I've always assumed that everyone maxed their 401K's on matching, but upon asking many of my friends, I've been amazed at how many don't(even ones that work for Fortune 500 companies).
It's just stupid to not do it, unless tuition for your kids is the reason not, as whether you believe in the company or not, it's in essence free-rolling(as long as a non-tech nor start-up,etc..)
It's just stupid to not do it, unless tuition for your kids is the reason not, as whether you believe in the company or not, it's in essence free-rolling(as long as a non-tech nor start-up,etc..)
People should save as much as humanly possible. It isn't that hard -- the average two-earner family could squeeze out $ 500.00 a month just by taking a careful accounting of how much and where they spend their money, optimising tax returns and deductions, etc. $ 500.00 a month at a paltry 4% compounded becomes $ 33,259.99 after five years ... $ 73,870.32 after ten years ... $ 183,998.60 after twenty. That's chump change returning chump interest rates, and it still adds up to a nice sum over time.
There's no reason for poverty; only excuses.
Phaedrus
There's no reason for poverty; only excuses.
Phaedrus
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Sodium Pentethol V:
What is the point?
Particularly if you live in asia where you can get a whopping fraction of 1% on a savings account.<HR></BLOCKQUOTE>
I once had an Econ professor who challenged the Japanese on this one. If I recall (this was many years ago), his point was for an economy to grow the population has to spend. His view was that the Japanese savings rate was so high that it was stifling its economy. I think the quote was, "why do they insist on dying rich, you can't spend money from a grave." He then went on to bash Americans for our low savings rate.
What is the point?
Particularly if you live in asia where you can get a whopping fraction of 1% on a savings account.<HR></BLOCKQUOTE>
I once had an Econ professor who challenged the Japanese on this one. If I recall (this was many years ago), his point was for an economy to grow the population has to spend. His view was that the Japanese savings rate was so high that it was stifling its economy. I think the quote was, "why do they insist on dying rich, you can't spend money from a grave." He then went on to bash Americans for our low savings rate.
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Horseshoe:
I've always assumed that everyone maxed their 401K's on matching, but upon asking many of my friends, I've been amazed at how many don't(even ones that work for Fortune 500 companies).
It's just stupid to not do it, unless tuition for your kids is the reason not, as whether you believe in the company or not, it's in essence free-rolling(as long as a non-tech nor start-up,etc..)<HR></BLOCKQUOTE>
The Journal did a story on this a few days ago and the number of 25 year olds and others not maxing out on their 401ks was AMAZING!! I couldn't friggin wait to start socking that money away in my first job.
People don't realize but Generation X is phucked from a retirment standpoint. Meaning we do not have it nearly as good as our predessors. The 401K provides retirment flexibility if you leave your job but in the old days retirement money cost employees nothing since employers had defined benefit plans where they contributed for employees. Social Security appears to be up in the air. Now more than ever, we need to examine our financial health and make sure we are at least taking steps to ensure that we are not a burden to our children.
I've always assumed that everyone maxed their 401K's on matching, but upon asking many of my friends, I've been amazed at how many don't(even ones that work for Fortune 500 companies).
It's just stupid to not do it, unless tuition for your kids is the reason not, as whether you believe in the company or not, it's in essence free-rolling(as long as a non-tech nor start-up,etc..)<HR></BLOCKQUOTE>
The Journal did a story on this a few days ago and the number of 25 year olds and others not maxing out on their 401ks was AMAZING!! I couldn't friggin wait to start socking that money away in my first job.
People don't realize but Generation X is phucked from a retirment standpoint. Meaning we do not have it nearly as good as our predessors. The 401K provides retirment flexibility if you leave your job but in the old days retirement money cost employees nothing since employers had defined benefit plans where they contributed for employees. Social Security appears to be up in the air. Now more than ever, we need to examine our financial health and make sure we are at least taking steps to ensure that we are not a burden to our children.
