After I graduated from grad school I found my self overwhelmed in debt in my late 20's I started to follow Dave Ramsey. Even though he had a good perspective listening to him always made me feel depressed. Now in my early 30's and listening to you guys motivates me and gives me hope that my army of dollar bills can still work for me. Wished I would have come across you guys a couple years early, but grateful that I have. Merry Christmas!!!!
I think D.R is only good for 2 types of people, 1 that person who is so lost in debt that the need that black and white approach to money to help start them getting out of debt. 2 that person who can not use a credit card responsibly - the one who can't or wont pay of their balance monthly.
Imagine thinking paying off student loan debt is supposed to be a walk in the park. Reality check, the Money Guys would not be telling you to invest 25% of your income before paying down 6% interest debt. You’ve deluded yourself into thinking paying off debt is supposed to be a walk in the park. Like anything worth its salt in this world, you have to delay gratification to live in abundance. Playing the 9% investment return vs. 6% loan interest spread is a losing game. Best of luck, and I hope you haven’t decided to keep Aunt Sallie Mae living in your basement simply because kicking her out was too “depressing.”
Yea Dave Ramsey is basically AA for people who are compulsive spenders. His content has helped lots of people with behavioral finance but probably is not be right for everyone.
I'm 29 and you guys have helped me understand finances so much over the last few years as I moved from paycheck to paycheck with tens of thousands in debt to being able to save about 25% and being well on my way to hyper-accumulator status. Thank you guys so much for this
Respect the FOO! I’m 38 and have $1M in investable assets and $1.5M net worth, no debt, mortgage paid off, and almost done with kids college savings. How do I do it with a stay at home wife and 3 young kids? Live below our means and be happy and satisfied with what you have. If it ain’t broke, don’t fix it. Been driving same car for 18 years. My parents always ask why I don’t get a new car? I say “why?” It works just fine and I could care less about driving a newer car.
Awesome job and discipline! I'm 35 and later to the investing/savings game. It's been a challenge for me and my family to break the habits of living above our means but we remind ourselves of the long-term benefits and stay the course. Discipline and common goals are key.
Refinance that house at 2.5% interest and put all that equity into the stock market. Since you are saying your house is worth around 500k, you are losing out on around 2 million dollars in compound interest over the span of your life.
Bought my home while I was making $14/hr. A few years ago I was making $18/hr. driving a forklift. Now working for a union making nearly $30/hr. Married my wife while I was a forklift operator and we were lucky enough to adopt our son during that time (had substantial help from a non-profit). I am 38 now and only have that median in my 401k. With the consistent overtime at work I might max my 401k if not come close to it AND on pace to max a roth ira because of watching this show. Not sure where I will be in retirement, but having a son and stay-at-home spouse has really caused me to contemplate the future
Bro you sound like me, I bought my house making 16$ and hour in 2019, got up to 22$ now at a union job making mid $30s/hr I always all ready to comment better max your Roth IRA before 401k 😂 but you are doing that too great job bro, my savings isn’t there yet at all, my wife is stay at home, just got our full e fund buttoned up and have been getting company 401k match. Excited to get to that 25% mark soon! God bless
Wow I wasn't subscribed to you guys? Fixed that. We're in our 30s and committed to saving at least 40%, trying to aim for 50%. We're looking to retire with a total of £5m so necessary to keep up that kind of level. For me and my wife, it was really our daughter (now 2) who encouraged us to look more long term. We earn well and lived well in our late 20s, but as you guys say, time to grow up and start to think about the future :)
I'm 38 and only have $38k in my 401k. I was in an abusive marriage for years, and he would not allow me to have my own money, or save for my future. So, unfortunately, I've gotten a very late start. Thank you for this video. Ive learned so much and you have no idea how grateful I am for you guys ❤ Now im going to work on saving 25% of my income and see how it goes.😊
As a guy who is creating my own TH-cam Channel on finance I find both of these guys amazing. I may not have the expertise like these super pros, but I am "SO EXCITED ABOUT THIS" lol
I just found you guys thanks to that video you did reacting to Caleb Hammer! Caleb is really entertaining to watch, and really drives home the stakes. But I really appreciate how much advice you guys have for people who are a bit more responsible! I’m 27 now and I recently started a Roth IRA, I’ve got about 4.5k in there. And now I’m just about to enter the workforce with my new degree, but I’m lucky enough to be completely debt free. I think my next step is to get (and never use) a credit card to build up credit, and then freeze that lifestyle creep as soon as I can. My next two big goals are to buy a jeep and get a dog, i don’t care about having a bigger or nicer apartment. I want to just save save save. I’d like to move to a cheaper building within a year or so to help this.
When I lost my job in the pandemic, I went into a “because I need to work” position that paid a fraction of what I was used to. Daily expenses like food and rent and bills went on the credit card. I seriously considered bankruptcy in early 2021 in my mid 20s because I just couldn’t see another way out. Now, I am almost debt free, consolidated all of my high interest debt and am on track to pay it off and start maxing out my ROTH. Every single dollar, every single decision, counts!!
I'm almost 32 and don't make much, but by saving early, my net worth now increases by an amount equal to my annual income each year (savings and investment earnings combined). I'm nowhere near perfect and don't always follow my budget, but the 20s are so forgiving and I'm glad I made those low-impact mistakes to straighten out my money mindset early on.
I just turned 30 2 days ago. On the one hand, I'm pretty far behind where I should be. On the other hand, I have no consumer debt, a house, and my son was born when I was 16. So I don't have some of the troubles that other people have in their thirties. So I guess I'll just do what I can and hope for the best.
I finally got my 19 year old brother to put in $1000 into his Roth IRA. Monthly he is doing $150 a month starting January. When he gets a high paying job in a few years, he will up it to $500 a month. I’m more excited for him. The earlier the better.
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
I've doubled my income since starting my career 6 years ago. The best thing I ever did for myself was act as if my income never rose. My paycheck has stayed at the same level while funnel the extra income into a 403(b), HSA, and other retirement accounts. Lifestyle creep is the enemy!
When you're barely making ends meet with paycheck to paycheck, sometimes even forgoing necessities, I can't wait for my lifestyle to improve and then find an equilibrium that I can maintain while putting money away
A great compilation! I'm glad I've found you guys in my early 30s. While I consider myself fairly good with money, this really gets me excited (like Bo!) I do consider myself an upgraded 20 something since I'm single, but it's important to remember my time is more limited to my younger counterparts. Ready for abundance when it comes to me! Merry Christmas Money Guy Team and fellow Money Guy fans!
I think it’d be interesting and helpful to add inflation to your projections. If we want to retire at our current standard of living, we should be considering that
17:05 I appreciate all of the information! As a newer Advisor all of this is helpful not only for growth in my career but also personally. My husband and I have been hyper-accumulators, aside from the time I took off to stay at home with my child. My husband is 32 and even with a rough 2022, was able to stay above that $100k mark in retirement assets. I’m 29 and nearing the $70k mark in retirement assets. We put 25% in retirement and add what we can on a monthly basis to our brokerage (10-20%). With the rough market conditions, banking fears… it’s always nice for some reassurance!
