When I was 11 our family moved from Southern California to Toronto, Canada. My dad was promoted to run the new Canadian division of the defense contracting firm he worked for. There were 10 kids in our family at the time so moving was a huge project.
My dad was a highly organized production manager so he put his skills to work preparing for our move. I remember carefully boxing all my clothes and possessions under his watchful eye. He insisted that every box be filled to absolute capacity. The boxes were then weighed, labelled, and sorted by size so the truck could be packed as tightly as possible. Watching him put it all together was a great education. We teased him a little, especially when he would ask for a box or item perhaps the size of a toothbrush, to fill a small gap. He said, “If you want any project to end well the most important thing is to start well.” He let us know that if the early packing was sloppy, we would never be able to fix it at the end.
I still have a picture of me holding the very last item, my very thin hoola hoop, and trying to fit it in the back of the truck just before closing the sliding door. There wasn’t an inch to spare. My Dad’s careful packing paid off in two ways. We were able to bring all our belongings, and when we arrived in Canada four days later everything was still in excellent condition because it was packed so tightly.
The principles that lead to a well-packed moving truck apply just as well to building a proper retirement account. If your early saving years are sloppy or careless, then it becomes very difficult in later years to clean up the mess. It is hard to retire well if you start poorly. In fact, I don’t know if I’ve ever seen it happen. At the same time those who start early and are careful with their finances, are able to build a solid portfolio that holds together during that lifelong trip. A modern-day example might be the famous Warren Buffet. People view him as one of the worlds smartest investors. What I see in him is a guy who started buying stocks methodically at age 11 and never stopped. Yes, he made some smart moves along the way but the smartest thing he did was get off to a good start.
I have watched young investors, even some of my kids, follow the path of Mr. Buffet. Because of their good start and consistent practices, I have no doubt that one day people will look at them and say, “Oh what great investors they have been.” But the truth of it is they got off to a good start and they are sticking with it. Next week I will go into more detail about what a good start in retirement savings looks like.