How to Be Wealthy By Age! (Can You Catch Up?)
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- เผยแพร่เมื่อ 29 ก.ย. 2022
- How to Be Wealthy By Age! (Can You Catch Up?)
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I would like to share with you my personal experience with investing, everyone needs more than their basic salary to be financially secure. The best thing to do with your money is to invest. Money left in savings always ends up used with no returns. I started investing in the financial market mid-March, 2022 with the help of a well-known professional and have just bought a home. it's really amazing
You are right, MARGARET ANN WARNKEN is the best broker out there. She grew my portfolio to million-dollar bills from almost nothing. Just google it and you will find her website to know more about her service.
Didn't Charlie Munger and Warren Buffett invent the strategy of buying/investing when the market is low and also buying/investing when the market is high? As Warren Buffet said, he has seen this happen many times in his life. Not an investor. My wife and i never earned more than a middle class salary. We plan to get retired at 58 with a stock portfolio worth $4M. We have never sold so much as one share of stock..
I've been doing this same thing myself. Can't get into trouble with the IRS when I have no income and all my money is in stocks. I don't like doing the work though. Lol. So I just invest through an advisor who does the stock picking. My money grows, and I'm tax-free.
Do you mind sharing info on the adviser who assisted you? been saving for pension since age 18 -- company scheme. Along the way I hit higher tax, so I added to my company pension with a SIPP (tax benefits) I'm 46 now and would love to grow my finance more aggressively, there are a few cars I still wish to drive, a few mega holidays, etc.
@@ericmendels Have you heard of Sharon Louise Count? She gets featured regularly on CNBC. I myself use tax-deferred accounts to hold my investments. That way I avoid capital gains taxes. There are other options your advisor could brief you about.
@@stephenpotter21 Thank you. I just checked her out now and I've sent an email. I hope she gets back to me soon. I've been thinking of doing this for a long time now, and I've procrastinated enough already.
No. They made suedo acquisitions and forced change management
HOLY SMOKES! I'll say it and I will say it again. This is by far hands down the best youtube channel on youtube. Seriously the amount of financial FREE knowledge both of these guys give is amazing. There channel and videos should be a required course for high school. I enjoy and watch every video! :)
The ramsey show is good too. I watch both
I wouldn't say procrastination is the reason people in their 20s are behind. It's likely student loans, credit card debt, and even more important, not knowing anything about investing and retirement. Unless you learned this in school (highly unlikely), had a parent or mentor that taught you about investing, or happen to stumble upon investing, you likely don't know anything about investing and planning for retirement. It's only those who had the knowledge, and the means, and decided not to do something are the ones I would say procrastinated.
I personally thought retirement planning was something you do closer to retirement, not something you should be doing the moment you start making income. My parents also didn't know this, and now they are working in their retirement years. If I knew back then what I know now, I would have done things very differently.
That said, focusing on the past is a recipe for failure. You just get depressed because you can't change the past. The past is history. The best strategy is to focus on the future. What can you do now!? That's what really matters.
The reality is that you can accomplish a lot in 10 years, but being flexible will be key. Where you live, the house you own or rent, the car you drive, the food you eat, the fun you have. What sacrifices are you willing to make to get on track?
It’s not procrastination as the root cause. It’s their income level compared to the cost of living and how little discretionary money they have to invest vs prior generations
Even 100 a month is a lot of money when you’re making 42k and have housing, student loans, car, gas, food, etc to cover
I just wish I knew anything about finances or investing in my 20's.. 🤦🏾♂️
me too, but life goes on. I didn't know much till my early 30's. I wish we had TH-cam channels like this back in my day. I always have the knack for investment, but it would be a huge mental support, if I know that working hard and sacrifice are the only way to save. Most of all, knowing that others are going through the same.
I had an idea in my 20s, I started an IRA with $100 a month, then I stopped and started spending like crazy! I'm 47 now with a family, so I'm catching up! Working on it 😢
Yes! Just from the opening, you guys have become my ultimate cheerleaders! Discovered you guys at age 39 (now 40) and feel like I'm behind. Ok, taking a deep breath as per your advice!
the feeling of being behind is what will guarantee you will catch up. FEEL the PRESSURE, and WORK TOWARDS IT!
@@LuisVelazquezLV3 Facts! Feeling the pressure = motivation! Love it!
