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Retire a Millionaire

itallushrt

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Adding on to what Jwrussell has already said...


Im 28.

My company offers a 401k. They 100% match my contribution up to 5%.
START NOW!!!!!!!! Since your company offers a 401k there is no doubt there is some financial guidance that comes along with it (through the company handling your account). Talk to them! It is more than likely free. More than likely they are going to put your funds into a long term growth fund (read...big companies not going anywhere, they grow slow, but they grow!). Retirement goals are more like a marathon and not a 100 yard dash.

My company offers a 401k. They 100% match my contribution up to 5%.
Just like Jwrussell said ... take advantage! What is your fully vested date? The answer to that question may influence your decision to stay or leave the company at some point in the future.

But man the guys that had a lot of $ in there in 2008 lost a crap load.
Read above...marathon vs. 100 yard dash. Also, everyones definition of "a crap load" is a lot different. A crap load to one guy could be $500 and $50,000 to another. Don't let them scare you.

Or look at it this way ... what is your current savings strategy? A can buried in the back yard? "Managing" your checking account and leaving a few dollars left over each month? Sure you aren't "losing" anything to a falling market, but you aren't building anything either. (See the link above I posted about compound interest).

Is a Roth IRA less fluctuating the a 401k?
See above about talking to a financial advisor provided by whom ever is providing account services for your employer. A Roth IRA allows your money to grow tax free since it is POST TAX dollars. This is w/o a doubt the best investment a guy make outside of automatic weapons (seriously! their value has increased 10 fold in the last 10 - 12 years). Your money grows tax free since you have already paid taxes on the money put in to it. However, you need a solid strategy that meets YOUR long term financial goals. As a young man I'd be investing the max allowed in each ... even if it means cutting back on luxury items you enjoy now (not fully, but within reason).

That's kind of my big question. What's the best way to contribute my $?
See above again. We are not privy to your personal financial position. This is best discussed with a professional. Be very frank with them about where you are and where you wish to be. Have them explain the risk vs. reward. Also have them explain the nomenclature of the industry. If you don't understand what they are telling you ask them to. If they do not ... leave or ask for someone else (in their firm) to explain it to you.
 
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I am 30, and I have a retirement savings of about 33K at this point. If it increases 7% yearly, I will hit 1.25 million. That a big if. I am pretty sure its not on track for that, as I have been investing more than the $320 a month after employer contributions. I have also heard horror stories where peoples 401k turned to shit right before they were looking to retire. I guess if the market is doing well, you have seen a good return, and are approaching retirement age, it would be wise to move your funds into more stable options.

I also have a good chunk of savings that is only seeing 1.5% returns. After the wedding, that account will have dwindled. We are paying for it all ourselves. Once it gets back to a decent amount, I will keep some for emergency, and tie the rest up in something that will see a better return.

In other news, my home has dropped 21k since September.

I suppose its also worth noting that they match half up to 6%, so I take out 6% for the 401k.
 

Cigar Cowboy

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Well It is scary right now with a President who is printing money. That devalues the dollar. We will also be in big trouble if our credit rating is lowered. This is why we need to get our nations debt under control.

This is why precious metals are doing so well.

I don't want to panic everyone, but in 20 years when I retire, one million dollars will not be worth much. I am on track to have at least 5 million when I retire.

You need to find out what is right for you and your family.
 
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Jwrussell

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I am 30, and I have a retirement savings of about 33K at this point. If it increases 7% yearly, I will hit 1.25 million. That a big if. I am pretty sure its not on track for that, as I have been investing more than the $320 a month after employer contributions. I have also heard horror stories where peoples 401k turned to shit right before they were looking to retire. I guess if the market is doing well, you have seen a good return, and are approaching retirement age, it would be wise to move your funds into more stable options.
No ifs about it, bro'. And it's not just "approaching retirement age" as in, "Oh, hey, I'm 60, maybe I should ease up on the risk..." You should really be adjusting your retirement account throughout the time you are working. I would say at a minimum, every 10 years you should look at your account and readjust depending on:

  • How old you are.
  • How long you have until retirement.
  • Your individual risk-quotient (how much risk are you willing to take?).
If you start when you are in your early 20's, you probably don't need to worry about things until you are closing in on 40. The earlier you start, the earlier you might start looking to move things into a more secure investment. If you start later, well, it depends on what you need in retirement and how much risk you are willing to take to get it. Sure, you can start late and not go risky, but you'll be stuck with a much smaller nest egg in the end.

One good rule of thumb I've seen is this: take your age and subract it from 90. That is how much of your investment should be in stocks (higher risk).

