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[ss_lemonade]

So I have zero experience when it comes to investing and stuff but would love to look into this. I was wondering though: how young is young exactly when they say, "start young/early"? I'm 28 right now and married so hopefully that isn't a problem. Also, the only debts we have at the moment are from 2 car loans (luckily, no student debts to worry about for that both of us)

 

[Walter White Walker]

So I have zero experience when it comes to investing and stuff but would love to look into this. I was wondering though: how young is young exactly when they say, "start young/early"? I'm 28 right now and married so hopefully that isn't a problem. Also, the only debts we have at the moment are from 2 car loans (luckily, no student debts to worry about for that both of us)

As young as you can, but 28 is fine. That gives you decades to take advantage of compounding returns. Starting even earlier would of been great but there's nothing you can do about that now, so get going on it today.

 

[Randolph Freelander]

More short-medium term investing questions.

I plan on starting to look to buy a house in 4-5 years. All of my non-retirement savings is currently just sitting in a chequing account (besides some small allocation in company stock buys and RSUs). I'd like to get a better return on my money than what my bank account is currently giving me (0.08% or something I believe), but looking at even high interest savings accounts, the returns seem pretty piddly (1% or so). I'd rather not put the money into equities as the term seems too short to live through any ups and downs in the market, so I was looking at bond funds. The returns seem decent enough, but the stock price (VBTLX in this case) seems to be all over the place. I assume a good portion of the return is coming from dividends and not the stock price? With that in mind, how can I calculate the rolling average annual return over a 4-5 year period? I'd like to smooth out the bumps and get a sense of the volatility over my time horizon and a better sense of what the return rate might be.

I would find it hard to sit on money for 5 years and let it do nothing. I searched for some resources (admittedly, not for very long) and I came across this article that would suggest being 50% bonds 5 years out and ratchet up that percentage as you grow closer to your goal.

#1: Starting from $0 to save $50,000 in five years
Let’s say you’re saving for a personal goal like a down payment on a house or adopting a child. You’d like to save $50,000 over the next five years—and you definitely need it around a precise date. When you get started with your five-year goal, we advise an allocation 50 percent bonds. As you move closer to your goal, our advice for your allocation will grow increasingly conservative.

Just applying some numbers, you might start at 50 at 5 years out, 62.5 at 4, 75 at 3, 87.5 at 2, and finally 100% bonds 1 year out from your goal. This would allow you to get some growth from equities but limit your downside if things go south as you approach your target date.

If you're into that, look for funds like VTSMX (stocks) and VBMFX (bonds) from Vanguard or the similar options from Fidelity (and also their admiral/advantage class equivalents if you have enough to invest to get even lower overhead).

 

[egruntz]

So I've been with my employer for a year now, and I suppose that means I'm eligible for their retirement plan. We had a meeting to go over it, but honestly I'm not understanding everything. Can I go over my circumstances with you guys for advice?

I guess my company offers a 5% Pension. I can also defer payment from my paychecks toward a 401(k) plan. I can contribute as much as $18K per year (which isn't likely), and my company will match up to 3% of my contribution. I was told that the 5% Pension and the 3% are both Traditional accounts, and that I have the option of making my own deferments Traditional or Roth. I know that Traditional doesn't tax you now but will later, and that Roth taxes you now but won't later, but I don't understand why that matters or what's better. In the end, will the amount of money taxed be the same? That's what I don't get.

Also something about vestments. I have to stick with my company for 6 years for me to get any money apparently? I don't know, they used a bucket analogy and I was like "Huh?"

Then they told me to pick a payment location. I have NO IDEA what that means and is what I'm most confused about. They started talking about aggressive plans and passive plans and I'm just like, what the hell is this?

Anyway, as far as questions go...:
1) I think it's smart to contribute 6%, at least, so that I get full benefit of their 3% matching. Should I make that Traditional or Roth, though?
2) Should I choose an aggressive or passive plan?

Thanks for the help... ;_;
If it helps for your advice, I make around $32K right now and am 21.

 

[tokkun]

So I've been with my employer for a year now, and I suppose that means I'm eligible for their retirement plan. We had a meeting to go over it, but honestly I'm not understanding everything. Can I go over my circumstances with you guys for advice?