Man I’ve been In my head about if I’m doing good enough. I just hit $100k investments at 29 (almost 30) and just the “which is incredible” has been the only thing to make me feel decent/good. Hopefully keeping up and my military retirement will be enough!
Great advice for a single person…if your spouse does not agree with the austerity implied by “hyper saving”…divorce and loosing 50% of the loot is in your future. Talk about it pre marriage and a prenup may be in order.
@@TheOne-vf2yw wish i could. Live abroad teaching English and there's really no other job for foreigners in my host country. Got a bunch of start up ideas but no coding knowledge nor network to try and get anything off the ground. Plus language barrier. Still gonna learn to code!
Have you ever watched Caleb hammer? He talks about how having existing debt while investing is pointless and you're better off using your investments to pay off the debt because of interest
Congrats my friend! Our goal is age 35! Money is money and there's plenty to go around but the piece of mind and being a slave to noone but Jehovah Jireh is our motivation.
Agreed we will have our home payed off this year (32). The mental return on that investment is much greater and it frees up that much income to invest. 100% of the foreclosed homes have a mortgage.
Team financial Mutants here at 31yo! 150K+$ in net worth (300K+$ combined with my husband) and my 1yo has 8K$ in investments ❤ And we are living a great life balancing investing and traveling. 😊 We don't have huge incomes either just great discipline.
I’m of the opinion late 20s to late 30s is the time you can really put the hammer down. Between 20 and 25 I saved around $70k but between 25 and 29 (current age) I have saved just under $500k because I finally have the income to actually save a ton of money. Working odd jobs in college making $30k a year doesn’t really give you a ton to save. But once you hit 25, 26 and you’re 5 years into your career and have gotten a bunch of raises things are a different ball game.
We are millionaire net worth, we have the opportunity to pay off our home over on the coast here soon. I’ll trust Brian and take his advice and invest until we are 45! ;) I trust Brian.
Thanks for the knowledge. I plan on switching my individual stocks to zero fee mutual fund and adding more savings to that fund outside of what my 401k takes out of my check.
Hi everyone. I will start out with a bit of advice that has served me well before asking my Q. Buy a house that needs doing up that can be a forever home first time. Mine had broken windows, ivy growing inside etc. Over time we have redone it all and now my LTV is
Are the average and median values swapped for 401K balances? I was under the impression that avg was normally skewed by extremely high balances & median should always be the lower value
??MGteam, when you state that a mortgage payment (should be at or below 25%) of gross income; does that mean Just principle and interest or principle, interest, taxes & insurance? Thanks are all the great advice, content and visual ads!
Would you folks be able to provide consultation for Canada? You folks are one of a kind and I love your advice/content. Looking forward to hear back from you.
The information here would still generally apply, just need to swap ROTH IRA and 401K to TFSA and RRSP. You could also likely get away with not being as aggressive in your savings rate given our better social programs.
After seeing this episode, it might be neat to see a graphic of what percentage the money you put in to your retirement savings in your 20s, your 30s, your 40s, etc., represents of your total retirement savings at age 65.
As someone who is 30 this video does interest me. But I feel like its gear for people who are married and have a family. What about those people who are not looking to follow this path necessarily? What should there investment strategy be?
Still applies, but you might be able to have a higher savings rate given you can have reduced costs (ie no children) though not having benefits of cost sharing of base expenses might reduce this amount. The numbers still work the same.
I'm not sure there's any youtube channel that I have taken more advice from. Their are tutorials I follow, once. And there are people doing things I can't afford. And there are people giving bad advice I watch to laugh at. But I have started doing net worth statements (just did it last night for the 3rd year in a row). The multiplier by age got me to start investing in a Roth instead of waiting for my finances to settle down. I tell people to "retire to" not "retire from". Thanks Money Guy(s).
Glad to have this mindset early, i'm turning 25 in coming few days, having 100k net worth in stock and ETF and always keep bank account at 500 dollars Choose to be poor for 10 years and millionaire for the rest
3:23 Eh maybe. Amoritization makes your total net worth really take a hit in the longrun. A $400k house has you paying an additional 550k in interest over time at a 6% rate so unless retirement is going to outpace that in the longrun it is better to pay it off VERY quickly and aggressively in only 3-4 years and at that point you've only paid 30ishk in interest which is much less and much more overall you can put into retirement in your life
What about saving 25% and being aggressive with the mortgage ? I’m in my late 30’s. Don’t have that much invested yet ( 120k ). I’m in Canada and have to renew my mortgage at the end of this year. Interest rates have gone way up. My plan was continue saving 25%, and pay off my mortgage this year ( 220k ) then be way more aggressive with investments (50%)
I wish we could break this down for military guys. I went from 18.5K a year to 41K a year in 6 years so its hard to calculate the 2.6 times your annual salary in the 401k my salary has more than doubled in a very short period of time compared to most
I was in the military. You would be surprised what your civilian equivalent income is. A lot of people think the military is paid poorly but that couldn't be farther from the truth. I am guessing you say 18k because that's when you were in the dorms but now you say 41k because you moved off base and have BAS and BAH. Here is the trick. You always add in your benefits to their civilian equivalent. So even though you only made 18k in the beginning, you literally had zero bills. The military paid for housing and food among other bills. You could potentially invest 100% of your "income". What you do is add back in your benefits. So look at what the BAH rate for your rank is. Look at the BAS. Even if you don't get them add them into your income. Now the military pays for your healthcare. Look for what it would cost for a decent healthcare plan. A good number to use as a single person would be $500 a month. So add that in. The military also has tuition assistance. People generally wouldn't treat it as income but I do so add back in that if you use it. I did the math as an E-4 aircrew member in the Air Force and to have the same benefits and living standards as what I had as an E-4, I would have to make around 100k in the civilian world. Now I was Air crew and had extra pay in other ways like nonstop TDYs with crazy good peridium and a lot of deployments.. I would say the average E-4 would be around 60-70k. So if you were to completely invest about 17k, you would be hitting around 25% of your civilian income equivalent. Most people in my squadron though would voluntarily deploy. They would breka their lease and cut off their phones. They would have zero bill as while deployed everything is covered. You are still paid BAH and BAS. So they would have around 50k in income and they would invest 100% of it. One of our pilots was never home but by the age of 30 he was already a multi millionaire.
@@zelrinth513 thank you we are on the same mind set the number I stated was just gross base pay. Actual numbers are 18K (in the barracks) now about 65K (with allowances not including health). I'm just trying to figure out how to factor my numbers given my base pay has gone from 18 to 45 in a very short period. By no means am I complaining about that I put in the work for it. When it comes to the striving for 2.6 times your annual salary in retirement. (Side note i didn't know much about investing earlier on in my career so i kinda short changed myself the first 5 years because my money was in the G fund and I didn't know what I didn't know) I know some people will read your post and get that knowledge and thank you for putting that out there.
