As soon as I got out of college, I did a curious thing. Before I took a job, or bought a car, or started my first company, I did something that none of my peers did: I retired.
No, that's not a typo. Looking back on it, I'm sure it was a sign of the times. As I was graduating, thousands of families across America were staring into the abyss of the financial crisis, having seen their life savings get wiped right off the face of their online bank accounts.
It was a dismal time to be graduating college and embarking on life's journey. Talk about bad timing.
And yet, a positive came of it. In the midst of the meltdown, my visceral reaction was to try avoiding the peril that so many poor families were in. So, I assessed what the future might hold for me when I get to retirement age -- that is, a Millennial retiree. Would social security still be available? Would pensions exist? Would real estate still be valuable? Did I need to hide my future net worth in gold bars, or perhaps in cash under my mattress?
Ultimately, I projected that we Millennials probably won't have safety nets like social security when we get to retirement age. Furthermore, although I saw the inherent volatility in stocks and real estate, I decided that my mattress was probably a poor choice for a long-term investment vehicle.
Most importantly though, in thinking through that process and considering the fate of the financial world, I figuratively retired -- as in, I put myself in the shoes of 65-year-old Peter and asked myself what needed to occur for me to avoid the financial apocalypse that so many were sadly enduring in 2008.
Retiring first turned out to be a fantastic strategy, now that I can look back on almost a decade of personal finance decisions. For instance, even now, I still drive the same Ford Escape I bought in 2008. I live in a small, low-mortgage, energy-efficient, 1,000 square foot home within ten miles from work (and I renovated the house upon moving in, providing instant equity). The good thing about starting out in a recession is that my IRA has grown significantly since I started investing the maximum deductible contribution in my first year of work. To complement the IRA, I hopped primary residences twice over the last few years as I've acquired rental properties. And I'm working on business number three in an attempt to diversify my portfolio even further.
Did all that retirement planning come with trade-offs? You bet. Many of my friends bought nice single-family homes and luxury cars while I was still driving my old Ford and living in a tiny apartment. But, on the flip side, I now have a variety of assets that give me confidence going into my 30s -- confidence that in 30 years, I'll be able to retire no matter what happens.
Most Millennials, and now Generation Z, aren't thinking that far ahead. But if you ask me, retiring first is the most important financial decision that young people can make. I've also found that if you throw a retirement party to kick off the plan, it becomes all the more fun.
Let's face it: when it comes to being able to retire, we should all be doing whatever it takes. You bring the savings, and I'll bring the balloons.