Ramsey’s advice is aimed at the majority of the population who don’t pay off credit cards each month. He’s serving financial literacy to them. He’s really not targeting the “I already make good decisions but want to split hairs between investment vehicles” crowd. Sadly, most people fall into the first group. Odds are, some in this thread are in the first group.
^This. It's psychological. It's like the difference in a diet, saying "just eat less calories bro", and a diet that helps people actually stick to it. It's not just about the math. If you're seeking out how to invest, you probably don't need the psychological help, that's for people who've indebted beyond their means.
I'll agree with this, especially the part about 99% of millionaire did it by such and such. I've never seen him actually admit that a million dollars isn't that much money these days. If you want to be conservative and be safe, his way is the way to go there. But I've leveraged a little debt to my advantage too, throughout the years.
A Roth IRA is a tax advantage account that is enabled by the government. They see the benefit of that account to be so great that they put a limit on the amount you can contribute each year. For 2024 the limit is $7000. If you contribute to that limit, you have maxed it out for the year.
Those are the things a good financial advisor will be the most help for you. Generally speaking, you should be putting at least 10% into tax deferred retirement accounts, including company match. If you do that & don’t go into retirement with any debts (including no mortgage), you should be fine for retirement. Then you can start looking at other financial goals.
I used to be. I was broke as a joke for many years. I am literally making 70k a year and had to use pawn shops sometimes at the end of the month. Dave is right absolutely about one thing. You have to get mad. You have to be sick and tired of being sick and tired.
A million dollars is enough to do two chicks at the same time.
The Republic of TX.....lot of great things about her but property taxes and homeowners insurance is not one of them.
As goofy as this sounds a Financial planner helps you build a plan....a financial plan based on the goals you define. This could relate to paying off debt, a plan for savings or investments, college funds, new house purchase, etc. They are similar to a coach. If you have decent financial chops and handle your money pretty good then you probably know most of what they could bring to the table. If you lack a little discipline developing the financial plan or sticking to it they can help keep you on track.
You need to talk to someone now regardless of age or financial health. You need to get a plan on your long term goals, your average hoped for return and willingness to gamble largely based on your age and time to retirement, and get a plan. At that point its up to you to follow the plan and start putting money in the account. At this point the advisors involvement is largely going to be based on your account balance and your age. If you're 35 you might not need to talk to your advice very few years, if you 55 you need to talk to him at least once per year, and if youre retired then you need to physically meet once per year and talk several times in between. The amount of return on a given fund or portfolio is based largely on the amount of risk. High returns generally mean high risk during down times. The advantage of an advisor is their ability to spread your money around to try and take advantage of the good times but avoid the bad.
4. EFTs
I suggest you make a second payment of a hundred bucks monthly to be applied to principal only. You will not miss the 100 and will reach 0 a few years sooner.
We should hit 16% this year and 20% next year. Getting daycare money back and will have no debts besides our house in a few months. Plan is to pay cash from here on out for cars and home improvements. Not really planning on attacking the house until later for some of the reasons many of you have stated, but it will get some attention in my 40s most likely.
Roth's are tax free when you withdraw and 401k's are tax free when you contribute. I have never understood the love for Roth's other than the ability to withdraw early.
If you go to a decent investment firm or wealth advisory firm or whatever you want to call it, they will provide the services of a certified financial planner "for free". At the very least, they will give you a long term plan that shows what your assets are projected to do based on different savings rates and risk profiles and also show a withdrawal plan for after you stop working. This will include some recommendations on what order to fund your accounts (e.g., how much to put in 401k versus roth versus non-tax advantaged accounts).
If you're just working and on cruise control building up a nest egg, it's not going to move the needle a ton. When you want to start making life changes (retire early, purchase a second home, buy a business, adopt a herd of giraffes... Whatever.) That's where planners help you run through the scenarios of when and how to make it happen.
There's a Roth 401k and a Roth IRA. The Roth 401k has a combined contribution limit with other 401ks ($23k). Like you said, it gets taxed in the front end and not the back, which is likely only going to be better for people withdrawing $100k a year or something from it.
To get by with 10% you really need to do it without fail for like 40 years. And even then you wouldn't be able to replace your income with a 5% real return. You'd replace around 50% of your income, count on social security for another 30-40%, and then count on expenses dropping.
You are crushing it early my man! Keep it up and you'll be mostly free in your 50s assuming you don't kill it earlier.
We ran a 5%+ and 6%+ deficit the last two years and there is not even a discussion of how we are going to fund SS and Medicare in the future.
Agreed. I prefer the taxable account over both a 529 and Roth. We can plan all we want and sometimes it works out, but if something unplanned comes up it's sure nice to have access to your money penalty free.
Just our luck. The politicians will finally figure out how to get elected by raising taxes on retirees when Gen X is in retirement.
Real danger to being a small generation. Baby boomers have essentially gone in dry on the rest of us. Once enough of them die off, there are more than enough millenials to turn around and 17 Gen X.
Are millennials capable of doing that? What if they “just can’t” on Election Day?
I'm praying they don't go after our 401ks or accumulated savings accounts with a " Wealth Tax".....you want to piss off people more than taking their guns go after their life savings.
