digress.

Reading Brockman’s article jogged my memory, making me remember checking the stock pages every day for years when I was a young P.O. operating out of 26th & California. I would calculate how much I “made” or “lost” any given day, typically amounts ranging between twenty-five and a hundred bucks.

These days, I have some days where the investments I have made on my own and my family’s behalf go up or down by several thousand. I try to not get too happy or upset about it although it certainly does not feel good for a person in my income bracket to lose more than a thousand on investments in a day.

During one of those meltdown days when the Dow dropped 800 or 1,000 points or more in the last year or so, our accounts dropped by about seven grand. Ouch!

I suppose that losing or gaining amounts like that would have been impressive to me twenty-five years ago when the grand total of my investments was the $2,000 that my grandfather had given me. I remember sending checks for $100 or sometimes $200 or $250, dreaming of the day that those amounts would double, quadruple, or more.

Had he told me to Pay Myself First every paycheck no matter what back then, I probably would have been doing so for the past twenty-five years. Perhaps John Bogle never wrote to do that in his books or perhaps he did but I never read the words.

Either way, the first time that I wrote a check to Vanguard was right around November of 1994, when I was still single but soon to be engaged.

I had just recently moved out of my parents’ home and into the rough (and still rough) Rogers Park neighborhood on the far north side, a new graduate student attending night classes at UIC, the University of Illinois at Chicago, and a hard-ass P.O. who spent his days in the office and on home visits. Back then, I spent many nights in court surrounded by the drug dealers, heroin junkies, gang-bangers, pimps and hoes, thieves, rapists, and murderers that were so prevalent in Chicago and always will be.

It was over half my lifetime ago when I was twenty-eight years younger than I am today.

So, how old were you when you started saving for retirement?