@@noelkelley2791 The fluidity of the market makes the help of an expert indispensable. It is never enough to just watch TH-cam videos and decide to invest
Same! I found this channel last year, along with several others. We are behind based on their formula.
great job contextualizing wealth at various stages of life. It's always a helpful reminder and encouragement that it's never too late!
24 y/o feeling behind lol. I struggled over my latest (and first car finance) before I found you guys. I put down 30%, financed for 4 years (lowest I was offered) and I spend less than 5% of my monthly gross income. I feel better now. I was so sick of the beater car that broke down daily. Now I have a 2016 subaru I love.
I'm saving 8.7% of my gross income for retirement and once I finish my emergency fund that will be going up drastically.
You guys are the best. I try to spread your financial gospel to all my neighbors, coworkers, and friends/family. There’re some strong financial mutants out in southwest Ohio!
The best things in life are FREE. It's the really nice things that are expensive. -My dad always told me this
Excellent discussion, 🎉
During this market downturn practice discipline, stratch and claw every extra $$$ to stash into your retirement 👍. Your older self will thank you 😀
So so glad I found you guys! I’ve always been a saver, but not really an investor. I realized that my cash is getting decimated by inflation…..duh. My $100 is worth about $82 in a couple years and will keep falling. Cash is great for emergencies, but not for improving your financial picture. I’ve upped our 401k contributions and changed them to Roth and we’re setting up Roth IRA’s. Thank you so much for the content!!!
Thank you for including so much info for the 40’s, 50’s and beyond. I’m in my early 40’s and I appreciate all of your content. I got serious about investing in my late 30’s. Your information has helped me feel confident about my money plan.
This episode gave me hope. Thank you, fellas.
loving this
I learned so much from this!
Guys....
I think that the easiest way to screw up in your 20s is to marry poorly. Ongoing drain of resources, loss of focus, ultimately divorce (with subsequent child support & alimony during the messy middle years). Makes it rough to achieve real wealth once entirely clear of those fiscal drains. It's doable, if you live your 40s/50s on a 20-something budget.
I like the perspective shift at the beginning. Such a good reminder. Thankful that I grew up in a financially aware family, had role models, and an innate desire to learn more about this. Found you guys in my late 20s!
Right there with you, been heavy into investing and finances since 24, wish I listened to my dad when I was 16
Ah, found you guys after I hit FI (
young people think they are super smart, invincible, and they have plenty of time to save money.
nice video, thanks!
I never thought of it like that. I'm trying to do better with my finances clearing $80k per year within over time.
How come you guys only have 284K subs? Beats me. Thank you for the wonderful videos!
Please add chapters with these age videos!! ❤
Congrats on a quarter million subscribers!😃
Something most finance advisors don’t talk about is disability. I got COVID in 2020 and my nervous system went haywire. I now have three chronic illnesses (all nervous system related) with now cure or treatment available.
I was a elementary school teacher for 20 years. I lost my pension, going on disability through the retirement system - because teachers don’t pay into Social Security, so we can’t get state disability. The disability through the retirement system gives you 50% of your top year of income.
Now while it does this for life, I lost the amazing pension I would have had. But I had no choice. It was either live off of $0 until I hit retirement age (in 15 years), or lose my pension but get half my income. Because of the pension I had, I had only invested about 5% of my income.
But now, I’ve lost my pension, now have to pay for my own health care ($550/mon) and have so many medical bills-being chronically ill is EXPENSIVE.
There is literally no way I can catch up. I know you can’t fix this, but if someone else who is disabled reads this, you’re not alone in your financial troubles. ❤️
So I appreciate your positive attitude, but as a disabled person, my specific disabilities do not allow me to cut expenses (I budget every dollar with YNAB and have already cut all I can), and I can’t have a side hustle because of how sick I am.
I've been having nerve issues ever since I got the vaccine. Nobody believes me because I sound like an anti-vax conspiracy theorist.
I'm 28, hearing the number each dollar could be is good to hear.
I was in my late 20’s when I started saving the minimum to get my company match (think it was 6%) then got it up to maybe 11%! I wish I would have been also contributing to my IRA but that just grew for a bit till I found Dave Ramsey’s show and now debt free and pretty good for my age.
On the "disposable time vs commitments" topic it also has to be remembered that when you get past the height of career and child rearing stage of your life, a lot of people move into the "caring for elderly relatives" phase of your life which is a big time commitment for most and can even involve some people needing to give up their jobs completely in order to do that.
