10 things I know at 40 that I wish I'd known at 20

This post comes from partner blog The Dough Roller.

The best thing about being 40 is having survived your 20s and 30s. And at 40, I'm considered an old-timer in the personal-finance blogging community. Reflecting back on the past 20 years, I realize that I've learned a thing or two that I wish (oh, how I wish) I had known when I was 20.

Here they are, in no particular order:

School loans are like a bad date -- easy to get, but hard to get rid of. At 40, I still have more than $20,000 in school loans. Education is important, but I spent far more money during school than I needed to spend.

Compounding, like the 1970s Big Red Machine, is pure magic. Assuming you retire at 65 and earn a 10% return on your investments, $1 invested when you're 20 will be worth 2.5 times more than $1 invested when you're 30, 6.5 times more than $1 invested when you're 40, and 18 times more than $1 invested when you're 50.

New cars, once bought, aren't new. I wish I could have back all the money we've spent on cars, particularly new cars. The cost just isn't worth the financial freedom you have to sacrifice.

Great fortunes are made from small investments. It's amazing to me how small monthly investments, given enough time, can grow into substantial wealth.

Investing, like children, shouldn't wait until you can afford it. If you can read this blog, then it's not too early to start investing. This makes me wish I had started investing in high school. Fifty dollars invested per month in high school earning 10% would be worth about $212,000 at retirement.

Financial shortcuts increase the time it takes to reach your goals. Ignore all the silly personal-finance books that promise great wealth in a short time with no risk. Investing isn't hard, but these promises are designed to sell books, not create lasting wealth.

My wife is more frugal than I am. If I had recognized that 20 years ago, I would have listened to her and not frittered away so much money on stupid stuff. Sorry, Mrs. Dough.

Unlike just about everything else in life, with investing you don't get what you pay for. My first few mutual funds were load funds with high expense ratios. I was so keen on picking the best performing funds that I completely lost sight of one of the most important factors when picking a fund -- cost.

Consumer debt is like swimming with an anchor. We now shun consumer debt, but it took us far too long to learn this lesson.

Having too much stuff robs you of happiness and wealth. I look around our house at all the stuff we've accumulated in 20 years and all I see is lost investing opportunities and clutter.

I wonder what I'll know at 60 that I'll wish I had known at 40.

Other articles of interest at The Dough Roller:

• How I overcame my fear of lending money on Prosper.com
• How college cost me $1.6 million
• Enter to win 3 great investing books by Richard A. Ferri, CFA