Messiah said:
I also have a good chunk of savings that is only seeing 1.5% returns. After the wedding, that account will have dwindled. We are paying for it all ourselves. Once it gets back to a decent amount, I will keep some for emergency, and tie the rest up in something that will see a better return.
Sounds like an emergency fund. Another piece of savings everyone should have. :thumbsup:

Messiah said:
In other news, my home has dropped 21k since September.
Yep. Sucks. I have a feeling you'll see more people staying in homes longer to attempt to recoup losses or at least get back to even. On the plus side I saw something today that said the inventory of homes (can't remember if it said new or used or both) was at a historic low. Good news regardless.
 
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Yep. Sucks. I have a feeling you'll see more people staying in homes longer to attempt to recoup losses or at least get back to even. On the plus side I saw something today that said the inventory of homes (can't remember if it said new or used or both) was at a historic low. Good news regardless.
I don't really know much about the market, but wouldn't a lack of sales only make things worse?

To make matters worse, I was actually up a grand according to Zillow in September, about a year after I bought the place. I thought maybe the price drops were done. I guess not. Its down almost 9% since.
 

Jwrussell

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INVENTORY, not sales. Inventory being low means there are not a lot of houses available. That's what we want, inventory to go down so that prices start heading back up.

Here you go:

Builders have kept construction low as sales have been soft. The number of new homes for sale at the end of March was down slightly to 183,000, the lowest inventory level since August 1967. Still, due to the slow sales pace, that supply would take 7.3 months to deplete. A six-month supply of new homes is considered healthy. The supply in February was 8.2 months.
So yeah, even though the inventory news is positive, the sales news still sucks. And this is new homes only. The biggy is existing homes and foreclosures and such.
 

Cigar Cowboy

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Only if you are upside down. I bought my home 15 years ago. I am fine. If I could find a nice foreclosure in Ventura or Santa Barbara close to the beach, I would move in a second. I have been looking, just not very seriously.
 

Jwrussell

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OK, I don't want to pull the thread to much farther off track here, but I'm not sure we are on the same page, because I'm lost, lol. I'm not sure how the two relate? I was just saying that home owners are going to be stuck with their homes for longer than they might otherwise be because of the down market. Some will of course dump and take the loss; some will cut out and let the banks foreclose, but for those who stick with their homes, they will have to stay with the home longer than they might have otherwise needed to.

I hope some of that helps to clear things up and that I'm making sense.

Personally, and not worth the money you spent to read it, my opinion is that we are bouncing along the bottom, waiting to head back up when it comes to the housing market, at least in my area.
 
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Great post. I work in the investments/finance field and there are a lot of people out there that need to see stats like that.

Start young and put away as much as you can. Diversify. Buy when others are afraid to (or as Warren Buffet put it, get greedy when others are scared).

And if a company you work for has a matching incentive in their 401k. . .you MUST contribute up to at least the point to get the full benefit of the match. It's a 100% return right off the bat.
 
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I'm in need of this actually.
Maybe some can help...

My dad have me this info(from cc) few years ago which has my wondering what's the best vehicle for my retirement $.

Im 28.

My company offers a 401k. They 100% match my contribution up to 5%. But man the guys that had a lot of $ in there in 2008 lost a crap load. Is a Roth IRA less fluctuating the a 401k?
That's kind of my big question. What's the best way to contribute my $?
Also, as appealing as "free money" is, I'm not sure I like the ideas of all my eggs in one basket(company){income/employment, healthcare plan, and retirement account). My company and job title is in an industry which is changing very quickly and the future is unknown. The company will be around forever, just not sure how it all looks.

The roth IRA can fluctuate as much as the 401k. It is all market based. Your employer contributions has nothing to do with the company you work for(I mean you are not invested in the company but a set of mutual funds, stocks, and bonds designated by you). You need to watch the market if you are going to invest, plain and simple. The losses from 2008 were easily avoided if you just paid attention. I advised my family during the economic turn down to switch out of mutual funds and stocks in their 401k and put all their money in low yield bonds. My family did that and lossed 2-3% from 2007 to 2009. That beats the shit out of losing 30-50% of your invested money. I am young (27 yrs old) and I am very agressive in investing and carry 401k, 403B, Roth IRA, and a personal cash stock account. The 401k, 403B, and Roth are accounts for long term investing and i use the cash account to take advantage of investment opportunities that could make me money quickly in the stock market. But starting now at 28 would be a good time to start,especially with employer contributions.
 

iCraig

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A good look at the hard, ugly truth. The numbers are doable for the 25 year old. If you are making $32K or more it's 10% or less. Once you start hitting the 35 year old mark you better be in the $60K/year range and it's still going to hurt like hell. $775/month? That's over 15% you need to be socking away into your 401K. Age 45? Might as well forget about it...either that or you probably don't really need to be worried. Because to put away that kind of money you first need to be figuring a way to put money away above and beyond the 401K Max (16,500) because that's 22,200 over the course of the year.