Hope I can retire comfortable. Net worth right now is about $141,000 (I am 34) This is a combination of my IRA, 401k, other savings, and the equity I have in my home
I agree on everything except paying not off the mortgage. Is the compound interest more important than eliminating an $1800 mortgage payment being gone for the rest of your LIFE? Even if it is for most people, it’s not for me. I don’t plan on selling the house we built. I want to be prepared for the worst. Paying off my mortgage gives me peace of mind that if anything ever happens and I can’t work, I won’t be losing my house. That’s my personal opinion though. Love the money guy show!!!
is 5.125% "low interest"? my mortgage is not cheap because 2022 was wild. i can afford it, but should i just keep saving or save some of that interest> where is the cutoff? if mortgages were like the 80s and were 15% would that be the same?
I make low 6 figures at early 30s and I still feel like I don't make enough since I want to pour more into dividend investment in the taxable after maxing roth ira. Investing is addicting man
Across the board. Some people like to save the max in an IRA first because there are usually a lot more investment options and then go back to the 401k to get to the 20-25%.
Either way if you are actually saving that high of a percentage you will end up with way more in retirement that you are making now. At least using their rate of returns. You would do fine with way less.
Just rurned 30! Watched the money guy for years. I dont earn much, and I wish I saved more. Doing my best, but with working 7 days a week. Debt free, home is half paid off, 25% savings, but still feel behind.
You'll be in good shape in retirement starting at that age. I was in a similar situation to you with lower income. Nice thing is at your age you don't have to save as much.
Biggest challenge for me is I almost doubled my income from going from non profit management to IT recruiting. When something like that happens is the % of income saved still the same?
Yes. The logic is if you spend more now than you used to, you'll also need more to fund your expected lifestyle in retirement because your target has changed
Bo says a 36 year old can become a millionaire by 65 just by maxing out the Roth, but that's not nearly 20-25 % of probably most of our incomes. Am I understanding him correctly? Combining that with my work retirement, which I've been contributing 9%, I feel like this would replace my income or get me pretty close...
He's a little too optimistic here: Starting with $0 at 36, investing $500/month for 29 years, earning 10% annually, only gets you to $939,387.35. You'll need 1 more year (if the investment was linear in its returns). Note the 10% annual return: the s&p 500 historically returns this, but that ignores historical inflation of 3%/year, so to make sense of the future value of dollars, I'd lower the rate of return to 7% (10-3). So, while you would have $939k, it would have the purchasing power of $588k in today's money.
B&B Question: Why do you use gross income vs take home when calculating things like retirement savings/home expenses/car expenses etc? As always, love the content…can’t thank you enough for all you do for the community.
If the end goal is the same it doesn't matter which number you run. If it's gross it's a smaller percentage than if you used take home but reaches the same goal. But a lot of people, myself included, find it easier to use the take home pay.
Easier to remember $100K vs $78,623.47. Then when you factor in the savings % easier to visualize the number as 20% of $100K vs 27.8% of $78,623.47 (I just picked numbers so I know the math won't work but the point remains the same).
@@wolgercon But the same can be said with net income? With net income, I’m using real dollars that are in my pocket for calculations, not 25% of something that isn’t 100% mine. If I get to 25% of my gross for my home and 25% of my gross for savings, the actual number is like 60-70% of my take home pay. To each’s own, but I wanted to ask if they had a reason why. I’ll still use take home pay for my calculations since it’s easier imo.
Super late, but I think they use gross because tax rates will vary depending on incomes and other factors and your 401k will decrease this making it more complicated to get an easy target number with net. Like my wife and I save 40% with respect to our gross+company matches. This is how I calculate it cause I do full compensation vs how much saved irrelevant of other factors. If you calculate savings net with respect to net income then it doesn't matter. You will always skew something though cause of how some things are pretax and others are post tax. Just have to make sure it's consistent on what is being compared to to make sure you kind of know you are saving around the target percentage. I think that's the real idea behind it.
Hi guys. I am 38 and very lucky. I have about $389K in retirement savings, but my net worth is 1.6M. Most of net worth is in home equity (2 rentals). I also have about $130K in cash. Not your typical millionaire. But I also owe about $900K in mortgage debt…..ouch. Not sure if I am doing well… or need guidance lol.
So 3 properties minus 900k mortgages, plus $389k retirement equals $1.6M? If the two rental properties have positive cash flow considering the whole PITI payment and maintenance, then you're doing just fine.
I like Dave, and respect his acomplishments, but you guys offer a better approach wealth building. You guys don't teach how build walls to stay on track, but actually teach technical and logical strategies to stay in track. I never agreed on talking down to people to make them understand. You guys make people realize the facts by using technical strategies that don't overwhelm, and takes people way farther. Keep the great content.
When you say "low interest debt" do you mean ALL low interest debt (under 5%) or just your mortgage? I have 2 loans totalling about 21k both under 5% and I'm struggling with the idea of paying them off outright, working extra to make extra payments and not investing or just focus in investing and make regular payments for the next 3 years. I'm 33 and that's my only debt outside of the mortgage. About 150k in retirement so far but I feel like I could be saving way more and maxing out my Roth.
I don’t understand, if my 401k graduates to beyond target date retirement funds but my 401k only has appx 10 stocks options you would still spread it into large, med small cap international etc?
Is the 20-25% rule for long term savings? Or just in general? I'm putting 15% divided between my 401k match and my personal roth ira, then put more into my brokerage account for personal savings/investments. Should i be putting 20% total into my 401k/roth?
Ive been living a rather ignorant life till 30, found the show and realized i can still invest and compound. Problem is ... i live in korea and the equivalent of a roth irs is a corrupt finacial sink hole... should i invest 25% of income into etf index or does it even matter where i put it?
Any plans to make an episode for young professionals? Little to no ability to save until 26-27, high debt, and subpar pay/room for growth (starting around ~100-110k)
Love the show. I wanted to inquire though, most of this analysis is based on 401k's and investment accounts. What about those of us with rentals? I think it's a good form of diversification but also harder to calculate as I've found it to be cash flow negative in the short to medium term while it will be a 3k a month pension upon retirement. Happy new year y'all.
Anyone can invest in the stock market and its much more passive than real estate. Real Estate is an excellent investment but has additional risk due to bad tenants and cash flow problems especially in the early stages with the debt equity ration is over 50%.
Hello great question. I have 2 rentals and love the cash flow. They have also appreciated a ton. As I bought my first in 2010 and one in 2013. I didn’t cash flow as well at first, but have a significant amount of cash flow now with a lot more equity. However, I think it is still good to be diversified and invest in the market. I have a about $400K in the market, mostly retirement accounts.