I guess my company offers a 5% Pension. I can also defer payment from my paychecks toward a 401(k) plan. I can contribute as much as $18K per year (which isn't likely), and my company will match up to 3% of my contribution. I was told that the 5% Pension and the 3% are both Traditional accounts, and that I have the option of making my own deferments Traditional or Roth. I know that Traditional doesn't tax you now but will later, and that Roth taxes you now but won't later, but I don't understand why that matters or what's better. In the end, will the amount of money taxed be the same? That's what I don't get.

Also something about vestments. I have to stick with my company for 6 years for me to get any money apparently? I don't know, they used a bucket analogy and I was like "Huh?"

Then they told me to pick a payment location. I have NO IDEA what that means and is what I'm most confused about. They started talking about aggressive plans and passive plans and I'm just like, what the hell is this?

Anyway, as far as questions go...:
1) I think it's smart to contribute 6%, at least, so that I get full benefit of their 3% matching. Should I make that Traditional or Roth, though?
2) Should I choose an aggressive or passive plan?

Thanks for the help... ;_;
If it helps for your advice, I make around $32K right now and am 21.

Roth vs Traditional is a favorite debate around here.

The basic things to consider for someone in your situation are (in order of what I would consider most important to least):
- Are you able to save enough to get the full employer match? If not, pick Traditional.
- Do you think you will be paying a higher or lower tax rate in the future? If lower, pick Traditional. If higher pick Roth.
- Do you care about having the ability to withdraw funds from your 401k in an emergency? If so pick Roth.

For the second part of your question, I'm a little wary of the "aggressive" vs "passive" wording because they can refer to different things.

As a young person, you should choose a fund with "aggressive" rather than "conservative" stock/bond allocation.

However, as far as the funds go, you should choose a "passively managed" (a.k.a. index) fund over an "actively managed" one.

So what you want is a passive fund with an aggressive allocation.

 

[UraMallas]

I am thinking of taking myself out of the company match for my 401K. All told, it will save me about $100/month. They match 4% at my 5% contribution. I've overspent this Summer and I moved into my own apartment so money is getting kinda tight. I've put too much on my CCs to pay back and feel like I need to pay them down. I wanted to stop for at least 5 or 6 months whilst I get things under control. I'm 33 in November. I do not contribute to any other retirement plans and have about $12K in my retirement plans so far. Everything is vested.

Should I pull out or continue to buy for retirement? I could PROBABLY squeak by for the next 6 months but I might very well be close to miserable with no spending money.

 

[Husker86]

So if we say the average market return is 7%, you're getting somewhere in the neighborhood of ~90% return on your retirement contributions (because of match, and the market return on that match, added to your own contributions+market return).

No credit card interest rate is worse than that.

That aside (though that should be plenty) did you factor in the up front tax break you're getting (if it's not a Roth 401k)? That $100/month could only be costing you $80/month on your paycheck.

 

[UraMallas]

It is a Roth 401K. So, the idea is still that the money is better spent investing?

 

[Randolph Freelander]

I am thinking of taking myself out of the company match for my 401K. All told, it will save me about $100/month. They match 4% at my 5% contribution. I've overspent this Summer and I moved into my own apartment so money is getting kinda tight. I've put too much on my CCs to pay back and feel like I need to pay them down. I wanted to stop for at least 5 or 6 months whilst I get things under control. I'm 33 in November. I do not contribute to any other retirement plans and have about $12K in my retirement plans so far. Everything is vested.

Should I pull out or continue to buy for retirement? I could PROBABLY squeak by for the next 6 months but I might very well be close to miserable with no spending money.

Be miserable with no spending money.

You're getting 80% immediate return thanks to their match. I don't know what your credit card interest rate is, but it would have to be very high and compound for very long in order to overcome that return, not even mentioning typical market gains that would accrue. No, do not carry that credit card balance for very long, but of all your expenses, your 401K is not the one to cut.

It's time to face a stark reality. You're about to turn 33. You're behind where you need to be, and you're already not saving at the rate you need to be. Kicking the retirement can further down the road is not going to do you any favors, the hill gets steeper the longer you wait. Get your spending in order. Tread water if you have to, but save money, secure the match, and put yourself in position to start saving even more.

 

[mercenar1e]

Quick question.. I'm thinking of investing with Lending Club and I was wondering if anyone has experience with them? Just looking at different options here

 

[UraMallas]

Good man. It stays in place.

