MONEY First-Time Dad

What Adam Smith Taught Me About Child Care

Luke Tepper
The mental health of this child's parents depends on their division of labor.

The best parenting book you've haven't read was written by a childless British philosopher who's been dead for 200-odd years.

It’s 1 p.m. on Sunday, and a thick fog of panic begins to set in. Luke has just woken from his mid-morning nap and will need to go back down for a light snooze in three hours. If we miss that window, he’ll become too tired by bedtime and will holler for an extra hour before finally going to sleep for the night; and by the time he does, Mrs. Tepper and I will be hollowed-out shells of our normal selves.

But this afternoon is not an unscheduled pocket of time to be frittered away perambulating around Prospect Park. We have work to do.

Our mission is to retrieve a second-hand high chair (which combines a feeding seat with “a sophisticated pneumatic lift system” according to the ad), stop by the hardware store for air conditioning accessories, and buy groceries for dinner.

That’s just half the battle. Before we even get into our car, we must pack Luke’s diaper bag, collect a few of his favorite teethers and jam his apocalypse-proof $800 stroller into our trunk. This is all while entertaining the tyke so that he doesn’t cry, and detaining our dachshund behind the kitchen gate (which is intended for toddlers, oddly enough). Remember, we are just two normal humans with only four arms.

Here’s the really amazing bit: We got it accomplished. Like, all of it. Luke even passed out right after the clock struck 4 p.m. How? Well, it had a lot to do with Adam Smith.

In his masterpiece The Wealth of Nations, the economist discusses the benefits of division of labor with the example of a pin factory. Instead of each employee making a pin all by himself, each worker does one specific task, and in doing so the factory becomes much more productive.

“One man draws out the wire, another straightens it, a third cuts it, a fourth cuts it, a fifth grinds it at the top for receiving the head…”

Smith goes on to say that this system is efficient even for smaller factories with only 10 employees.

“Each person, therefore, making a tenth part of 48,000 pins, might be considered as making 4,800 pins in a day. But if they had all wrought separately and independently…they certainly could not each of them have made 20, perhaps not one pin in a day…”

Now, raising a child is not like making a pin. (For one thing, you don’t have to change a pin’s dirty diaper.) But splitting up chores, errands and responsibilities is a major reason why we still resemble functioning adults.

This wasn’t always the case. When Luke was first born, Mrs. Tepper naturally took charge. While I was absolutely terrified that one false start on my part would forever limit his boundless potentiality, Luke’s mother stepped up to the plate. She could pack his travel back while holding him in one arm faster than I could unfold his stroller.

She put him down for his nap, picked him up when he awoke and fed him. Even with the bottle, she was simply better at it than me. She was the superstar, and I was the benchwarmer.

Now, five months on, we’re more of a team. I developed my own rhythm with Luke, and now Mrs. Tepper isn’t the only one who can feed, bathe and clothe him.

Before we left that Sunday morning, Mrs. Tepper and I passed Luke between each other like a basketball. She pirouetted, diaper bag in hand, and I slid Luke gracefully into his stroller with three toys dropped onto his lap. It was an efficient, domestic dance that set the tone for a stress-free afternoon of chores.

Thank you, Adam Smith.

__________

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly.

More First-Time Dad:

Why a Maid is a Better Investment than a Divorce Lawyer

Why You Should Get Up From Your Desk and Go Home

Baby Clothes are Cheaper than Therapy

Why I’ll Send my Infant Son to College Before I Buy a House

Why Does my Baby Need Two of Everything?

MONEY Aging

Why It’s Never Too Late to Fix Your Finances

Those over 50 may become less sharp, but a little personal finance instruction can make a huge difference in their financial security.

When we speak of financial education today, in most cases we are referring to the broad, global effort to teach students how to stay out of debt and begin to save for retirement. But what about those who already have debts and may already be retired?

Clearly, we should teach them too. It’s never too late to improve your financial standing—and unlike financial education among the young, elders exposed to basic planning strategies adopt them readily, new research shows. This underscores the sweeping need for programs that address financial understanding at all ages and why even folks well past their saving years may still have time to get it right.