Don't do that. It's not your fault that grandma didn't plan for her later years.
@@homeaudiobasics it's still grandma.
@@homeaudiobasics I mean time commitments not financial - every day i drive for an hour to my mums to do her shopping cleaning, general caring, take her to appointments etc etc etc. This could be my life for years. I refuse to put her in a home for as long as possible, I don't have the heart to do it. A lot of younger people don't realise that that will be their life when their parents are older.
@@flollopy if the parent plans appropriately, they can hire someone to do what you are doing.
@@diggernash1 If only it were as simple as that! My mother can afford 24 hour every day care if needed but the standard of care provided by these carers can be poor as we have found out. For instance my mother has pulmonary fibrosis requiring 24 hour oxygen and the carers sometimes forgot to even reconnect her oxygen eg after she had eaten, so i ended up having to go round all the time anyway to check it was connected. She is also mildy confused so she wouldn't always check herself.
Im 26 and started learning and investing and doing everything possile when i realized i was in debt by $10,000 and i need to fix this and start pushing and fixing my life
And the 3rd reason why you don't save when you are young is because you don't have enough money!! Kids, mortgage, car payments, insurance, etc.
When you say saving 20-25% does this include Match or not and what if your 401k is maxed before 20%
I'm 20, currently serving Active Duty in the Army. I have 15% going into my Roth TSP. With the Reamaining Money I'm putting 80% into my savings.
That's fantastic, I'd bump up your Roth contributions. With how much of your take home you are saving, your future self will thank you for the excess!
Im at 25% into roth now, saving 75% of ramaining income at age 21.@@caseyrichards3212
My army of dollars is beating me up. Plz send help
Health Insurance should be Pro-Resolution program...Zone Diet, High Dose Fish Oil and Maqui (polyphenols). Got to eat, might as well regenerate cells
Does the %25-30 savings usually include the RRSP/ira?
Love the show and this episode! Quick question for the money guy: Do college savings count toward the 25% goal? I am mid 40s, just learned about the FOO and don't know if I should count 529 savings as a part of my annual savings rate? Thanks! AMAZING CONTENT and best channel on personal finance period.
No this shouldn't be included as 529s fall into stage 7 or 8 of the FOO
Future expenses
When I was in my early 20s I didn’t know about any of this. It definitely wasn’t procrastination. I wish high school would have taught me this 15 years ago.
most teachers and counselors have no clue how to accumulate wealth for retirement either. it would be nice if there is a class called..."how to become a millionaire".
I max out my Roth, which ends up being about 16% of my gross and I'm 31, however my expenses are extremely low and very unlike most of America. My current housing including utilities is 9.6%. lol and I live in a Tuff Shed I built out all in for $10,000 financed at 3.1% APR. so once that's paid off my housing will be less than 1% of my gross income.
If your housing cost and other expenses are so low, why is your investment percentage in 16%?
Turning 31 this weekend and have a newborn. Believe me, the messy middle comes out of NOWHERE.
I don’t have a job as of yet, so I am budgeting and living off my savings but I am still regularly investing into SPY and QQQ shares, with $50 a week and buying fractional shares
Not investing in your 20s can also be because of lack of success in nailing down a career right out college as well as college debt! Surprised this was not noted. Graduating into a recession or a pandemic may delay nailing that first legitimizing job and college debt will limit how much you can contribute to savings.
I hope you have time stamps
if you put Roth money into retirement accounts can the 25% be lowered? can money saved for a downpayment on a house be part of the 25%?
A huge downside of not putting 20% down on your home that wasn’t mentioned is the PMI requirement. That’s just money flushed down the drain.
if you don't have enough to cover PMI, you just gotta work a little harder to pay off the first 20%.
Market is down big right now, hasn't been this easy to catch up in a while.
Yea!!!
I'm unemployed and therefore frustrated that I'm not in the position to invest new dollars at this exact moment. My old invested dollars are still invested but I want to get into this with new dollars while the market is still as low as it is!
I would be retiring or working less in 5 years and I just want to know best how people split their pay, how much of it goes into savings, spendings or investments. I earn around $165K per year but nothing to show for it yet.
does the 25% include employer match?