 

[Makai]

Quick question.. I'm thinking of investing with Lending Club and I was wondering if anyone has experience with them? Just looking at different options here

I have a friend who loves using them. Lets you choose the risk.

 

[chaosblade]

Lending Club looks like it's just buying other people's loans? Don't know that I'd rely on that for retirement.

 

[Piecake]

Quick question.. I'm thinking of investing with Lending Club and I was wondering if anyone has experience with them? Just looking at different options here

I havent used them, but I think I would put this in a category of 'fun money that you are willing to lose in order to make a big profit or, in this case, do some good'

Personally, I think it sounds rather interesting and I might have considering investing in it when I did have a fun money portion of my investments (I determined that picking stocks was not very fun at all)

 

[ZackieChan]

It's a long thread, so I figure it's easier to just ask - what do you guys recommend for someone who is self-employed? I'm just now making enough to start putting some away for retirement, but what do I use?

I just created a Schwab account, which has a bunch of different investment vehicles:
Individual 401K
SEP IRA
Roth IRA
SIMPLE IRA

Not sure which of these I should be doing (all of them?), so any help would be appreciated. I don't have a ton of cash to put in now, but my income should be rising steadily over the next few years.

 

[TangoAlphaLima]

It's a long thread, so I figure it's easier to just ask - what do you guys recommend for someone who is self-employed? I'm just now making enough to start putting some away for retirement, but what do I use?

I just created a Schwab account, which has a bunch of different investment vehicles:
Individual 401K
SEP IRA
Roth IRA
SIMPLE IRA

Not sure which of these I should be doing (all of them?), so any help would be appreciated. I don't have a ton of cash to put in now, but my income should be rising steadily over the next few years.

A Roth is super simple, as any individual can open one (provided you are under the income limit). Once you reach the max to put into it, then you can look into other options. Here's an article discussing those other options: http://www.obliviousinvestor.com/sep-vs-simple-vs-solo-401k/

 

[ZackieChan]

A Roth is super simple, as any individual can open one (provided you are under the income limit). Once you reach the max to put into it, then you can look into other options. Here's an article discussing those other options: http://www.obliviousinvestor.com/sep-vs-simple-vs-solo-401k/

Thanks for the link. That's super helpful!

Seems like he's saying that the Individual 401(k) is the best option. I'll read it more thoroughly later tonight.

 

[Wellington]

How are you tracking your progress?

My goal at the start of the year was to grow my net worth by X dollar amount (unimportant) and to have or surpass a specific dollar amount in my 401k retirement account. After the most recent downturn in the foreign markets, total dollar amount in my accounts dropped but now I am buying shares in both my retirement and non-retirement accounts in larger chunks.

Since I don't really plan on touching the money for a while it has led me to question if the amount of money in an investment account is the right way to measure how well (or not) I am doing. Theoretically I am doing better by virtue of being able to purchase more shares, right?

Edit: Maybe I am nuts. End of the day if you had 1000 shares of Lehman Brothers prior to 2008 you were doing pretty good... then not good at all.

 

[ZackieChan]

Do apps like Personal Capital track progress and project future earnings?

 

[Wellington]

Do apps like Personal Capital track progress and project future earnings?

Personal Capital tracks your net worth. I don't think it predicts future earnings.

 

[James Sawyer Ford]

How are you tracking your progress?

My goal at the start of the year was to grow my net worth by X dollar amount (unimportant) and to have or surpass a specific dollar amount in my 401k retirement account. After the most recent downturn in the foreign markets, total dollar amount in my accounts dropped but now I am buying shares in both my retirement and non-retirement accounts in larger chunks.

Since I don't really plan on touching the money for a while it has led me to question if the amount of money in an investment account is the right way to measure how well (or not) I am doing. Theoretically I am doing better by virtue of being able to purchase more shares, right?

Edit: Maybe I am nuts. End of the day if you had 1000 shares of Lehman Brothers prior to 2008 you were doing pretty good... then not good at all.

While you're still young, the best thing to focus on is savings rate rather than focusing on net worth goals. As your net worth grows, market volatility is going to have a much larger impact than your savings rate. You're going to have years where your net worth goes down even though you've contributed a year's worth of savings. It's a depressing thought, but at that point (hopefully) your gains will be much better than having stuck with just cash. So you have to accept the volatility. If there weren't months like these, there wouldn't be a risk premium for equities.

