How an Executive at a Technology Company in His Fifties Does Money

By Michelle Song August 13, 2018

So, how much are you making?

I make more than $500K annually, but less than $700K. However, it really depends on stock options and bonuses, which are based on how well my business area does and how the company performs.

Can I assume you’ve reached financial independence (FI)?

Yes.

What did it feel like to reach FI?

First, let me define what FI means to me. If you are young and you live below your means, you are on some spectrum of FI. If you make a large salary, but your lifestyle meets or exceeds your salary, you are not yet FI.

When I reached FI, I was relieved. However, it was somewhat anticlimactic because there wasn’t a definitive moment. Unless you receive a windfall, FI happens very gradually over multiple years. Oftentimes, you don’t even know when you reach it, it just happens. It also depends on what kind of lifestyle you want to live for the rest of your life.

Also, of course, I knew I was fully FI when I had amassed enough wealth to be unable to spend it all in my lifetime. I was able to plan my legacy — how much I want to pass on to my kids and how much I plan on donating to charity.

What’s the worst financial decision you’ve ever made?

I definitely invested too heavily in single stocks during the dotcom era. I got caught up in the frenzy and followed the masses chasing quick dollar returns. You have to do your homework. Don’t follow the hype.

Speaking of hype, what are your thoughts on bitcoin?

The technology is interesting. I predict that in the future, bitcoin technology will become part of other solutions outside of its intended currency solution.

Would you recommend index funds then? Is slow and steady the way to go?

The answer is, whatever you’re comfortable with. You always have the option of diversifying your portfolio with a mix of single stocks and index funds. Just do your homework.

How much time does it require to do your homework?

There are many facets to doing your research. You have to know current events, which is a daily activity. Current events impact stock prices and peoples’ reactions to events. They may impact housing prices as well.

So what do you do well, and what do you wish you could do better?

Overall, I’ve had success in picking stocks that I did my homework on. I would advise people not to have a portfolio consisting solely of single stocks, however. For single stocks, I only invested money I would feel comfortable losing.

I could have done a better job of diversifying my portfolio by getting into real estate.

It’s not too late.

It’s never too late.

What’s your money philosophy?

Money is a necessity, but it’s not everything. You just need enough to keep you happy. Surprisingly, it’s not that much.

Have there been any surprises along the way? In your career or your journey in building wealth?

Not really. No big surprises. I learned that career changes are a big deal because they alter your income and strengthen your safety net.

The other life-altering change is when you find out you have cancer. You don’t worry about money as much as you did before. When your health is in jeopardy, your perspective changes.

How so?

In one sense, you feel pressure to ensure that you have enough for the people you are leaving behind. At the same time, you feel that money isn’t everything. It’s the love of your family and friends that keep you going.

What advice do you have for Billfold readers?

Live within your means, save 15-20 percent of your salary and invest wisely. Learn about investing and just start. Start now.

Michelle Song does things including writing, editing, and nurturing a Meyer lemon tree. She is an older Millennial unlikely to be found anywhere but her inbox at michellesong101@gmail.com.

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