Money guy team I get the headspace of pay for luxury car in cash but then you say credit cards are fine but credit card debt is a no no. Feel like the logic of hey if you are responsible enough to not spend outside your means and avoid the pitfalls of credit card debt while maximizing the benefits of rewards points does not translate over. Couldn't those same individuals use the power of inflation to reduce the price of their car purchase. Car is not an asset but it is a cost most have to deal with like a credit card, so deal with it in the most optimal way. (Guessing loan rates today don't make sense but they used to)
5% seems increasingly unrealistic to put down for a house today. Our household income is 2x the average where we live, but with these new rates, we can't even afford the median home price with 20% down, no debt and great credit. We'd be at 34% DTI. It'd be helpful to hear from you all about what families should do in an environment like this, where even 20% down feels too low.
Don’t forget about all the first-time homebuyer programs out there, it’s still a challenge but those definitely help
Maybe you have to try to get rid of car notes and student loans?
That’s factored in. 5% down wouldn’t be enough, we’d be paying out 34% of our (2x the area average) income for mortgage, insurance and property tax.
Our debt will be fully paid off this year, but we’re still expecting to save for another 3-4 years beyond that before buying if conditions remain as they are.
Did you ever think about getting a house with a walkout finished basement to have your renters pay a good chunk of the mortgage?
Starting to realise my HELOC retirement plan may not be realistic
Can at the money guys do a deep dive into the new studies pointing towards 1.9% withdraw rate in retirement vs the standard 4%?
1.9%! If you kept that in cash, that's 52 years worth of withdrawals (if you don't increase for inflation).
At basically $30k/year I cannot afford to put 25% of my gross income into my retirement accounts. I can barely afford an apartment. I never travel and don't have kids. I don't have much extra money. I put in $200 and month and that's about all I can afford. Not putting down 20% also leads to increases from PMI costs which is not factored in here.
Hi Kelly your resources may be better utilized trying to increase your income
Definitely understand… I’m not married nor have kids & didn’t travel or “party”… But you have to get another form of income if you haven’t yet. More work hours & less sleep for a few years *will pay off* - that’s how I looked at it, & it will be the best way… just “getting a better job” is easier to type rather than reality, & not being able to hit “pause” on your bills…
Try to up your income by 4-600 every couple of weeks.. If you’re pulling off 35 to around 55 hrs a week, picking up a part time to push that to 70-80 hrs combined *will pay off* ..
I have a separate CMA (CashManagementAccount) I use as a personal bank acct, an individual TOD that fidelity automatically gave when I opened it/signed up, an HSA, & Roth - all thru Fidelity
My part time income I fully allocated into the HSA & Roth, & also put towards gas $$ (that I would put in my CMA)…
*Heavy budgeting*
My FT income I had a % go into my companys’ 401(k), & tried as often as possible adding into my Individual TOD acct… & after bills, funds were towards the necessities/extra spending $ which I maneuvered with out of my CMA… Basically still maneuvered with my FT job as I was before, except the $$ I was putting towards retirement from my FT was put towards my CMA(“savings”), & spending of course adjusted some because the gas & food budget change (but the “Serious Mass” protein shakes helped ALOT keeping me full)
I’m planning to get back to this plan after I finish my online CS50 courses, I adjusted before I fully went forward with this to have more saved up for my actual emergency funds by only adding to my retirement accts every 2 weeks … I hope this helps, good luck💯🤝🏾
What time stamp do they cover 46
I think my number is 1.5 mill. Too far away to know when I will get there hoping by 59, that way I can start using the 401k. Not close to the number yet but over a decade to go.
I have two numbers, a cushiony retirement number and a minimalist retirement number. A couple of years ago, my numbers were $3.3 million and $1.65 million, respectively. But with the recent high inflation I bumped the numbers up to $4 million and $2 million, respectively, to give myself more of a cushion for unexpected future high inflation. A minimalist retirement is not ideal, but not having to work a job, even if on a tight budget, is still a huge amount of freedom.
I have ~35 years to go, so my numbers need to be higher than yours, all else equals, to account for more inflation.
1.5 mil is not much. that includes your house, 401k, IRA... everything that is of value, added together.
Please talk about the value of a dollar in your twenties, after decades of investment, DEFLATED BACK to the moment it was earned. It's hard to make sense of one dollar becoming 88 unless you include purchasing power and pull out inflation.
I,have two children 11 and 12. Year old. Net worth each one 60 thousand dollars invested in the three fund portfolio. I can’t wait to see those portfolio in 50 years
I think maybe you meant 50 years? It's generally not recommended to imvest in markets on a 2 year time frame.