As for the Lehman comment -- that's precisely why you diversify and own index funds that invest in the entire market.

 

[teiresias]

This is sort of a tangential question, but since it affects my retirement saving I figured I'd inquire in here. I currently max out both my TSP (fed employee 401k) and my Roth IRA every year. Aside from my retirement accounts and my normal savings accounts I haven't done any non-retirement investing (ie. opening a regular brokerage account with Vanguard to complement my retirement Roth IRA that's there).

In any event, I recently bought my first house and used a good amount of my liquid savings for the down payment. Between furniture, some work on the house, etc. I haven't made a good start of building those liquid savings back up. I still have my six months expenses emergency fund (this was one metric by which I decided I had enough saved for a down payment, that it wouldn't drain my emergency fund below six months). However, I'm a bit uncomfortable with my non-retirement savings rate following the home purchase, and if something like the Heating/AC needs replacing I'd be eating into my emergency fund at this point.

Being a federal employee, my retirement funds are like any other federal employee under FERS. TSP, pension, Social Security, and in my case my Roth IRA, and running numbers it seems like I'm in no way going to be hurting during retirement, so I'm not sure stopping contributions is a big deal now, but as we all know, that is compounding interest that I'm losing out on that one never gets back.

I'm wondering if I should stop maxing my TSP to open up some cash for regular savings or not, at least temporarily. The other option I'm considering is just accepting the slower cash savings rate I have right now and keep maxing my retirement accounts, and keeping the option open of pulling Roth IRA contributions out if something drastic maintenance-wise happens in order to conserve my emergency fund. This would be a last resort.

Once the whole furniture/rug/window treatment/etc. buying spree is over my cash savings rate will return to normal, but it's just slow now, but I'm trying to ensure I'm not setting myself up to screw myself in the event of an emergency. Certainly doesn't help that there's the spectre of another governement shutdown at the end of the month, haha.

Opinions anyone?

 

[James Sawyer Ford]

I'd keep maxing out your tax sheltered accounts and slowly build up cash savings again. You already have a decent emergency fund, and you have the Roth IRA you could pull from in the case of an emergency as well.

You can't get the years of tax sheltering back, so I'd prioritize that.

 

[GhaleonEB]

How are you tracking your progress?

My goal at the start of the year was to grow my net worth by X dollar amount (unimportant) and to have or surpass a specific dollar amount in my 401k retirement account. After the most recent downturn in the foreign markets, total dollar amount in my accounts dropped but now I am buying shares in both my retirement and non-retirement accounts in larger chunks.

Since I don't really plan on touching the money for a while it has led me to question if the amount of money in an investment account is the right way to measure how well (or not) I am doing. Theoretically I am doing better by virtue of being able to purchase more shares, right?

Edit: Maybe I am nuts. End of the day if you had 1000 shares of Lehman Brothers prior to 2008 you were doing pretty good... then not good at all.

I keep it pretty simple, and rather than set yearly goals, I set a retirement goal and check in to see how I'm tracking to that. Quite a few years ago, I set a retirement goal X years down the road (at the time, ~20 years). And I tallied up what we were saving at the time, and put that into a spreadsheet. Then I just did a very simple compounding formula and dragged it down, so each row was one month of time, with one month of contributions adding in and growth going up each month. (I used an 8% annual rate.)

So it's a dead simple linear growth rate, with an assumed savings rate, that ends the year and month I want to retire with the amount I think I'll need. I then labeled each row with the month and year they represented. That's the 'line' I want my retirement savings to hug to, if not exceed. At the end of each quarter, I add up what I have (which I track monthly, but only do this comparison quarterly), and record that next to the target for that month. I can then tell whether I'm doing better or worse than my goal.

Over the years, the amount we've saved each month has gone up, and returns are obviously very lumpy, but I've left the projection file untouched. I figure, if I'm saving more that just means I'll be ahead of the curve. Right now I'm tracking to end a few years ahead of our retirement goal. So I can either retire early, or on schedule but with a bigger savings. Still a long ways to go, though, so we're just plugging away. (This year will be a less than awesome comparison point.)

 

[ZackieChan]

Personal Capital tracks your net worth. I don't think it predicts future earnings.

I'm thinking something that consistently does what those online investment calculators do. That would be super helpful.