Last year, AARP Foundation and Charles Schwab Foundation completed a 15-month trial of financial instruction designed specifically for low-income people past the age of 50. After just six months of training, the subjects exhibited significant improvement in things like budgeting, saving, investing, managing debt and goal setting.

For example, only 42% of participants had at least one financial goal at the start of the program and 63% had set at least one financial goal after six months in the program. The rate of those spending more than they earned fell by a third and 35% had paid down debt. Many had begun to track spending and stop overdrawing accounts and paying late fees.

Participants saying they were “very worried” about money dropped to 14% from 22%; those saying they were “not very/not at all worried” jumped to 42% from 34%. These are remarkable gains in such a short period and among such a generally disadvantaged group. Half in the group had saved less than $10,000 and average income was about $35,000.

The research suggests that the 50-plus set can make big strides toward a secure financial life with some instruction. It jibes with other reports illustrating the value of financial inclusion for the unbanked millions and how a higher degree of personal financial ability might even save our way of life for everyone.

But let’s be clear: this isn’t just a way for low-income households to improve their lot. Plenty middle-class and even affluent households have a savings problem. And as we age we tend to make poorer money decisions regardless of our net worth. So it’s nice to see the financial education effort move beyond the classroom—increasingly to places of employment as part of benefits counseling and now, maybe, to community centers and retirement villages where willing adults can find it’s never too late to learn something new and feel good about their finances.

MONEY deals

TGI Fridays Introduces Endless Appetizers for $10

The casual dining chain terrifies and tantalizes customers with a new offer: all the mozzarella sticks, boneless buffalo wings, and loaded potato skins you can eat, for $10 each per person.

Let that sink in for a sec. Now, move your hand up to your mouth, and manually close your lips which, for one reason or another, are probably wide open right about now.

TGI Fridays, the casual dining chain mocked in cult-movie favorite “Office Space” for its requirement that servers be decorated with “flair,” has unleashed a potentially gust-busting special offer on America’s digestion systems this summer. The Endless Appetizer promotion, good through August 24, gives customers a choice of seven appetizers at a price of $10 apiece—with as many free refills on the order as you can stomach.

The appetizer choices are:

• Loaded Potato Skins
• Pan-Seared Pot Stickers
• Mozzarella Sticks
• Garlic & Basil Bruschetta
• Tuscan Spinach Dip
• Boneless Buffalo Wings
• Crispy Green Bean Fries

The offer comes at a time when TGI Fridays, and casual-dining segment as a whole, hasn’t been faring well. After struggling for years, which included several attempts to refresh the brand, TGI Fridays was sold to a restaurant investment group in May. The appetizer deal sniffs a little of desperation, and there are those who think that TGI Fridays will get burned.

Chris Muller, a restaurant analyst and hospitality professor at Boston University, told USA Today that he pictures big groups of customers taking advantage of the offer. “The risk comes when a crowd of six, or more, decides to get together and pool their resources, all ordering one item and sharing,” Muller said. “Then it is easy to predict that everyone will order at least six refills each, with plates being passed around.”

Such sharing is supposed to be discouraged at tables to prevent such appetizer offer abuse, but TGI Fridays says it’s not going to bust anyone who does so. “At the end of the day, our servers aren’t policemen,” said Fridays chief marketing officer Brian Gies. “We’re not going to slap someone’s hand if they reach over and share someone else’s mozzarella sticks.”

MONEY freebies

Skip the DUI and Get a Free Ride Home on July 4

Handing Over the Keys.
Jacom Stephens—Getty Images/Vetta

There are literally hundreds of ways to get a safe ride home after the July 4 parties have ended this weekend, including one service that's amazingly free.

The Fourth of July is right up there on the list of America’s drunkest holidays, with fireworks shows and beach parties beckoning revelers to celebrate into the wee hours of the morning. By most accounts, it’s also the deadliest day of the year on the roads, with an average of 127 people dying in car crashes every Fourth of July.

As if that’s not enough to encourage you to plan ahead and find a safe way home during the holidays, the cost of a DUI conviction could easily run $20,000 or more for a first-time offender. Also, bear in mind that extra state and local police will be working over the weekend, with efforts including but not limited to an increase in random checkpoints for drivers under the influence, among other offenses.