@@arh1234thank you I mean 50 years
Joined the Navy at 18 with 7k in the bank. I did janitorial and smoked a lot of pot in high school. Left the Navy after months with 40k in the bank. Invested 30k in the S&P stocks. Started working at UPS, Exide Battery and did concrete on Saturdays. Invested 1k a month every month into it with my Financial advisor James Fletcher Brennan, Cashed out 350k from the S&P Cashed out and Semi retired at 31. Took a year off. Traveled. Came home and started working part time just for the insurance, entertainment and pocket change and still investing in stocks with a 3 million net worth, Work isn't work when you don't have to work. Becoming wealthy can be done in few years. It feels like 60hr work weeks. Feel the pain of discipline early or feel the pain of regret later. I wish everyone well!
Thank you so much. I'm really fascinated about Investing and I'm lucky I saw your comment. I’ll look him up and drop a message. You really inspired me. God bless you.
about to turn 40. 53k saved in tax advantaged retirement accounts. 10k in I-bonds. 9k in HYSA. 70k salary. $900/mo expenses. Maxing IRA and 401k leaves me about $500/mo extra. Putting the extra in a house down payment fund. Am I gonna make it? I should hit around 90k by 2024 (if the year goes well).
Do mortgage payments count in the savings rate?
Maybe on the capital aspect of it?
The short answer is no. I can't imagine they'd count housing costs as "savings." Not even the principal payments.
No. You can count your employer match % though.
Adding to Greg Hill you can add employee match if you make under 200/250k a year or so
No
others have given the reply - it is no - especially @Matt. This is expense not saving.
A question also would be if the equity should be added to net worth. The Money Guy has a video on doing your net worth statement - and even here a house / used asset does not count since you would have to sell it. However, the amount and essentially your mortgage schedule could be attached to a note to identify it for longer-range planning.
*10 Minutes Prior to live show*
If this show follows its usual format, I'm expecting the age groups covered to be the 20s, 30s, 40s, 50s, and then maybe 60s and above. Honestly, I'm sure many of us wouldn't mind if you guys went and covered under 20, 20-25, 25-30, 30-35, etc. I'm currently 23 and since I feel like I've set myself up well in accordance with your 20s guidance, I can't help but wish there was a bit of more specific guidance prior to myself reaching 30. Still, I'm looking forward to an amazing show as the Money Guy Team always delivers.
I feel the opposite about this. I think the Money Giy show has done well to give you the details on the different stages in life, and the FOO is almost bulletproof. Any more specific would be too much pressure on people to live their lives. Some people get out of college at 21, some don't until they are in their late 20s. 20-25 honestly mean very drastically different stages in life ranging from still in school or even making 6-7 figures at their job. Age is really just a number. Figure out where you are in life and where you want to be for retirement, then create a plan to set milestones to achieve your goal. It sounds like you are ahead of many 20 yr olds, that just means your path is so much more flexible than someone who started a decade later but retirement is coming sooner. Maybe you are closer to seeking professional financial advice than seeking TH-cam content.
They have steps layed out that apply to everyone.
@@kzenias Any advice for any age would put pressure on someone. Some people don't graduate college until their 50s, some people don't begin investing in their 401k until a few years before retirement. Imagine the pressure that the Money Guy show puts on them, but I'd rather this content be put out regardless of what pressure it would put on people, the Money Guy team is a very healthy source of advice for those who have lost their way or need to play catch-up. I respect your opinion to feel differently, but I feel the majority of the audience would want more specific advice broken down to 5-year intervals, voicing that is the main purpose of my original comment: you just happen to be an outlier as far as I have seen from the community talking amongst ourselves. And if the Money Guy team sees enough support of that, then the hope would be that the show would tailor better to the audience. As far as seeking professional financial advice vs. TH-cam content; I actually am seeking TH-cam content in order to avoid paying for professional financial service, I do not think I have an amount of wealth that is appropriate to begin seeking professional advisors, nor do I think I'd want to spend whatever subscription fee for those services. I respect the FOO and try to follow it as closely as possible, but that's besides the point of myself voicing for 5-year interval advice.
I mean this reply to be respectful and informative, I am not attacking you nor do I want to create a toxic atmosphere here.