 

[Y2Kev]

Related question: if I live with a roommate and provide for more than 50% of my own support as well as more than 50% of the upkeep of the home, can I claim head of household on my taxes or do I have to claim single?

 

[whatsinaname]

Related question: if I live with a roommate and provide for more than 50% of my own support as well as more than 50% of the upkeep of the home, can I claim head of household on my taxes or do I have to claim single?

Is your roommate related to you? If not, you cannot claim Head of Household.

If your roommate is related to you, they still need to meet certain criteria. (Search for "Qualifying Relative").

 

[Y2Kev]

Cool, thanks. I'm trying to do some basic tax planning. I have a 0 on my w-4 or whatever. I'm wondering if that is a bad move.

 

[teiresias]

Cool, thanks. I'm trying to do some basic tax planning. I have a 0 on my w-4 or whatever. I'm wondering if that is a bad move.

You should at least be taking an exemption for yourself on your w-4 I'd think and not have zero. In any case, the worst case is you're having too much withheld and will get a bigger refund at the end of the year, but that's money sitting in the IRS coffers and not in an account growing interest for yourself.

 

[whatsinaname]

Cool, thanks. I'm trying to do some basic tax planning. I have a 0 on my w-4 or whatever. I'm wondering if that is a bad move.

You should do at least one. As you might have seen in various advice in this thread, getting even a few months effective head start by putting that money into a fund can compound a lot.

Two should also be ok but I don't do that because my annual bonus is usually very variable.

 

[SummitAve]

How significant of a difference is 0 to 1? Pretty sure I still have 0 claimed as well. I just never wanted to owe anything...

 

[ZackieChan]

How significant of a difference is 0 to 1? Pretty sure I still have 0 claimed as well. I just never wanted to owe anything...

You're gonna pay what you owe one way or another, it's just a question of when you do it. 0, 1, 2...it's all the same, but with lower numbers it allows you to have the money rather than giving the gov't a short-term loan.

 

[Y2Kev]

OK I updated to 1 allowance.

 

[whatsinaname]

How significant of a difference is 0 to 1? Pretty sure I still have 0 claimed as well. I just never wanted to owe anything...

Here's a table I found online.

At median income, that means an additional $70/month you can start saving/investing in January instead of receiving an extra return of $800 at the end of the year.

 

[Taco_Human]

Gonna paste my post from the million dollars thread I thought I put here originally.

"So I've been reading the OP, and Vanguard seems like what is being recommended so far.

If I'm already broke, is there a way to start already with...I dunno, a couple hundred?

I'm taking my time and trying to learn what all the terms I don't know mean, and it's confusing but I'm trying. Also posting here to sub to the thread. I'll be asking for more advice soon."

Subbing.

 

[Wellington]

Gonna paste my post from the million dollars thread I thought I put here originally.

"So I've been reading the OP, and Vanguard seems like what is being recommended so far.

If I'm already broke, is there a way to start already with...I dunno, a couple hundred?

I'm taking my time and trying to learn what all the terms I don't know mean, and it's confusing but I'm trying. Also posting here to sub to the thread. I'll be asking for more advice soon."

Subbing.

Yeah you can buy the total stock market or large cap ETFs rather than the index funds.

I keep it pretty simple, and rather than set yearly goals, I set a retirement goal and check in to see how I'm tracking to that. Quite a few years ago, I set a retirement goal X years down the road (at the time, ~20 years). And I tallied up what we were saving at the time, and put that into a spreadsheet. Then I just did a very simple compounding formula and dragged it down, so each row was one month of time, with one month of contributions adding in and growth going up each month. (I used an 8% annual rate.)

So it's a dead simple linear growth rate, with an assumed savings rate, that ends the year and month I want to retire with the amount I think I'll need. I then labeled each row with the month and year they represented. That's the 'line' I want my retirement savings to hug to, if not exceed. At the end of each quarter, I add up what I have (which I track monthly, but only do this comparison quarterly), and record that next to the target for that month. I can then tell whether I'm doing better or worse than my goal.

Over the years, the amount we've saved each month has gone up, and returns are obviously very lumpy, but I've left the projection file untouched. I figure, if I'm saving more that just means I'll be ahead of the curve. Right now I'm tracking to end a few years ahead of our retirement goal. So I can either retire early, or on schedule but with a bigger savings. Still a long ways to go, though, so we're just plugging away. (This year will be a less than awesome comparison point.)