Swami is right on, but I'd take it a step further. Social Security is worse than "up in the air". Anyone under age 40 should not count on 1 cent from Social Security. They have already increased the "retirement age" from 65 to 67 and will undoubtedly have to do so again. Social Security as it currently exists is nothing more than a government mandated Ponzi scheme. It worked great when first implemented 60+ years ago and for the first generation or 2 that retired with it. Population was increasing steadily so there were plenty of new employees pouring money into the system. Once the baby boomers retire, all hell will break loose because the number of people paying the social security tax will go way down, and the number of people receiving benfits will go way up. Combine this with people's longer life expectancies and the math just doesn't work at all, which is why Soc. Sec. is projected to be bankrupt in 12 to 13 years.
Like most things in life, you are better off planning for yourself than waiting/hoping for someone else to take care of things for you when you can't.
Like most things in life, you are better off planning for yourself than waiting/hoping for someone else to take care of things for you when you can't.
Pay yourself first (ie savings)
When doig your budgets SAVINGS should be included as an expense item. (Note: there is absolutely no reason to carry a credit card balance unless you have a 0% rate)
1. Max the 401K use the net after this as your base cash flow for spending
2. 1st discretionary spending should be $3K/yr for your roth IRA (you can do this and 401K).
BUdget the remaining discretionary between other spending and other investing
3. Set a budget for your living expenses vs other savings (college, travel, prepaying mortgage, term debt)
Including the above, my savings rate is approximately 20%-25% of the GROSS income for the year.
When doig your budgets SAVINGS should be included as an expense item. (Note: there is absolutely no reason to carry a credit card balance unless you have a 0% rate)
1. Max the 401K use the net after this as your base cash flow for spending
2. 1st discretionary spending should be $3K/yr for your roth IRA (you can do this and 401K).
BUdget the remaining discretionary between other spending and other investing
3. Set a budget for your living expenses vs other savings (college, travel, prepaying mortgage, term debt)
Including the above, my savings rate is approximately 20%-25% of the GROSS income for the year.
<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by King of the Road:
Swami is right on, but I'd take it a step further. Social Security is worse than "up in the air". Anyone under age 40 should not count on 1 cent from Social Security. They have already increased the "retirement age" from 65 to 67 and will undoubtedly have to do so again. Social Security as it currently exists is nothing more than a government mandated Ponzi scheme. It worked great when first implemented 60+ years ago and for the first generation or 2 that retired with it. Population was increasing steadily so there were plenty of new employees pouring money into the system. Once the baby boomers retire, all hell will break loose because the number of people paying the social security tax will go way down, and the number of people receiving benfits will go way up. Combine this with people's longer life expectancies and the math just doesn't work at all, which is why Soc. Sec. is projected to be bankrupt in 12 to 13 years.
Like most things in life, you are better off planning for yourself than waiting/hoping for someone else to take care of things for you when you can't.<HR></BLOCKQUOTE>
Bingo!!! I didn't want to get into it here but this is why I said SS is "up in the air."
At this point, I do not mind being taxed a bit to help those who are less fortunate than I BUT I wouldn't mind having my own fund where the government redirects a LARGE percentage of the SS tax they hit me with to an account that I can control and is earmarked for my use in retirement. Hell, at this point, I wouldn't mind it if they restricted the fund to certain investments to ensure I don't mismanage the funds.
Those boomers are going to make this debate VERY interesting in several years. Meanwhile, I'll pay my SS tax with no guarantee of a payoff...
Swami is right on, but I'd take it a step further. Social Security is worse than "up in the air". Anyone under age 40 should not count on 1 cent from Social Security. They have already increased the "retirement age" from 65 to 67 and will undoubtedly have to do so again. Social Security as it currently exists is nothing more than a government mandated Ponzi scheme. It worked great when first implemented 60+ years ago and for the first generation or 2 that retired with it. Population was increasing steadily so there were plenty of new employees pouring money into the system. Once the baby boomers retire, all hell will break loose because the number of people paying the social security tax will go way down, and the number of people receiving benfits will go way up. Combine this with people's longer life expectancies and the math just doesn't work at all, which is why Soc. Sec. is projected to be bankrupt in 12 to 13 years.