@@NickVetter I am assuming you mean the FOO. Yes, while that applies to everyone, so does me saying "You should all invest before retirement. Period." It's real advice and applicable to most if not all people seeking retirement, but that--as does the FOO--can be broken down into different stages for a person to gauge their progress towards a successful retirement.
@@joshuamendiola1382 at some point you have to go to a financial planner. I think you are at that point.
The FOO is the best!
41:30 Long time listener and love the show fellas but that graphic is incorrect. Annual spending in retirement of 60K with a 4% SWR (25x annual spending) does not translate to needing 4.57M to reach FI. Based on 60K annual spending and a 4% SWR you would only need 1.5M (60K x 25). Your math puts the SWR at approx. 1.31% (76x annual spending) based on that same 60K to land at 4.57M. Applying a 4% SWR to a FI number of 4.57M means you’d be drawing down 183.2K per year, way more than the planned 60K annual spending. The correct number needed to reach FI based on the data and assumptions given is 1.5M.
That isn't factoring in inflation; their numbers are inflation adjusted. Using some rough numbers, $60k adjusted with 3% annual inflation equals about $179k in 37 years. $179K*25 equals about $4.5M, roughly the number they showed.
I was really surprised median net worth in US is only $79K. Australia median net wealth per adult is $US273,900. US average (mean) net wealth is higher than Australian, so it must be skewed a great deal by the very wealthy individuals.
it is surprising that you only need 1 million, to be part of the 1%. I am part of the 1%, but I don't feel anywhere near being rich.
How do we know we r on track if our portfolio dropped around 25% over past year (though we r still maxing out Roth +401k) .
Stay the course
That's why they focus on savings rate rather than portfolio size. Your portfolio fluctuates significantly with the market, and is largely out of your control, but your savings rate is fully in your control. Assuming things average out in the long term roughly the way they have in the past, you're on track as long as you maintain a healthy savings rate, regardless of the current state of the market.
So what do you guys suggest when your 25, have 150000$ mortgage, 2 kids, and no other debt? Cause I feel like I'm in the messy middle, but I want to take advantage of the time factor, with a bit less disposable income.
Lol right I know
I'm not a financer; but you should see if your company does a 401k match and put at least the matching percent in, and pay the principle of your house off faster.
@@sawderf741 thanks:) I'm already maxing out my employer match Roth 401k, and I put 200$ a month into a personal Roth IRA. I do try to contribute to my mortgage a bit more, but kids are expensive.
For married folks, should we be dividing our net worth by two for these comparisons?
No, not unless you keep your incomes, expenses, and finances as a whole completely separate, which the vast, vast majority of married people don't do. It's household net worth (although, if you wanted to do it individually, you could, the total numbers should come out the same either way, it would just be split in two based on individual income).
you can count net worth together. That is how you can gage your spending in retirement, with both of you in one house, a car/or two, same utility bills, same food bills....
Darn, ya'll were coffied up for this one.
covfefe
79k net worth??? Holy Cow that is LOW….but not surprising!
Save 20 percent just towards a 401k is pretty difficult when you have other expenses. Car, rent, student debts... so it's definitely easier said then done.
Ok, I don't think we should be comparing our income as middle class globally, that's not going to work if we are making US dollars and spending in US dollars too. Maybe being rich like that would be earning in US dollars and say spending in pesos or another currency of lesser value than the US dollar.
You say home equity is included in net worth. Does that mean the principal portion of you mortgage is considered saving? If so, does that count towards the 25% savings goal?
I would say no, as the principle in you home is not spendable without taking on some form of debt. The only exception would be if you are planning on down-sizing in the near future to a cheaper home, and are going to be actually realizing the equity. Because of this, principle in a house can't pay for future expenses, which is what that 25% savings is being set aside to do, so it shouldn't count in my opinion (and based on other videos, they would agree with me). That being said, paying off your home WILL decrease your living expenses, so while you shouldn't count it as savings, I think you can and should factor paying it off into your estimated future cost of living.
❤❤❤
I am a teacher does the money I put into my pension count towards savings %.Between my wife and I we put $1000 a month into our pension.
Yes.
I’m 41, I don’t remember my 30s 😂
The Guardrails tool seems a bit unrealistic.
25% investing
25% Housing
20/3/8
That leaves a small amount for the average American household that makes $70K annually to be able to pay for groceries, childcare, car loan/insurance, phone bill, etc..
