Procrastination, Anyone?

“Calvin: Today at school, I tried to decide whether to cheat on my test or not. I wondered, is it better to do the right thing and fail … or is it better to do the wrong thing and succeed? On the one hand, undeserved success gives no satisfaction … but on the other hand, well-deserved failure gives no satisfaction either. Of course, most everybody cheats some time or other. People always bend the rules if they think they can get away with it. Then again, that doesn’t justify my cheating. Then I thought, look, cheating on one little test isn’t such a big deal. It doesn’t hurt anyone. But then I wondered if I was just rationalizing my unwillingness to accept the consequence of not studying. Still, in the real world, people care about success, not principles. Then again, maybe that’s why the world is such a mess. What a dilemma!
Hobbes: So what did you decide?
Calvin: Nothing. I ran out of time and I had to turn in a blank paper.
Bill Watterson, Calvin and Hobbes

[ Day 46 of 2000 ]

As a new immigrant, I had my concerns about the 401(K) program. First of all, I didn’t know too much about it. With all the other things going on – getting a credit card, getting a license, settling into a new position at work, that was on the back burner. Our plans at that time was to go back in a couple of years (mainly because I thought we would have to work forever in this expensive country to be able to retire here). So if we contributed into the 401(K), and had to pay 10% penalty and taxes on it, was it worth it? But then my employer matched up to 6% of the pay. Did I want to waste that? I wasn’t eligible for the 401(K) program for the first few paychecks, that gave me time to make the decisions.

I wasn’t sure I was asking all the right questions, or thinking the right way. I decided to check with a couple of my friends who had been here for years. Surely they would have worked it out by now. They were going to return back to India too, they just were going to stay longer. So I asked one of my closest friends what he did about 401(K). He grinned sheepishly and admitted that he didn’t find out too much about it and had not started contributing to 401(K). I then asked about 3 or 4 more friends about it, and I got similar responses. A couple of them had started contributing towards it to get the employer match, but the rest hadn’t.

Now about these friends – we went to graduate school together at the top most institution in India. It is very hard to get into that place – we were ranked according to an all India entrance exam, and all of these people scored within the top 20 ranks. Indian population is over 4 times than that of USA. Most of the students who are good at studies try to become doctors or engineers, because those are the highest paying jobs. And it is much harder to make a living as anything else. Things are changing now, but this was the reality when we were studying.  To be among the top 20 in a country full of engineers clearly implies that they are intelligent, much better than the average.

I was earning six figures at that time, in Boston. All of these friends were in California, and earned much more than what I did – Anyone familiar with tech salaries know that salaries vary with location and Silicon Valley is at the top. And it is not a case of no-money-to-spare-due-to-high-living-costs – They were all dual income families, both of them earning much more than what I was earning.

It was clearly a case of procrastination – Life happens, and there are things you need to deal with. And there are other things you want to do. And there are things that would be nice to do. 401(k) didn’t make any of those lists and dropped out of their radar. They had all been here for 4-5 years at least, before I asked them the question.

I have seen many instances of procrastination getting in the way of what you want to achieve. Since we talk about money in this blog, the relevant ones I can think of are these –

  • Not making investment decisions
  • Not atually investing
  • Not paying bills and credit card on time
  • Not filing taxes on time

The only time I can see when procrastination can help is when the market is going down gradually. This is the S&P 500 plot I just grabbed from Google –

Take a look at that graph. Can you really afford to procrastinate?

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About BusyMom

Mom, Software Engineer, Dreamer - Can't wait to be less busy! . Please leave me any feedback you can think of. I am still learning and anything you can tell me about making this blog better is very much appreciated. .
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6 thoughts on “Procrastination, Anyone?

  1. I’m admittedly pretty good at procrastination in some things. For instance I had a small leak in the roof of my house for years. It would only leak once or twice a year when the rain came at a certain angle, and it wasn’t very much of a leek, but a leak nonetheless. I kept delaying getting it fixed or getting a new roof just because I didn’t feel like dealing with contractors. I hate dealing with contractors. I finally got a new roof a couple months ago, but the saga dragged on for a while.

    1. Oh, I give in to procrastination too… We have a guest bedroom that I am ignoring because I don’t like the wallpaper. I was going to remove it myself, but it has been close to three years now. When we bought the house and I mentioned this to a colleague, he told me that they have one they have been ignoring for 17 years. And I promised myself I wouldn’t do that. Looks like I am well on the path to it… When it comes to money, I am slightly better.

  2. Procastination definitely get’s the best of everyone at some time or another. Personal finance is probably the only category in my life where I never procastinate thankfully! I would say this, you should always contribute into your 401(k) EVEN when the market is going down because then you are buying securities at a discount price!

    Thanks for the share!

    1. Me too. I since found out that I had to contribute as much as I could to 401(k), and we have been maxing it out every year. I don’t want to miss the 6% match, and I am pretty sure my tax rate is going to go down in retirement. Don’t want to miss out on that either.

  3. Good for you for maxing out your 401k and doing that research! It’s a free 100 percent return! What could be better than free money? If you’re in tech, have you checked out your ESPP (15 percent off is pretty good too, esp if you can sell right away), or RSUs? Also, have you done your backdoor Roth or asked your company about the mega backdoor Roth (HR knows it better as after-tax contributions)? If you also do software consulting on the side, you can have a i401k with a contribution up to 54k a year (it’s higher in 2018). All the tax advantages are pretty fun to figure out.

    Are you going back to India? I have a few intl friends who are curious what happens if they go back to their home country but have been using US based retirement accounts. Have you done research on this?

    1. Both of us work for privately owned companies,so no ESPPs or RSUs. I got them at my last job. Not any more… We don’t do any consulting. I am thinking of learning everything about WordPress and all this year, mostly for my blog, may be I can turn that into a side hustle of some kind.

      About India, we are probably not going back. We can retire right now if we were to go back. But you never know. If there is one thing life has taught me, it is that I can only make the plans – I can’t make it happen. We were settled down there, trying for early retirement, with no plans to come here. A few years later, we are thinking of living here forever.

      Social security benefits depend on the treaties between countries. I think, for India, we will get it even if we move back, provided we have the 40 credits. We don’t have it yet, will get there in 2023. But that would put us in the highest income bracket, and we wouldn’t get a lot. Didn’t actually look at 401(k), but my guess is that it won’t be a problem. No idea about HSAs etc.

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