Like most things in life, you are better off planning for yourself than waiting/hoping for someone else to take care of things for you when you can't.<HR></BLOCKQUOTE>
Bingo!!! I didn't want to get into it here but this is why I said SS is "up in the air."
At this point, I do not mind being taxed a bit to help those who are less fortunate than I BUT I wouldn't mind having my own fund where the government redirects a LARGE percentage of the SS tax they hit me with to an account that I can control and is earmarked for my use in retirement. Hell, at this point, I wouldn't mind it if they restricted the fund to certain investments to ensure I don't mismanage the funds.
Those boomers are going to make this debate VERY interesting in several years. Meanwhile, I'll pay my SS tax with no guarantee of a payoff...
I think relying on anyone but yourself is foolish...there are many ways to make money legally and for yourself if you really want it...the only thing that concerns me personally is healthcare, the US needs to do more for its citizens when it comes to healthcare....
...... that is one thing you have to depend on for help!
...... that is one thing you have to depend on for help!
everyone is talking about socking away money in a 401K for a 8% return, 8% is not always the case. i think a 5% return would be a safer goal. then there is the good ol' SS, well for my generation, it won't be available at the retirement age of 67. spend you whole damn life working to enjoy about 10 years of it with no work. don't get me wrong if you like your job great, but i imagine just about everyone on this board could imagine doing something different other than their current job. whether it be traveling more time with the family, jerking off or what ever.
now.....if you would like to quit working for others, always answering to someone else, worry about saving 10-20% of you salary, invest in a business of you own, or real estate. let your ideas make you money and not someone else
just my 2c
now.....if you would like to quit working for others, always answering to someone else, worry about saving 10-20% of you salary, invest in a business of you own, or real estate. let your ideas make you money and not someone else
just my 2c
Jman, im a self employed convenience store owner, i have my store and business paid for, i own some real estate.. i like to invest in appreciating assets and try to pay cash for depreciating things..
No credit card debt, have 1 and if use it, pay off at end of month completely.. Pay cash for vehicles if possible.. I use other peoples money to buy real estate, banks money that is.... I keep money on a CD at various banks and run lines of credit againts it... currently borrowing money for a year at 4% on my credit line, CD earns a little interest so subtract that amount from 4% and you see, i can use money for under 3% per year.. It works like this, if i build a spec house for $80,000 and put it on market for $130,000 (which is normal in TN for 2000sqft house), i have a chance at $50,000 profit ( minus uncle sams part), if i can sell it in a year, if not then it only cost me my interest at years end, which is about $2400 on the $80,000 for a year.. Not bad, also buying $40,000 and under homes, putting a little work in them and shifting them back on market, all the while trying to put decent renters in them.. REAL ESTATE, my man.. it doesnt make everyone rich but almost everyone that is rich has quite a bit of it..
No credit card debt, have 1 and if use it, pay off at end of month completely.. Pay cash for vehicles if possible.. I use other peoples money to buy real estate, banks money that is.... I keep money on a CD at various banks and run lines of credit againts it... currently borrowing money for a year at 4% on my credit line, CD earns a little interest so subtract that amount from 4% and you see, i can use money for under 3% per year.. It works like this, if i build a spec house for $80,000 and put it on market for $130,000 (which is normal in TN for 2000sqft house), i have a chance at $50,000 profit ( minus uncle sams part), if i can sell it in a year, if not then it only cost me my interest at years end, which is about $2400 on the $80,000 for a year.. Not bad, also buying $40,000 and under homes, putting a little work in them and shifting them back on market, all the while trying to put decent renters in them.. REAL ESTATE, my man.. it doesnt make everyone rich but almost everyone that is rich has quite a bit of it..
Actually I personally know Dr. Danko Who wrote "The Millionaire next door". The proletarian secret is being a complete miser, in every capacity. However SSI, what you have stated is how money is made, far too many people get caught up into far more than they can afford, and forced to spend their lives as monitary slaves.
Dr.
Dr.