$70,000 a year translates to roughly:
- $1,100-$1,350 a month in investments (depending on how your investments are taxed).
- A $150,000-$200,000 house (depending on the down payment and location; this includes a 7% mortgage, insurance, and property taxes).
- An $18,000-20,000 car.
Which leaves approximately $1,800 a month (after taxes) to pay for everything else. In most places where you can get a $150,000 to $200,000 home, $1,800 a month should cover bills and food with a reasonable margin left over, even with kids. It's not glamorous, but it's perfectly realistic. If you have debt beyond the house and car, that throws a bit of a wrench into things, but that's precisely why they push so hard at becoming financially responsible early.
@@Alan-jk1yi I would agree if this was pre Covid 3 years ago. Most states that’s paying $70k as the average household income, homes cost well over 150-200k
realistically, 10-15% goes to investing, especially when you are still young, with the childcare etc. there are ways to have extra money. don't go for latest Iphone/latest techs and expensive cars. cut down the vacations and the eat outs. gotta sacrifice something to get there.
If you have to put that little down you're buying too much house. Especially at current interest rates.
As a 22-year-old, is saving 17% good enough at this age to not feel like I am not doing enough (20-25%)?
Anything is good enough, 1% is a step and 2% is two steps. 17% and that's 17 steps towards your goal - those are leaps at this point
Yep… just keep trying to limit expenses and everytime you get a raise try to put 50% of it towards investment until you get to that 25% goal.
In some other shows they did, they actually showed that under 30, you could have a lower percentage savings rate and still finish similarly or even ahead. Thanks to compound interest. However at 30 when you have less time then it becomes more important to hit 20-25%
Absolutely! It's something you work up to. The FOO is so powerful. Always follow the FOO.
It also depends on whether you are comfortable with that 17%. To utilise compound interest, it's crucial to start early, like you. Try to use a compound interest calculator and fill in the 17%, inflation rate around 4 - 5%. If you are ok with the outcome by the time you retire, then you are good to go.
The thing I hate about looking about financial advice is how as a 34 year old, it’s like my life and chance to build wealth is over lol😂😅😢
Does it make you feel better or worse to know that 50-year-olds who didn't really start saving until our mid-40s are watching this?
I screwed it up in my 20s by not investing anything lol
Being happy and dying 9 years later will also turn your $88 per dollar.
Investing 25% but our 401k contribution is only 10%.
They don't put a dollar amount on each age
16:40
Live of dirt. Work your ass off. Invest everything.
Health & Wealth. It PAYS to be healthy.
Is it $1 to $44 or $88? And what's the rate of return you are using?
It’s 88 when you’re 20 years old, using an 8% return
@@chemquests Nope. It's 88 when you're 20 years old but that's *not* the rate of return they use.
A year ago, I reverse engineered where they got their rate of return for a 20 year old from and can confirm that the rate of return is a 10% *nominal* rate of return compounded *monthly* . The key words being *nominal* and *monthly* . There are many different interpretations an interest rate can have at the same percentage point, depending on the compounding *frequency* and whether it's a *nominal* rate _or_ an *effective* rate.
@@thoryan3057 10% sounds reasonable; I was just operating off memory & could have misquoted them. They’ve definitely referred to the long term average of the S&P 500 as being about 10% annually. Obviously the equation for compound interest includes the frequency of compounding
@@chemquests Mark Zoril (another fiduciary advisor) recommends using 5% as an extra conservative assumption (3% during retirement). He still believes in equities, unlike the financial articles that try to scare people from them, but Mark emphasizes investing more rather than investing in something different.
His reasons for this assumption makes sense (the debt crisis will impact economic growth sooner or later). It's disappointing to think equities may not continue the trend of the last century, but it's better to prepare earlier while there's still time for compounding interest to take route.
Though I will say that seeing monthly contributions needed for a 5% expected return makes me cry. 😂
They've said before that they use 10% in 20s, 9% in 30s, etc since the portfolio gets more conservative. So 100% Total Stock Market in your 20s.
I am so happy I moved to Queretaro in 2021 at 79.
It is safer and 70% less expensive than the USA for me
I live off my savings.Queretaro. and save my SS and pension.
I have always helped non beggars help themselves.
If your saving in your 20s pat yourself on the back first off ! But these guys pressing for 20 to 25 % of you gross at that age isn’t realistic and is definitely depending on your wage !