We don’t make product recommendations on the show. However, we have mentioned that Vanguard is an industry leader in index target retirement funds. Meanwhile, Ally is know for their cash management and FDIC cash reserves options. That should be enough information to help you connect the dots 👍
Im 34, I put 7 % into my 401k and my job matches me 2 to 1 does that mean I'm already at 21% savings? I make 90k a year. I also have been maxing my roth the last 2 years.
Yes, they say to include employer matching if your income is less than 100k single, 200k married. Dang, 2 to 1, that's awesome. I've never heard it that good.
I want to invest 20-25% but I also want to save for emergency savings, save for house, and pay off debts. How can I do this? while also affording incredibly high rent which is rising all across the US?
Yep. That’s what I’m wondering. My husband and I get $75k/y, we have NO debt at this point, we have an emergency fund, and I’m still trying to make all the numbers work. We don’t go on fancy vacations (we saved $2k for a road trip with attractions, and that’s what we did this year). We really watch the food budget. We’re putting 15% towards retirement. I don’t know how we’re going to increase our retirement fund (which we really need to; we didn’t start really saving until a year ago, and we’re 33 and 35), afford our current place, save for a house which will be crazy expensive in this market, and afford regular living expenses.
@@oatmealtruck7811 ideally, this is where you both would find ways to increase your income...assess skills; upskill; get overtime; second and third jobs for a temporary time...
While you may not be able to do it all...I recommend prioritizing. This is where Dave Ramsey's baby steps would be greatly beneficial. This may require a delay in saving for a house (honestly, you don't want unnecessary debt when purchasing a home anyway...at that point, you'll want to have a nice savings for maintenance and unexpected house expenses). Wish you well in your journey!
agree on this one retire early save 20% to 25% on a 401k it lowers your tax base too !! ,yea your not buying crap all the time but later in life you don't need to ask your family for help .Saving 20% is hard I use to think 15% was tops did go over to 22% for a brief time .
glad I paid off my mortgage in Feb instead of throwing it into stocks when I had the choice. Funds since that day have all been averaging in. There's not a right answer to any of this, and not paying off debt because of low interest rate, doesn't account for RISK. Fan of the channel, just a comment as this popped up today and i'm reflecting on the losses I would have had vs the debt I paid off. Take care,
I have a question, Im in my 30ies, can I count the principal down payment on my morgage per month of my rental property as a 'savings'? Since it does increase my net worth as I own more and more of that rental property.
It counts towards your net worth, but not towards your savings. Your home will of course build increasing equity over the years, but you want to look at liquid investments for your savings rate. Liquid investments are what will generate you income and sustain your retirement. Eg. at 65 would you rather have $1M in cash and $0 Equity or $0 in cash and $1M equity?
As a South African our mortgage is 6% and that is a great deal compared to some of the other things we are exposed to. Does that still count as low interest debt? Or should we be attacking it
Do you have debt with higher interest rates? I'd attack my debts in order from highest to lowest interest rate. Mathematicaly it should be the most sensible thing to do.
@@HughMirin-Bruh No we keep ourselves out of debt. I guess it is the choice between investing and try to get more than 6% or getting out of the debt early. I know TMG often say don't pay off the mortgage but they often speak of them as 3/4% which is quiet different. If we do pay it off quicker we would definitely make sure we have a decent amount saved up incase we find ourselves in trouble
Well, it is a low risk way for some guaranteed return on investmemt. It all depends on a lot of factors. How much risk are you willing to take on for extra return for example. I have a mortgage against ~1% interest (Europe), 30 y.o., willing to invest in other assets and have no other debt. This same question is a no-brainer for me. For you, the expected return when investing in a broad market compared to the guaranteed return of your mortgage isn't that obvious. I can imagine you're doubting a bit. You're on the right path anyway, from what I've read. It'd only be a minor improvement if any...
"Assume all people who have more than you are in debt."
I love this quote so much! It's sooo true hahaha
“Coping mechanism” 😂
After I graduated from grad school I found my self overwhelmed in debt in my late 20's I started to follow Dave Ramsey. Even though he had a good perspective listening to him always made me feel depressed. Now in my early 30's and listening to you guys motivates me and gives me hope that my army of dollar bills can still work for me. Wished I would have come across you guys a couple years early, but grateful that I have. Merry Christmas!!!!
Who are you and why are you telling my story?
I think D.R is only good for 2 types of people, 1 that person who is so lost in debt that the need that black and white approach to money to help start them getting out of debt. 2 that person who can not use a credit card responsibly - the one who can't or wont pay of their balance monthly.
@@sherling4663 exactly. But watch what you say because his cult really stick together lol
Imagine thinking paying off student loan debt is supposed to be a walk in the park. Reality check, the Money Guys would not be telling you to invest 25% of your income before paying down 6% interest debt. You’ve deluded yourself into thinking paying off debt is supposed to be a walk in the park. Like anything worth its salt in this world, you have to delay gratification to live in abundance. Playing the 9% investment return vs. 6% loan interest spread is a losing game. Best of luck, and I hope you haven’t decided to keep Aunt Sallie Mae living in your basement simply because kicking her out was too “depressing.”
Yea Dave Ramsey is basically AA for people who are compulsive spenders. His content has helped lots of people with behavioral finance but probably is not be right for everyone.
I'm 29 and you guys have helped me understand finances so much over the last few years as I moved from paycheck to paycheck with tens of thousands in debt to being able to save about 25% and being well on my way to hyper-accumulator status. Thank you guys so much for this
I’m 32 working at a warehouse directly after school and started investing.
Now i have a portfolio of 260k and a total net worth of about 330k
good job!!
Smart guy
Now when i have a wife and child i am not able to save as much But i feel lucky that i made a good decision back in the days.
@@moggekungen makes sense
Respect the FOO! I’m 38 and have $1M in investable assets and $1.5M net worth, no debt, mortgage paid off, and almost done with kids college savings. How do I do it with a stay at home wife and 3 young kids? Live below our means and be happy and satisfied with what you have. If it ain’t broke, don’t fix it. Been driving same car for 18 years. My parents always ask why I don’t get a new car? I say “why?” It works just fine and I could care less about driving a newer car.
Awesome job and discipline! I'm 35 and later to the investing/savings game. It's been a challenge for me and my family to break the habits of living above our means but we remind ourselves of the long-term benefits and stay the course. Discipline and common goals are key.
Refinance that house at 2.5% interest and put all that equity into the stock market. Since you are saying your house is worth around 500k, you are losing out on around 2 million dollars in compound interest over the span of your life.
@@zelrinth513 It all depends on risk tolerance. In theory you're right, as long as OP can still sleep at night it's probably the way to go ;)
Thats awesome hope to get to that point one day. What do you do for work/money if you dont mind me asking?
@@rookd1137 Surprise, surprise...I am a mechanical engineer.
I just turned 30 this year. This episode showed up at a great time for a financial checkup
I’m 32 and just this year realizing the importance of investing for my future. Thank you for this video- it’s the motivation I need right now.