So please, for a million different reasons, don’t do something as stupid as getting behind the wheel when you shouldn’t. There’s really no excuse.

To help keep drunk drivers off the road, the AAA Holiday Safe Ride Program amazingly offers free rides, as well as a car tow, to anyone who has had too much to drink on a major holiday and shouldn’t be behind the wheel. It’s not necessary to be a AAA member; anyone can use the program to get a safe ride home.

The service is rolled out on all the major party holidays and drinking occasions, including New Year’s, St. Patrick’s Day, Cinco de Mayo, Super Bowl Sunday, and, of course, Independence Day. New Year’s sees the biggest demand by far for the service, and the Fourth of July is generally the second-most popular day for drivers under the influence in need of a free tow and ride home.

Heather Hunter, director of AAA public relations, is quick to point out that not every AAA club around the country is participating. And those that do—in Alabama, Arizona, Georgia, Florida, New Mexico, Texas, southern California, and elsewhere—want drivers to know they should think of the program “definitely as the service of last resort,” cautions Hunter. For many reasons, “You’re much better off if you can plan in advance for a safe ride.”

The association does not have national statistics on how many drivers actually use the service, which is known by different names like “Tipsy Tow” and “Tow to Go” in different parts of the country. One of the few branches that does provide data regarding its free holiday towing service, AAA Arizona, says that it has given free rides and tows on holidays to roughly 500 drivers over the last three years. “That’s 500 drunk drivers we’ve kept off the roads,” says Linda Gorman, AAA Arizona’s public affairs director. “We’re proud of that.”

Regional clubs around the country vary in terms of what’s allowed and not allowed with the service. AAA Arizona gives a free one-way ride to one person only, anytime from 6 p.m. on July 4 to 6 a.m. the following morning, and the person’s car can be towed a maximum of 10 miles. “This isn’t a taxi,” Gorman clarifies. “The driver will only take you home. You can’t get a ride to the next party or another bar.”

In addition to AAA’s brilliant service, there are plenty of other ways to get home safely after a party. Like a taxi. Or a designated driver. The latter could be a buddy, or a stranger for that matter. The nonprofit DrinkingandDriving.org keeps a list of designated driver services around the country, and at last check it had 615 possibilities in 46 states on file.

One of the more interesting recent developments in the world of drunk-driving prevention is the rise of anti-DUI apps such as BeMyDD and services like Shuttle Dudes, which allow impaired drivers to hire someone to pick them up—and drive their car to boot. The safe driver might come in a scooter or bike, which he’ll fold up and put in the trunk of the customer’s car.

Hiring someone to pick up your car and drive it (and you) home generally costs somewhere in the range of $15 to $30. A taxi probably runs around the same, more or less, and you can split that with friends who also shouldn’t be driving. No matter what the price, it’s nothing compared to the potential costs of driving drunk.

MONEY deals

15 Great Fourth of July Deals You Absolutely Must Check Out

Baskin-Robbins Two-Scoop Waffle Cone
Baskin-Robbins Two-Scoop Waffle Cone courtesy of Baskin-Robbins

This year, July 4 falls on a Friday. And given the sales we're seeing (entire stores at 40% or 50% off!), it's looking a lot like an early Black Friday. Happy National Ice Cream Month!

The deals range from popular apparel stores to restaurant chains, and from travel sites to online banks. Here’s a rundown (all sales on Friday, July 4, unless otherwise noted).

Aeropostale: “Everything” is currently 50% to 70% off at Aeropostale; “everything” is in quotes because there are some exclusions. It’s unclear when the special pricing will end.

Banana Republic: Use the coupon code BRJULY for 40% off your entire purchase, now through July 7. Items in Banana Republic stores are also 40% off.

Baskin Robbins: Through July, Baskin-Robbins is giving customers a free waffle cone upgrade with any double scoop order, in honor of National Ice Cream Month. An even better, buy-one-get-one-free offer is good through July 6 with this coupon.

Bonefish Grill: The total bill for three takeout orders of spicy Bang Bang Shrimp is $19.99.