That sounds awesome thanks for sharing. Have you been saving more aggressively than you had previously set out? That's a huge boost if you do it early enough in the game. Can't wait to mess with my spreadsheets now.

 

[TangoAlphaLima]

Gonna paste my post from the million dollars thread I thought I put here originally.

"So I've been reading the OP, and Vanguard seems like what is being recommended so far.

If I'm already broke, is there a way to start already with...I dunno, a couple hundred?

I'm taking my time and trying to learn what all the terms I don't know mean, and it's confusing but I'm trying. Also posting here to sub to the thread. I'll be asking for more advice soon."

Subbing.

If you're broke, then you need to get your finances in order first. Do a written budget to keep track of expenses and control spending. Build yourself an emergency fund of 3 to 6 months of expenses. Only then should you be looking into investing any additional money you have.

 

[GhaleonEB]

That sounds awesome thanks for sharing. Have you been saving more aggressively than you had previously set out? That's a huge boost if you do it early enough in the game. Can't wait to mess with my spreadsheets now.

We were saving pretty close to target until two years ago, when I got a promotion that translated to a ~20% raise. We put about 3/4 of the raise toward retirement, and so have been outpacing it since. Right now we're a little ahead of where we are 'scheduled' to be, but if we keep the trend up, I should be able to retire 3-5 years earlier, or a fair bit more comfortably. I feel very lucky.

But I'm only 38, so I'm not banking on anything just yet. It's still pretty small numbers compared to where we need to be; we're counting on that hokey stick at the end.

 

[PantherLotus]

Why is it such a pain in the ass to roll up old 401s into new ones? And they can't do it online?

Here's what I have to do:

1. call new 401k provider to find out how to do it

2. get new 401k mailing address so i can mail them a check. A CHECK.

3. call old 401k provider to issue check and mail it to me

4. talk with my HR to sign off on the rollover, they have to sign something and mail it to me

5. put those things together and mail them to the new provider

I've already forgotten half the steps and all I want to do is press a button. What a pain in the ass.

(the good news is I forgot about this account and it's been doing nicely on its own!)
(i want to roll these up to eliminate extra fees)

 

[Gawge]

I'm contributing 2.5%, my employer is contributing 7%. Is that a good deal?

I signed up when I started this job 7 months ago or so, because a few people I asked said it was a good deal and it's auto-enrol, so i'd have had to opt-out. I'm 22 though, feels a waste in some way? (UK).

 

[Husker86]

I'm contributing 2.5%, my employer is contributing 7%. Is that a good deal?

I signed up when I started this job 7 months ago or so, because a few people I asked said it was a good deal and it's auto-enrol, so i'd have had to opt-out. I'm 22 though, feels a waste in some way? (UK).

How does getting 7% of your salary as free money towards investing in your retirement feel like a waste? And yes, that's a very good matching contribution.

 

[RumblingRosco]

-

 

[Gawge]

How does getting 7% of your salary as free money towards investing in your retirement feel like a waste? And yes, that's a very good matching contribution.

That's not a waste. You're getting a "free" 7% raise as long as you invest 2.5% of your money. That's a great deal. Most people will never get a retirement benefit as good as you have it. Don't opt-out unless you're literally starving to death right now and can't make any cuts in your disposable income. Besides starving or being unable to pay bills, there is no excuse to not take advantage of that employer contribution. I see this as a father-figure that is only a few years older than you, but you'd be acting like a dumb kid to not take advantage of that.

Cheers. Can only have the 2.5% for 3 years, then it goes up to 5%, but deal with that when it comes. I can afford it, was just wondering if it's wise, and it seems like it definitely is. Thanks all.

 

[Darren870]

How are you tracking your progress?

My goal at the start of the year was to grow my net worth by X dollar amount (unimportant) and to have or surpass a specific dollar amount in my 401k retirement account. After the most recent downturn in the foreign markets, total dollar amount in my accounts dropped but now I am buying shares in both my retirement and non-retirement accounts in larger chunks.

Since I don't really plan on touching the money for a while it has led me to question if the amount of money in an investment account is the right way to measure how well (or not) I am doing. Theoretically I am doing better by virtue of being able to purchase more shares, right?

Edit: Maybe I am nuts. End of the day if you had 1000 shares of Lehman Brothers prior to 2008 you were doing pretty good... then not good at all.