How do you do that
32 as well
Let’s get to it brother
Turning 32 in a week. Time to get serious
Me too. Right there with you
Bought my home while I was making $14/hr. A few years ago I was making $18/hr. driving a forklift. Now working for a union making nearly $30/hr. Married my wife while I was a forklift operator and we were lucky enough to adopt our son during that time (had substantial help from a non-profit). I am 38 now and only have that median in my 401k. With the consistent overtime at work I might max my 401k if not come close to it AND on pace to max a roth ira because of watching this show. Not sure where I will be in retirement, but having a son and stay-at-home spouse has really caused me to contemplate the future
Bro you sound like me, I bought my house making 16$ and hour in 2019, got up to 22$ now at a union job making mid $30s/hr
I always all ready to comment better max your Roth IRA before 401k 😂 but you are doing that too great job bro, my savings isn’t there yet at all, my wife is stay at home, just got our full e fund buttoned up and have been getting company 401k match. Excited to get to that 25% mark soon! God bless
Wow I wasn't subscribed to you guys? Fixed that. We're in our 30s and committed to saving at least 40%, trying to aim for 50%. We're looking to retire with a total of £5m so necessary to keep up that kind of level.
For me and my wife, it was really our daughter (now 2) who encouraged us to look more long term. We earn well and lived well in our late 20s, but as you guys say, time to grow up and start to think about the future :)
I'm 38 and only have $38k in my 401k. I was in an abusive marriage for years, and he would not allow me to have my own money, or save for my future.
So, unfortunately, I've gotten a very late start. Thank you for this video. Ive learned so much and you have no idea how grateful I am for you guys ❤ Now im going to work on saving 25% of my income and see how it goes.😊
Great to see this topic for investors in their 30s! Usually this content is reserved for younger investors in their 20s. Its never too late to learn.
As a guy who is creating my own TH-cam Channel on finance I find both of these guys amazing. I may not have the expertise like these super pros, but I am "SO EXCITED ABOUT THIS" lol
I just found you guys thanks to that video you did reacting to Caleb Hammer!
Caleb is really entertaining to watch, and really drives home the stakes. But I really appreciate how much advice you guys have for people who are a bit more responsible!
I’m 27 now and I recently started a Roth IRA, I’ve got about 4.5k in there. And now I’m just about to enter the workforce with my new degree, but I’m lucky enough to be completely debt free.
I think my next step is to get (and never use) a credit card to build up credit, and then freeze that lifestyle creep as soon as I can.
My next two big goals are to buy a jeep and get a dog, i don’t care about having a bigger or nicer apartment. I want to just save save save. I’d like to move to a cheaper building within a year or so to help this.
When I lost my job in the pandemic, I went into a “because I need to work” position that paid a fraction of what I was used to. Daily expenses like food and rent and bills went on the credit card. I seriously considered bankruptcy in early 2021 in my mid 20s because I just couldn’t see another way out. Now, I am almost debt free, consolidated all of my high interest debt and am on track to pay it off and start maxing out my ROTH. Every single dollar, every single decision, counts!!
I'm almost 32 and don't make much, but by saving early, my net worth now increases by an amount equal to my annual income each year (savings and investment earnings combined). I'm nowhere near perfect and don't always follow my budget, but the 20s are so forgiving and I'm glad I made those low-impact mistakes to straighten out my money mindset early on.
Just found your channel. This is sooo much better than Ramsey. Well done, guys.
I just turned 30 2 days ago. On the one hand, I'm pretty far behind where I should be. On the other hand, I have no consumer debt, a house, and my son was born when I was 16. So I don't have some of the troubles that other people have in their thirties. So I guess I'll just do what I can and hope for the best.
Love your show by the way. I wish I had this information when I was in my 20s.
I finally got my 19 year old brother to put in $1000 into his Roth IRA. Monthly he is doing $150 a month starting January.
When he gets a high paying job in a few years, he will up it to $500 a month. I’m more excited for him. The earlier the better.
Not only did he "pay himself" $88,000 when he turns 65 just with 1k in the account, he also will hit the 1.5 million Mark just by 150/month! Amazing!
Tell that man to put as much as he can into it. I can’t imagine how elated I’d be if I could do 6000/yr for 11 years
tell him 230 a paycheck nets him the max a year! its easier to break it down that way. he's not far off!
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?
Might as well park it in a HYSA in the meantime.
@@abrakis1this is a scam comment bruh 😂😂
I'm just amazed at how far this show has come, and how much Brian and Bo have improved over the years; those costume changes have gotten really quick!
I've doubled my income since starting my career 6 years ago. The best thing I ever did for myself was act as if my income never rose. My paycheck has stayed at the same level while funnel the extra income into a 403(b), HSA, and other retirement accounts. Lifestyle creep is the enemy!
When you're barely making ends meet with paycheck to paycheck, sometimes even forgoing necessities, I can't wait for my lifestyle to improve and then find an equilibrium that I can maintain while putting money away
@@PresenceofthePhoenix you’ll get there! People will see and respect the hustle!
A great compilation! I'm glad I've found you guys in my early 30s. While I consider myself fairly good with money, this really gets me excited (like Bo!) I do consider myself an upgraded 20 something since I'm single, but it's important to remember my time is more limited to my younger counterparts. Ready for abundance when it comes to me! Merry Christmas Money Guy Team and fellow Money Guy fans!
I think it’d be interesting and helpful to add inflation to your projections. If we want to retire at our current standard of living, we should be considering that
17:05 I appreciate all of the information! As a newer Advisor all of this is helpful not only for growth in my career but also personally. My husband and I have been hyper-accumulators, aside from the time I took off to stay at home with my child. My husband is 32 and even with a rough 2022, was able to stay above that $100k mark in retirement assets. I’m 29 and nearing the $70k mark in retirement assets. We put 25% in retirement and add what we can on a monthly basis to our brokerage (10-20%). With the rough market conditions, banking fears… it’s always nice for some reassurance!
Thanks for sharing such a video. Much needed. It was so convincing. Nice work.
Man I’ve been In my head about if I’m doing good enough. I just hit $100k investments at 29 (almost 30) and just the “which is incredible” has been the only thing to make me feel decent/good. Hopefully keeping up and my military retirement will be enough!
Good job! $100k before 30 sounds good
I didn’t start retirement until I was 34, and that was just a matching at 5%, and half match another 2%. I’m maxing out my contributions
Found your show last month and love it and all your great advice! You guys are the best and I've learned so much!
Great advice for a single person…if your spouse does not agree with the austerity implied by “hyper saving”…divorce and loosing 50% of the loot is in your future. Talk about it pre marriage and a prenup may be in order.
I didn't begin until age 38. I save & invest about 1k per month to make up for lost time.
I’d look to bump that up if you can
@@TheOne-vf2yw wish i could. Live abroad teaching English and there's really no other job for foreigners in my host country. Got a bunch of start up ideas but no coding knowledge nor network to try and get anything off the ground. Plus language barrier. Still gonna learn to code!