Boston Market: Use the coupon in the link for 50% off any family meal purchase.

Buca di Beppo: Print out the coupon linked from the chain’s Facebook page for $20 off two entrees or pastas, valid through July 6.

Calvin Klein: A 50% off sitewide sale is in effect for online orders made through July 6. Some exclusions apply.

Capital One 360: During the online bank’s “salute of financial independence” promotion, customers opening up a new savings account get a $76 bonus, and a new checking account comes with a $100 bonus.

Easy Spirit: Women’s shoes are on sale on a buy-one-get-one-50%-off basis.

Gymboree: 40% off everything, meaning savings of up to 70% on items already on clearance, at the children’s apparel store.

H&M: Select summer items (T-shirts, tube tops, blouses, sneakers) are just $4 apiece.

Hotels.com: Use the code FIREWORKS when making a reservation of at least $300 by July 4, for any date now through the end of the year, and you’ll get a $50 discount.

MSC Cruises: A Fourth of July promotion brings prices down as low as $349 per person (taxes and fees extra) for a balcony stateroom on a seven-night Caribbean cruise.

Old Navy: Specials include shorts for $8, kids’ T-shirts for $4, and women’s tanks for just $2.

Omaha Steaks: Get four free burgers and four free jumbo gourmet franks with an order of at least $59.

MONEY Financial Planning

What Would You Do With $100,000?

Stack of Money
iStock

Deciding how to spend a large inheritance isn't as easy as you might think. Heirs who have received big bequests, along with financial planners, share lessons learned.

What would you do if you suddenly got $100,000, no strings attached?

It’s a hypothetical question for most of us. But for Peter Brooks, it was reality a few years ago.

After the untimely death of an old friend from pancreatic cancer, a lawyer called Brooks and told him there was a check waiting for $107,000, taxes paid.

With $30 trillion set to change hands from one generation to the next over the next 30 years, many others will find themselves in a similar position, according to Accenture .

While some may receive a few trinkets and others millions of dollars, the median inheritance will be between $50,000 and $100,000, according to a survey by Interest.com.

Handling new and unexpected wealth may sound wonderful, but can be a financial challenge. We asked financial experts to assess the decisions of three different beneficiaries:

WELCOME BOOST

For Brooks, a 55-year-old marketing consultant from the San Francisco area, the money significantly improved his quality of life.

At first, he deposited the check into a managed portfolio that his bank recommended. This was just before the market crash in 2008. Frustrated when the portfolio didn’t budge, Brooks rolled the money into a certificate of deposit, which turned out to be fortuitous.

“When the market crashed, I thought, wow, I must have a guardian angel,” he says.

Brooks decided that real estate was the biggest risk he could stomach, and he found an old Victorian house to buy for himself in nearby Vallejo for $97,000.

Indeed, buying a house is one of the most common financial moves people make with new money, according to Susan Bradley, a financial planner and founder of the Sudden Money Institute, based in Palm Beach Gardens, Fla., who specializes in helping people manage newfound wealth.

“If your inheritance increases your sense of home and safety, that’s a really lovely thing to do with it,” Bradley says.

Her caveat is that this works only if you’re able to handle the upkeep on the house, which Brooks has been able to do just fine.

A SPLURGE (OR TWO)

By contrast, John Kerecz, a 52-year-old environmental engineer in Harrisburg, Pa., went on a spending spree after he inherited about $160,000, plus a broken-down house, when his father died two years ago.

Because his father had his paperwork in order, Kerecz was able to quickly access the cash. He hired a lawyer based on the recommendation of a family friend, got the death certificate, and had a payout from the insurance company within a couple of weeks.

Then he embarked on a series of trips to Europe, Nashville, and New Orleans with his mother, who was in declining health, and eventually spent about $100,000.

What remained went toward a new home for Kerecz and his mother, who now suffers from dementia. He is trying to sell his parents’ original home and intends to invest the proceeds from that sale.

“I feel bad that I kind of blew it, but I wanted my mother to enjoy life while she could,” he says.

It may seem irresponsible, but using an inheritance to make memories has intrinsic value, says Bradley.