I keep track of three things:

1. How much I am putting into retirement, and how much I want it to be at the end of the year.
2. How much I am saving outside of retirement and investing in my non retirement portfolio.
3. How much extra income I am making outside of my normal work.
4. How much I am spending

I look into ways to increase all of these, and have a figure for each that I want to hit at the end of the tax year. Increasing #3 helps with increasing the other two obviously. I put 10% of my work income into retirement, so I don't contribute much more at this point. Due to tax issues. Otherwise its mostly #2 which is paying my mortgage early, non retirement funds etc etc. For #4 I'm not strict, but keep track just so I know where my money is going and how much I am spending in general.

I probably look at all the numbers once a month. However, I am not super strict on anything. I do well for where I am in life. Could be better if I was smarter when I was younger, but it is what it is.

 

[Wellington]

I keep track of three things:

1. How much I am putting into retirement, and how much I want it to be at the end of the year.
2. How much I am saving outside of retirement and investing in my non retirement portfolio.
3. How much extra income I am making outside of my normal work.
4. How much I am spending

I look into ways to increase all of these, and have a figure for each that I want to hit at the end of the tax year. Increasing #3 helps with increasing the other two obviously. I put 10% of my work income into retirement, so I don't contribute much more at this point. Due to tax issues. Otherwise its mostly #2 which is paying my mortgage early, non retirement funds etc etc. For #4 I'm not strict, but keep track just so I know where my money is going and how much I am spending in general.

I probably look at all the numbers once a month. However, I am not super strict on anything. I do well for where I am in life. Could be better if I was smarter when I was younger, but it is what it is.

Thank you for your perspective. I think you're right in that it's more than just one pillar to get me to the end.

I especially need to pay attention to #s 2 and 4. I have gotten complacent due to maxing out the 401k and my company match being pretty decent - it's made me very lazy as far as maximizing every dollar in regards to both spending and investing.

 

[Darren870]

Thank you for your perspective. I think you're right in that it's more than just one pillar to get me to the end.

I especially need to pay attention to #s 2 and 4. I have gotten complacent due to maxing out the 401k and my company match being pretty decent - it's made me very lazy as far as maximizing every dollar in regards to both spending and investing.

There is also another aspect of it, such as paying yourself. MMM touches on it a lot, but I do like the general idea.

Its more about saving I suppose but things like you need to get to work everyday. For me a yearly train ticket is $1500. Instead I spent $300 on a push bike and that's $1200 extra in my pocket.

Things like that are a great way to save money and reinvest back into yourself.

 

[Austriacus]

Hey guys i have a question, i see theres some posts about other countries apart from the USA, what i was wondering is if someone knows of a way to invest in index funds as a South American, specifically Peru. Im kinda ashamed of asking this since i feel the answer might be very easy to find but my google fu isnt helping me

 

[Piecake]

Hey guys i have a question, i see theres some posts about other countries apart from the USA, what i was wondering is if someone knows of a way to invest in index funds as a South American, specifically Peru. Im kinda ashamed of asking this since i feel the answer might be very easy to find but my google fu isnt helping me

That definitely is not a stupid question. As for specifics, I really have no idea. Do you know any online brokers that do business in Peru? I would google that first, and then see if those online brokers offer index funds.

If that doesnt work, I would go to a bank or a financial adviser for help.

 

[Austriacus]

That definitely is not a stupid question. As for specifics, I really have no idea. Do you know any online brokers that do business in Peru? I would google that first, and then see if those online brokers offer index funds.

If that doesnt work, I would go to a bank or a financial adviser for help.

It seems tdameritrade and interactive brokers are available in my region, are these two any good?

 

[Piecake]

It seems tdameritrade and interactive brokers are available in my region, are these two any good?

I honestly couldnt tell you since it probably varies by region drastically due to competition, regulation, scale of the financial sector, etc. I know the costs of Vanguard funds in the US compared to Canada and England vary pretty significantly.

I've never heard of interactive brokers, but I have heard of tdameritrade, so there is that. I just looked up Interactive brokers, and it seems like a legit company at least. What you should be looking out for is how much it costs to open an account, how much it costs to maintain that account, how expensive are their offered funds, and whether or not they offer index funds. That will require a bit of research on your part, but should be a good indicator of whether or not a broker is good or not.