I'm 30 and even though I've been investing and saving my net worth is -15 K due to debt. So I'll focus on my debt very strongly this year .
Have you ever watched Caleb hammer? He talks about how having existing debt while investing is pointless and you're better off using your investments to pay off the debt because of interest
@@PresenceofthePhoenix never heard of him but I believe it .I'm paying more in interest than what my investments are yielding.
@@PresenceofthePhoenixLow interest debt should be paid off as slowly as possible. Why pay 3% debt when you get upwards of 7% in the stock market.
My biggest fuck up was not starting a ROTH when I was young. I only managed to get 2 years of cash into it before being squeezed out with my earnings.
I will have my home paid off next year at 36. For my family, the peace of mind is worth more than money.
Congrats my friend! Our goal is age 35! Money is money and there's plenty to go around but the piece of mind and being a slave to noone but Jehovah Jireh is our motivation.
Good job. I felt the same way. Debt free is nice. It opens up all of your income for investment into your future and investment into your family.
Agreed we will have our home payed off this year (32). The mental return on that investment is much greater and it frees up that much income to invest. 100% of the foreclosed homes have a mortgage.
Team financial Mutants here at 31yo! 150K+$ in net worth (300K+$ combined with my husband) and my 1yo has 8K$ in investments ❤
And we are living a great life balancing investing and traveling. 😊
We don't have huge incomes either just great discipline.
I’m of the opinion late 20s to late 30s is the time you can really put the hammer down. Between 20 and 25 I saved around $70k but between 25 and 29 (current age) I have saved just under $500k because I finally have the income to actually save a ton of money. Working odd jobs in college making $30k a year doesn’t really give you a ton to save. But once you hit 25, 26 and you’re 5 years into your career and have gotten a bunch of raises things are a different ball game.
Congratulations on being able to save so much so quickly bro
Thank you for everything you guys do!
We are millionaire net worth, we have the opportunity to pay off our home over on the coast here soon. I’ll trust Brian and take his advice and invest until we are 45! ;) I trust Brian.
Thanks for the knowledge. I plan on switching my individual stocks to zero fee mutual fund and adding more savings to that fund outside of what my 401k takes out of my check.
Hi everyone.
I will start out with a bit of advice that has served me well before asking my Q. Buy a house that needs doing up that can be a forever home first time. Mine had broken windows, ivy growing inside etc. Over time we have redone it all and now my LTV is
Amazing episode guys! Thank you os much for this!!!
Are the average and median values swapped for 401K balances? I was under the impression that avg was normally skewed by extremely high balances & median should always be the lower value
??MGteam, when you state that a mortgage payment (should be at or below 25%) of gross income; does that mean Just principle and interest or principle, interest, taxes & insurance? Thanks are all the great advice, content and visual ads!
I’m about to enter my 40s. Was wondering if you could do a show for those in that age group.
Thank you @ 3:30 . I appreciate this over Dave Ramseys advice
Would you folks be able to provide consultation for Canada?
You folks are one of a kind and I love your advice/content. Looking forward to hear back from you.
The information here would still generally apply, just need to swap ROTH IRA and 401K to TFSA and RRSP. You could also likely get away with not being as aggressive in your savings rate given our better social programs.
After seeing this episode, it might be neat to see a graphic of what percentage the money you put in to your retirement savings in your 20s, your 30s, your 40s, etc., represents of your total retirement savings at age 65.
As someone who is 30 this video does interest me. But I feel like its gear for people who are married and have a family. What about those people who are not looking to follow this path necessarily? What should there investment strategy be?
Still applies, but you might be able to have a higher savings rate given you can have reduced costs (ie no children) though not having benefits of cost sharing of base expenses might reduce this amount. The numbers still work the same.
I'm not sure there's any youtube channel that I have taken more advice from. Their are tutorials I follow, once. And there are people doing things I can't afford. And there are people giving bad advice I watch to laugh at. But I have started doing net worth statements (just did it last night for the 3rd year in a row). The multiplier by age got me to start investing in a Roth instead of waiting for my finances to settle down. I tell people to "retire to" not "retire from".
Thanks Money Guy(s).
Hitting 50 soon. No kids. No home. Started working late. 25k student loans. 50k 401k. Hopefully I'll be okay.
Yikes. Family inheritance?
@JonathanRootD not planning to get any. I want my parents to live comfortably.
What the fuck were you doing? 😳
Glad to have this mindset early, i'm turning 25 in coming few days, having 100k net worth in stock and ETF and always keep bank account at 500 dollars
Choose to be poor for 10 years and millionaire for the rest
@Jake Low That's fantastic! Just make sure you keep an emergency fund for the inevitable surprise expenses. Otherwise you're doing amazing!
3:23 Eh maybe. Amoritization makes your total net worth really take a hit in the longrun. A $400k house has you paying an additional 550k in interest over time at a 6% rate so unless retirement is going to outpace that in the longrun it is better to pay it off VERY quickly and aggressively in only 3-4 years and at that point you've only paid 30ishk in interest which is much less and much more overall you can put into retirement in your life
What about saving 25% and being aggressive with the mortgage ? I’m in my late 30’s. Don’t have that much invested yet ( 120k ). I’m in Canada and have to renew my mortgage at the end of this year. Interest rates have gone way up. My plan was continue saving 25%, and pay off my mortgage this year ( 220k ) then be way more aggressive with investments (50%)
I wish we could break this down for military guys. I went from 18.5K a year to 41K a year in 6 years so its hard to calculate the 2.6 times your annual salary in the 401k my salary has more than doubled in a very short period of time compared to most
I was in the military. You would be surprised what your civilian equivalent income is. A lot of people think the military is paid poorly but that couldn't be farther from the truth. I am guessing you say 18k because that's when you were in the dorms but now you say 41k because you moved off base and have BAS and BAH.
Here is the trick. You always add in your benefits to their civilian equivalent. So even though you only made 18k in the beginning, you literally had zero bills. The military paid for housing and food among other bills. You could potentially invest 100% of your "income".
What you do is add back in your benefits. So look at what the BAH rate for your rank is. Look at the BAS. Even if you don't get them add them into your income. Now the military pays for your healthcare. Look for what it would cost for a decent healthcare plan. A good number to use as a single person would be $500 a month. So add that in. The military also has tuition assistance. People generally wouldn't treat it as income but I do so add back in that if you use it.
I did the math as an E-4 aircrew member in the Air Force and to have the same benefits and living standards as what I had as an E-4, I would have to make around 100k in the civilian world. Now I was Air crew and had extra pay in other ways like nonstop TDYs with crazy good peridium and a lot of deployments.. I would say the average E-4 would be around 60-70k. So if you were to completely invest about 17k, you would be hitting around 25% of your civilian income equivalent.