“Sometimes you can meet that purpose without spending $100,000,” notes Bradley, who says she would have coached him to take a little more time to figure out how to build those memories with just $60,000.

IN OVER YOUR HEAD

Many inheritors get in even further over their heads, especially if the money comes when they are young.

Richard Rogers, a financial consultant with Stephens Private Client group in Little Rock, Ark., had a client who inherited a significant sum at 25 and insisted on buying an $80,000 car.

“I tried to tell him that if you compound this money for a few years, you can buy a lot nicer car. But you can’t tell somebody what to do,” Rogers says.

CarmenBelcher could have used that advice, too, when, at 22, she inherited $300,000 out of the blue from her estranged father.

The money came quickly because her name was on his bank accounts and she was listed as the beneficiary of his veteran’s benefits.

Belcher responsibly paid off her college loans, then moved from Missouri to New York for a graduate program in journalism. She used what was left to support herself.

Now, eight years later, the money is gone.

She blames that partly on not being savvy about spending in New York, and partly on the money not being invested optimally by a bank adviser in Missouri who first helped her.

“It’s unfortunate, when people haven’t thought through it and, before you know it, [the money is] gone,” says Bill Benjamin, chief executive officer of U.S. Bancorp Investment.

The ideal thing to do is to draw up a financial plan before you start dipping into an inheritance, he says.

While Belcher thinks she is better off than before — she is building a career as a fashion editor in New York — overall, the experience was negative.

“I couldn’t appreciate the amount of money,” she says. “If this would have happened at an older age, I would have had more knowledge.”

MONEY Kids & Money

8 Ways to Teach Your Kids to Be Financially Independent

Kid learning to use abacus
When it comes to money management, your child can't do this alone. Laurence Dutton—Getty Images

Want your children to develop good money habits for life? Then teach them well from the start. Use these tips from parents and top personal finance experts as your lesson plan.

To help your kids master essential money skills—and some day break free from you—devote time to financial home schooling. Parents are the biggest influence on their children’s financial habits, more so than work experience or financial literacy courses, according to the National Endowment for Financial Education. For ideas on how to do this, see how personal finance and parenting bloggers and authors teach their kids.

1. Tie a “No” Today to a “Yes” Tomorrow

“My wife and I have three children, ages 6, 4, and 2. While they are still a little young for in-depth money lessons, we make a point to involve them in family finances and try to make talking about financial responsibility and independence a part of our daily life. This usually happens in a thousand little, ordinary ways. An instance that comes to mind is when my four-year-old son asked if we could go to a local pizza and games restaurant that he loves. I said no, but went on to explain to him that it costs a lot of money for our family to enjoy an evening there. I reminded him of our vacation in a few months and said we were saving up so that we can have a lot of fun on our trip. It was a good way to teach him about the important principle of delayed gratification and the lesson that sometimes you have to say ‘no’ to things you want now, to enjoy better things in the future.” —John Schmoll, Jr., Frugal Rules

2. Let Them Make Spending Mistakes

“From the time our children were three or four years old, we’ve given them opportunities to earn money by doing chores and projects. When we’re out shopping, they can bring their own money and spend it however they’d like (within reason!). Not only do they learn money management skills, but this helps prevent the ‘gimme’ attitude. If a child sees something they want and asks if we can buy it, I always respond, ‘Do you have enough money for it?’ It also gives them the chance to make money mistakes. They’ve learned valuable lessons when they’ve purchased cheap items that broke almost immediately, and we’ve had great discussions on how to make wise purchases. We’d much rather they made $3 mistakes when they are little to hopefully prevent some $3,000 and $30,000 mistakes down the road.” — Crystal Paine, MoneySavingMom, author of Say Goodbye to Survival Mode?