Hmmm, what about buying a 95k bmw m3 cash at age 25? Is that ok since it’s not financed?
unless you have millions in your bank account, the answer is no. use the excess cash for investments as much as possible.
I could retire at 20 years old if I had 4 million dollars, lol.
It’s meaningless compare wealth in North America to the world since we live here.
3-5% down payment on a house is terrible advice IMO. You are forgetting about PMI insurance payments plus additional interest costs. 3% is only an FHA loan with forever PMI in a rising interest rate environment. Plus you’re assuming the house maintains value, the roof doesn’t need replacement, or the furnace goes out. I agree with the other comment of reducing the home cost. Be patient and don’t get caught upside down. Last point is that the stock market doesn’t always go up. If it goes sideways while assuming all of these additional costs you’re possibly setting young people up for failure. The 80’s to the 2020’s was a unique wealth building period. Don’t assume this to be a given moving forward
If you have good credit, you can get a conventional loan with a 3-5% down payment, there is no reason to take out an FHA loan with good credit. For those who don't have good credit, perhaps you are right, but you can always refinance into a conventional loan to get rid of PMI down the line when your credit improves. That also isn't taking into account their recommendations to keep your housing costs (mortgage cost, insurance, and taxes) below 25% of your gross income, which is intended as a buffer against the issues you bring up. Whether you can actually find a place with a 3-5% down payment that falls within that guideline is another story, but I don't consider it bad advice if you can find the right place.
That being said, I think that advice was solid when mortgage interest rates were 3-4%, but I think it is becoming rapidly outdated with the increasing mortgage rates (7% and climbing as of writing).
PMI is very cheap with good credit. Almost never worth it putting down the full 20% if you know what you are doing investing your money.
🇺🇸
You only live once, but you only have one life. YOLOBYOHOL!
you can be dead and someone brought you back using CPR. that's twice.
@@stephenc2481 no, because you’re only brought back if you never truly die in the first place. You can still be alive even if your heart isn’t beating.
@@michiganabigail 😁
My 19-year-old worked all summer and saved his money. My wife and I encouraged him to put $6000 of his earnings into an IRA and despite his hemming and hawing and dragging his feet, he ultimately did it. he’s dividing his money between several different index funds. What will his $6000 investment likely amount to when he’s 65?
$6k at +10% over 45 years would be $430k
NerdWallet has a good investment calculator
Downgrade from a $500K home to a $300K home 🤣 I'm an American, but that to me just exemplifies the wealth waste in American culture. If you're pouring that much money into a liability, you deserve to be broke.
1 million to be the top 1% of the global net worth? Not even close. I think 11 million is top 1%, 1.2 million would be around the top 10%..
I used to love listening to you guys but your contents have become stale. Every show sounds the same now. Why don't we talk about the current state of the market. There's a lot of confusion and misdirection. Your audience would appreciate some guidance
I agree with this
Their advice doesn’t change. They’ve addressed this question before and said a good plan in a good market is a good plan in a bad market because we’re playing long term. Keep in mind they don’t discuss how to invest and what markets are doing. If that’s what you want, you have to go to another channel. This is personal finance and getting people to invest
This is funny, because there isn’t much to the strategy. Save more than you earn, invest the difference long term.
I despise what other finance TH-camrs have turned into when talking about specific stocks or markets. That has become even more useless for the sake of clicks as videos focus on very short term moves. The whole point is long term investing!
@@GzoGuitarWz this channel is good for index funds and retirement. other finance youtubers give info for traders and stock pickers and things like that, ACTIVE INVESTING. its just the format of this channel and the information is the same in every video and it gets a little stale
I’m out there yet but, feel myself drifting there!
(I just came in from outside where I heard the neighbors AC running! It’s early October, he is Renting the place and him and his live-In Girlfriend have Electric Cars (that are far nicer than mine!)
Anyways, reality is there are far more of these people than people like me!
I hope that’s why they focus so much in this area!
But, I know these guys have Rental Houses like me!
They should spend time talking about them!
As well, NNN Leases are an area I think they may have money invested and a class on them would be great! I’m sure there are many things I can learn!
FUCK I'M 35 AND I HAVE NOT SAVED ENOUGH. (Only have about $200k saved.)
but but but ... those numbers for the cars push you into the used car market and crimininials buy used cars ... and poor people (* mocking my neighbor)