Most people in my squadron though would voluntarily deploy. They would breka their lease and cut off their phones. They would have zero bill as while deployed everything is covered. You are still paid BAH and BAS. So they would have around 50k in income and they would invest 100% of it. One of our pilots was never home but by the age of 30 he was already a multi millionaire.
@@zelrinth513 thank you we are on the same mind set the number I stated was just gross base pay. Actual numbers are 18K (in the barracks) now about 65K (with allowances not including health). I'm just trying to figure out how to factor my numbers given my base pay has gone from 18 to 45 in a very short period. By no means am I complaining about that I put in the work for it. When it comes to the striving for 2.6 times your annual salary in retirement. (Side note i didn't know much about investing earlier on in my career so i kinda short changed myself the first 5 years because my money was in the G fund and I didn't know what I didn't know)
I know some people will read your post and get that knowledge and thank you for putting that out there.
@@sk8thenp8nt What rank and years of service were you when you hit 65k? I’m about to graduate tech school and I’m hungry and ready to grind. Avionics.
And here I am watching this at 39 to add to the mid life crisis I have had since I was 24. lol
15:55 How has projected higher inflation affected this multiplier?
Hope I can retire comfortable. Net worth right now is about $141,000 (I am 34) This is a combination of my IRA, 401k, other savings, and the equity I have in my home
Yeah I agree.. 2.5% mortgage no point in hammering down when it's godlike payments.
Im 28! here early lol. investing 43% gross atm
I agree on everything except paying not off the mortgage. Is the compound interest more important than eliminating an $1800 mortgage payment being gone for the rest of your LIFE? Even if it is for most people, it’s not for me. I don’t plan on selling the house we built. I want to be prepared for the worst. Paying off my mortgage gives me peace of mind that if anything ever happens and I can’t work, I won’t be losing my house. That’s my personal opinion though. Love the money guy show!!!
POV: you’re in your 30s and this video speaks to you 😌
Does it ever make sense for military to use traditional? I don't even pay state tax and a lot of my income is untaxable allowances like for housing.
is 5.125% "low interest"? my mortgage is not cheap because 2022 was wild. i can afford it, but should i just keep saving or save some of that interest> where is the cutoff? if mortgages were like the 80s and were 15% would that be the same?
I make low 6 figures at early 30s and I still feel like I don't make enough since I want to pour more into dividend investment in the taxable after maxing roth ira. Investing is addicting man
Would be great if you all would make a video regarding HFEA (UPRO/TMF) risk parity leveraged portfolios.
When you say save 20-25% does that mean just in your 401k or is that 20-25% across the board (401k, IRA, etc.)?
Across the board. Some people like to save the max in an IRA first because there are usually a lot more investment options and then go back to the 401k to get to the 20-25%.
@@DJHesterman Thank you for taking the time to explain it.
Either way if you are actually saving that high of a percentage you will end up with way more in retirement that you are making now. At least using their rate of returns. You would do fine with way less.
Just rurned 30! Watched the money guy for years. I dont earn much, and I wish I saved more. Doing my best, but with working 7 days a week. Debt free, home is half paid off, 25% savings, but still feel behind.
You'll be in good shape in retirement starting at that age. I was in a similar situation to you with lower income. Nice thing is at your age you don't have to save as much.
Biggest challenge for me is I almost doubled my income from going from non profit management to IT recruiting. When something like that happens is the % of income saved still the same?
If you want to be twice as wealthy.
Yes. The logic is if you spend more now than you used to, you'll also need more to fund your expected lifestyle in retirement because your target has changed
Why is everything budget on a pretax basis? Like how much you should be investing and how much you should spend on your house?
Bo says a 36 year old can become a millionaire by 65 just by maxing out the Roth, but that's not nearly 20-25 % of probably most of our incomes. Am I understanding him correctly? Combining that with my work retirement, which I've been contributing 9%, I feel like this would replace my income or get me pretty close...
He's a little too optimistic here: Starting with $0 at 36, investing $500/month for 29 years, earning 10% annually, only gets you to $939,387.35. You'll need 1 more year (if the investment was linear in its returns). Note the 10% annual return: the s&p 500 historically returns this, but that ignores historical inflation of 3%/year, so to make sense of the future value of dollars, I'd lower the rate of return to 7% (10-3). So, while you would have $939k, it would have the purchasing power of $588k in today's money.
B&B
Question: Why do you use gross income vs take home when calculating things like retirement savings/home expenses/car expenses etc?
As always, love the content…can’t thank you enough for all you do for the community.
If the end goal is the same it doesn't matter which number you run. If it's gross it's a smaller percentage than if you used take home but reaches the same goal. But a lot of people, myself included, find it easier to use the take home pay.
Easier to remember $100K vs $78,623.47. Then when you factor in the savings % easier to visualize the number as 20% of $100K vs 27.8% of $78,623.47 (I just picked numbers so I know the math won't work but the point remains the same).
@@wolgercon But the same can be said with net income? With net income, I’m using real dollars that are in my pocket for calculations, not 25% of something that isn’t 100% mine.
If I get to 25% of my gross for my home and 25% of my gross for savings, the actual number is like 60-70% of my take home pay.
To each’s own, but I wanted to ask if they had a reason why. I’ll still use take home pay for my calculations since it’s easier imo.
Super late, but I think they use gross because tax rates will vary depending on incomes and other factors and your 401k will decrease this making it more complicated to get an easy target number with net. Like my wife and I save 40% with respect to our gross+company matches. This is how I calculate it cause I do full compensation vs how much saved irrelevant of other factors. If you calculate savings net with respect to net income then it doesn't matter. You will always skew something though cause of how some things are pretax and others are post tax. Just have to make sure it's consistent on what is being compared to to make sure you kind of know you are saving around the target percentage. I think that's the real idea behind it.
Thank you!
I’m 31, you guys speaks about Roth IRAs. Is that the way I should go over traditional 401ks?
When you say save 20-25% does that include employer match or just individual controbutions??
I include employer match in my calculations. It's real money and part of my total compensation package.
They say yes to include the match, as long as your income is less than 100k single or 200k married.
Hi guys. I am 38 and very lucky. I have about $389K in retirement savings, but my net worth is 1.6M. Most of net worth is in home equity (2 rentals). I also have about $130K in cash. Not your typical millionaire. But I also owe about $900K in mortgage debt…..ouch. Not sure if I am doing well… or need guidance lol.
So 3 properties minus 900k mortgages, plus $389k retirement equals $1.6M? If the two rental properties have positive cash flow considering the whole PITI payment and maintenance, then you're doing just fine.
@@Lucky008aau thanks Chris. I also have about $130K in cash. The properties do cash flow, but hate dealing with tenants lol.
I like Dave, and respect his acomplishments, but you guys offer a better approach wealth building.
You guys don't teach how build walls to stay on track, but actually teach technical and logical strategies to stay in track.
I never agreed on talking down to people to make them understand.
You guys make people realize the facts by using technical strategies that don't overwhelm, and takes people way farther.
Keep the great content.