3. Show Them That Work is Rewarding

“’I get an M&M mama?’ my talkative toddler asks. I reply, ‘Yes, if you complete the job.’ Even at 2 1/2 years old, I’m attempting to lay financial foundations in my son’s life. At this age, he doesn’t care a thing in the world about real money, but when I break out the M&Ms he knows I mean business. That’s because chocolate is a special treat reserved for a reward. At this stage, candy talks, and I can teach my son about finances with food. He is learning that when he uses the potty, picks up after himself, or helps me with a chore, he is paid for his work in delicious, color-coated chocolate candies. He’s beginning to understand that hard work is rewarded. That’s a trait my parents instilled in me, and I desire to pass along. Cash and chore charts will eventually replace sweets, but until then, candy paychecks are perfectly fine by him. Coins just don’t taste as good.” — Kim Anderson, Thrifty Little Mom

4. Break Out the 24-Hour Rule

“I’m blown away that my teenage daughter still remembers going to the flea market together years ago and learning a cool buying lesson from her mom. (As all us moms know, this is a rare and exotic occurrence!) Though I liked a pair of earrings, I waited a day to think it over, knowing that they would likely still be there if I changed my mind. Sure enough, after a day of thinking about it, I realized they weren’t all that special and that I’d rather wait to get something that I loved. To this day, whenever my daughter and I are out shopping and can’t make a decision, we invoke the ’24 Hour Rule.’” —Beth Kobliner, author of the forthcoming book Make Your Kid a Money Genius (Even If You’re Not) and a member of the President’s Advisory Council on Financial Capability for Young Americans.

5. Connect Saving, Spending, and Giving From the Outset

“My wife and I have a four-year-old son, and we’re just now beginning to teach him the true value of money and how it is a tool to be used for different purposes. We’re doing that through the use of three money jars. When he earns money through little jobs we have given him, depending on the day he will put the money in one of three jars. One day for giving, one for saving, and one for spending. On the last day of the week he can choose which jar to put his money in. He can never buy anything unless he has the money available in the spending jar. He also sees importance of saving for the future, and the joy of giving to others. It’s truly a joy to see when the ideas of giving and saving start to register, and it’s so fun to see the smile on his little face when he’s giving to our church, or to a friend through his giving jar. — Peter Anderson, Bible Money Matters

“Our kids are still very young, but at ages 3, 5, and 6 we’re doing our best to teach them the importance of spending, saving, and giving. Last summer, we made piggy banks as a family, and each child has three in their bedroom. One for saving, one for spending, and one for donating. Anytime they make money at a lemonade stand or receive birthday money, they split it up equally among their three jars. It’s not a huge act, but it does start the process at a young age that it’s okay to spend some of your money, as long as you’re giving back to others and saving as well.” — Anna Luther, My Life and Kids

6. Show Them the Price—and the Path

“We have young kids, but we’ve started occasionally working with our five-year-old daughter, Kate. One day while shopping with us she discovered My Little Ponies and asked if she could have one. We explained that we were planning on using our money for other things right now (a phrase we prefer to ‘we can’t afford it’). We shared with her that we would love to help her earn the money to buy it herself. We told her to write down the price and start saving money for it. Over the next couple of weeks we gave her little odd jobs to do around the house to earn the money, quarters and dimes at a time. She worked hard until she’d saved enough. Then we went to the store, and she got to buy her pony. She was so proud. It was a great lesson in money math, delayed gratification, and the power of saving.” — Philip Taylor, PT Money

7. Talk About Debt, Too

“My two boys aren’t quite old enough for serious money lessons yet, but one thing I’m excited to teach them early on is the importance of smartly managing debt. If they want to buy something on their own, like a toy, they’ll have three choices: 1) Buy it now, 2) Save to buy it later, or 3) Borrow money from us. If they choose to borrow, they’ll have payment terms and interest just like a regular loan. My hope is that they can learn the consequences of debt, both good and bad, before it has any real-world implications for them and without the lectures and scare tactics. Then they’ll have the skills and experience to make smarter choices once they’re out on their own.” — Matt Becker, Mom and Dad Money

8. Make Them Work for Wants

“A key factor in reaching financial independence is what you spend. Some spending is needed and necessary. But it’s the ‘wants’ that can get people in trouble. Therefore, when our kids ask for a non-essential item, we reply with a two-step plan: 1. First, wait a week. If you still want it, we’ll get it then (most times the ‘want’ goes away by the end of the first day); 2. If you still want it after the week passes, you have to work around the house to earn half of the purchase price—even if you have enough in savings to pay for it. The second step forces them to think if the amount of work required to purchase the item is worth it to them. If they follow through with the required work, then we know that they’re serious about the purchase, rather than just expressing a fleeting, short-term desire.Several times the “acquiring of money to pay for the thing” becomes almost exciting as the actual purchase.” — Kevin McKinley, On Your Money

More on helping your kids become financially independent:

 

 

MONEY early retirement

4 Secrets of Financial Freedom

140701_HO_FinancialIndependence_1
Feng Yu—Alamy

You can shorten the path to early retirement if you start with the right strategies.

Ever since I retired at age 50, I’m often asked how I managed to reach financial security. Looking back, I see that the key factors fall into four categories—family support, career choice, money management, and personal habits and attitudes. Here’s how you can use these building blocks to reach your goals.

Start from a Strong Foundation
Some of us were fortunate to start out in families that instilled integrity, prudence, and hard work. If that’s your experience, you can be grateful. But, if not, then it’s still within your power to cultivate those qualities now. Not only will that create the conditions for your own financial success, but it will benefit everyone around you as well.

Throughout you will need patience. Typically the personal and financial decisions that will pay off in the long run require sacrificing a little today. Patience helps you live with the reality that true rewards usually require some short-term discomfort.

Choose a Career Wisely
Your choice of career is one of the most important decisions you’ll ever make. You need to love your work if you want to be great and prosper from it. So pay attention not only to your gifts, but to what makes you enthusiastic about getting up in the morning. Then, find a career path that plays to those strengths.

If you’re just starting out, and it suits you, a high-paying career in a technical or professional field will clearly advance your cause. Competence in math or technology can be a first-class ticket to building wealth. But, if that’s not possible, at least be aware of the financial implications of your college education and early career choices. A graduate in an esoteric major with five digits of student debt starts out life doubly handicapped. You can pursue your passions, integrate them with a professional track, and stay out of significant debt—but only if you make informed choices.

If you’re already in a career, look for mentors and other professional relationships that complement your skills and personality. Having been on both sides of the equation now, I can tell you that older, more experienced people generally enjoy counseling a talented and enthusiastic newcomer. It’s a relationship that pays dividends on both sides. So be open to wisdom when it’s offered. You don’t have to take every piece of advice, but it can be your starting point.

Learn to Manage Money
You might start out with a great family foundation. You might have a high-paying career that you love. But unless you live on less than you make, it won’t put you any closer to financial freedom. In fact, if you develop expensive tastes in houses and cars, and need to look as affluent as your neighbor, you could wind up worse off financially—no matter how much you make. You can start heading in the right direction by simply tracking your expenses, as well as learning about saving and budgeting. Identify the few areas where money spent truly pays off in better quality of life for your core interests. Spend there, and cut back everywhere else.

Next, find a mentor to help you become a confident investor. You need to master any fear of stocks, so you can profit from them in the long run. Offset the risk of stocks by allocating into other asset classes as well. Start small and carefully, but do start. Learn and abide by a few bedrock investing principles: diversification, patience, simplicity, low expenses. Track your net worth and your overall portfolio return each year, so you know what direction you’re going, and why.

Related: Find the right mix of stocks and bonds

Once your career and finances are on track, you can explore more entrepreneurial paths for wealth building—perhaps by owning a small business or real estate. These can leverage your time and money, getting you to financial independence years earlier. They can be fun and rewarding too!

Keep Your Perspective
Even with all these potent ingredients for success, be sure to take life one day at a time. Again, cultivate patience. You’ll need it for the long stretches.

Remember the goal—financial independence —but don’t obsess on it. Don’t sacrifice the present for the future; it won’t turn out as planned anyway. Make time for your loved ones and meaningful activities, even if you must work longer in the end. As great as it is to achieve financial freedom and retire early, you don’t want to arrive there having missed out on life along the way.

Darrow Kirkpatrick is a software engineer and author who lived frugally, invested successfully, and retired in 2011 at age 50. He writes regularly about saving, investing and retiring on his blog CanIRetireYet.com. This column appears monthly.

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