When you say "low interest debt" do you mean ALL low interest debt (under 5%) or just your mortgage? I have 2 loans totalling about 21k both under 5% and I'm struggling with the idea of paying them off outright, working extra to make extra payments and not investing or just focus in investing and make regular payments for the next 3 years.
I'm 33 and that's my only debt outside of the mortgage. About 150k in retirement so far but I feel like I could be saving way more and maxing out my Roth.
Can I count my IUL contributions in my savings percentage calculation?
I don’t understand, if my 401k graduates to beyond target date retirement funds but my 401k only has appx 10 stocks options you would still spread it into large, med small cap international etc?
Is the 20-25% rule for long term savings? Or just in general? I'm putting 15% divided between my 401k match and my personal roth ira, then put more into my brokerage account for personal savings/investments. Should i be putting 20% total into my 401k/roth?
Please answer this simple question. In the 20-25% saving is the mortgage payment minus interest rates included or excluded?
And is it 20-25% of the salary before or after taxes?
Ive been living a rather ignorant life till 30, found the show and realized i can still invest and compound. Problem is ... i live in korea and the equivalent of a roth irs is a corrupt finacial sink hole... should i invest 25% of income into etf index or does it even matter where i put it?
Any plans to make an episode for young professionals? Little to no ability to save until 26-27, high debt, and subpar pay/room for growth (starting around ~100-110k)
Love the show. I wanted to inquire though, most of this analysis is based on 401k's and investment accounts. What about those of us with rentals? I think it's a good form of diversification but also harder to calculate as I've found it to be cash flow negative in the short to medium term while it will be a 3k a month pension upon retirement.
Happy new year y'all.
Anyone can invest in the stock market and its much more passive than real estate. Real Estate is an excellent investment but has additional risk due to bad tenants and cash flow problems especially in the early stages with the debt equity ration is over 50%.
Hello great question. I have 2 rentals and love the cash flow. They have also appreciated a ton. As I bought my first in 2010 and one in 2013. I didn’t cash flow as well at first, but have a significant amount of cash flow now with a lot more equity. However, I think it is still good to be diversified and invest in the market. I have a about $400K in the market, mostly retirement accounts.
Hey Brian and Bo
Which is better Roth IRA with Vanguard or Ally??
We don’t make product recommendations on the show. However, we have mentioned that Vanguard is an industry leader in index target retirement funds. Meanwhile, Ally is know for their cash management and FDIC cash reserves options. That should be enough information to help you connect the dots 👍
unfortunately, the parents here in my country default to having their children as retirement plan.
2.6 х annual income saved by 40? For a married couple, is it household income or individually?
Im 34, I put 7 % into my 401k and my job matches me 2 to 1 does that mean I'm already at 21% savings? I make 90k a year. I also have been maxing my roth the last 2 years.
Yes, they say to include employer matching if your income is less than 100k single, 200k married. Dang, 2 to 1, that's awesome. I've never heard it that good.
I want to invest 20-25% but I also want to save for emergency savings, save for house, and pay off debts. How can I do this? while also affording incredibly high rent which is rising all across the US?
Yep. That’s what I’m wondering. My husband and I get $75k/y, we have NO debt at this point, we have an emergency fund, and I’m still trying to make all the numbers work. We don’t go on fancy vacations (we saved $2k for a road trip with attractions, and that’s what we did this year). We really watch the food budget. We’re putting 15% towards retirement. I don’t know how we’re going to increase our retirement fund (which we really need to; we didn’t start really saving until a year ago, and we’re 33 and 35), afford our current place, save for a house which will be crazy expensive in this market, and afford regular living expenses.
@@oatmealtruck7811 ideally, this is where you both would find ways to increase your income...assess skills; upskill; get overtime; second and third jobs for a temporary time...
While you may not be able to do it all...I recommend prioritizing.
This is where Dave Ramsey's baby steps would be greatly beneficial.
This may require a delay in saving for a house (honestly, you don't want unnecessary debt when purchasing a home anyway...at that point, you'll want to have a nice savings for maintenance and unexpected house expenses).
Wish you well in your journey!
Im 29, turning 30 in February. Renting, no spouse/SO, no kids.
Anyone knows what is FOO? I think I missed it somewhere
Exactly. When your mortgage is 2% and you aren't in your 20s anymore, you don't need to pay it down faster when you need to prioritize roth IRA.
What if you have over 5% interest with the new hikes ?
agree on this one retire early save 20% to 25% on a 401k it lowers your tax base too !! ,yea your not buying crap all the time but later in life you don't need to ask your family for help .Saving 20% is hard I use to think 15% was tops did go over to 22% for a brief time .
It crazy what the expected age to buy a home in 2024 is now vs when this video was released!
glad I paid off my mortgage in Feb instead of throwing it into stocks when I had the choice. Funds since that day have all been averaging in. There's not a right answer to any of this, and not paying off debt because of low interest rate, doesn't account for RISK. Fan of the channel, just a comment as this popped up today and i'm reflecting on the losses I would have had vs the debt I paid off. Take care,
What is that "Accumulator of wealth" number? Is that at age 40? I heard the word "per year" said... I'm totally lost as to what that number means
Holy costume changes batman!
I have a question, Im in my 30ies, can I count the principal down payment on my morgage per month of my rental property as a 'savings'? Since it does increase my net worth as I own more and more of that rental property.
It counts towards your net worth, but not towards your savings. Your home will of course build increasing equity over the years, but you want to look at liquid investments for your savings rate. Liquid investments are what will generate you income and sustain your retirement. Eg. at 65 would you rather have $1M in cash and $0 Equity or $0 in cash and $1M equity?
As a South African our mortgage is 6% and that is a great deal compared to some of the other things we are exposed to. Does that still count as low interest debt? Or should we be attacking it
Do you have debt with higher interest rates? I'd attack my debts in order from highest to lowest interest rate. Mathematicaly it should be the most sensible thing to do.
@@HughMirin-Bruh No we keep ourselves out of debt. I guess it is the choice between investing and try to get more than 6% or getting out of the debt early. I know TMG often say don't pay off the mortgage but they often speak of them as 3/4% which is quiet different. If we do pay it off quicker we would definitely make sure we have a decent amount saved up incase we find ourselves in trouble
Well, it is a low risk way for some guaranteed return on investmemt. It all depends on a lot of factors. How much risk are you willing to take on for extra return for example.
I have a mortgage against ~1% interest (Europe), 30 y.o., willing to invest in other assets and have no other debt. This same question is a no-brainer for me.
For you, the expected return when investing in a broad market compared to the guaranteed return of your mortgage isn't that obvious. I can imagine you're doubting a bit.
You're on the right path anyway, from what I've read. It'd only be a minor improvement if any...
Hope its of any help to you, even when I'm not really pointing you in any direction. Wishing you all the best :)
Thank you! Have a good holiday season.
I think you are right, stick on the path and keep investing and paying the mortgage. We will get there