The biggest step is actually getting into the 401K in the first place. I remember practically brow-beating a younger co-worker a few years back to do it. Even if you need to start with a small percentage, just do it. And once you've done, set up your account to automatically increase your deductions by 1% every 6 months until you are contributing 10% (or more). It's amazing how little you miss that 1% of pre-tax dollars. Most of us live up to our means. If our means are 30K, that's pretty much what we spend. If they are 35K, same deal. Better the money not be there and be going into savings. It's much harder to cut back to start saving than it is to simply learn to live withing a set number to start with.


That's exactly what I did. When I started at my current company, I got into the 401k right away. I started at 4% and the company matched 50%. Now I'm up to 6% (increasing once per year by 1%) and my company matches me 75%. In a couple more years here they match 100% of my contribution up to (I think) 10%.

It's money I never see and thus I live within my means without it.
 

jjon90

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Anyone here lucky enough to work for an employer that still matches your retirement contributions?
 
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Put away money for bear markets because that is the prime opportunity to buy stocks. I cleaned house right after the recession when everybody else was selling everything they had, I was buying everything I could get my hands on. AIG, Ford, BofA, Citi, Marathon Oil, Halliburton, and many others I invested in for record low prices.

Even disasters provide prime opportunities for investing. The BP oil spill was a prime example to invest in almost any oil related company. Speculation and fear drove down prices and oil stocks could be bought for deep discounts and heavy profits.

So ya'll young guys need to learn to keep around money for investment opportunities. In times of war and disasters research those that will benefit and invest. There are opportunities everywhere but most people don't care to do the research or take the time to pick a newspaper and find out what is going on in the world.

One tip,.........natural gas.
 
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I advised my family during the economic turn down to switch out of mutual funds and stocks in their 401k and put all their money in low yield bonds. My family did that and lossed 2-3% from 2007 to 2009. That beats the shit out of losing 30-50% of your invested money.
I lost 45% during that time and now I am up 25% over what I had + contributions by staying in and buying low. Where is your family at with the low yield bonds?

The point here is do not sell when the market is tanking keep buying, unless you can sell right at the top and buy again at the bottom (unlikley) or you do not have enough time to recover......

Like you said, they only lost 2-3% but they missed out on some serious gains so really they lost a lot more.......
 
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I lost 45% during that time and now I am up 25% over what I had + contributions by staying in and buying low. Where is your family at with the low yield bonds?

The point here is do not sell when the market is tanking keep buying, unless you can sell right at the top and buy again at the bottom (unlikley) or you do not have enough time to recover......

Like you said, they only lost 2-3% but they missed out on some serious gains so really they lost a lot more.......
They didn't miss out on anything and returned huge profits during the economic upswing. By switching to low yield bonds was just a way to bear the brunt force until the economy made its way through the recession and then my family continued to do business as usual and switched their investments back to what they were before the recession. My parents and family don't dabble with their retirement accounts as much as i do, I change my contributions once to twice a year if i need to. Currently switched today to more bonds to get ready for another possible hit when the US defaults on their loans. Switched some to mutual funds that deal more in commodities like gold and silver. I am getting big into investing in natural gas. Look to ConocoPhillips, and Chevron to make good profits in the future because they are well balanced between natural gas and oil. I got alot of my money invested in the Russian company Gazprom which the single largest holder of natural gas in the world and have a strangle hold over the supply in Europe.
 
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I had to jump in here with a couple of thoughts...

I got turned on to stocks that have consistent long-term growth increases this past year. Not worrying about the market and just relaxing and buying month-to-month or quarterly or what have you gives me peace of mind knowing that the interest on gains is compounding like crazy over the long term. You can pm me and I will tell you what I buy.
Also, I also invest in companies that offer a high dividend and that also have a DRIP(Dividend Re-Investment Program) and Direct Stock Purchase Program. Some great, time-tested companies offer all three in the same stock. For instance:
I can buy Company X directly from their transfer agent simply by doing a search and finding which transfer agent handles the company I am looking for. The days of buying Company X stock directly from their headquarters is over so Company X has a transfer agent handle all of their stock transactions. Don't let the term 'agent' fool you. This is a company that simply handles the stock transactions for Company X and they pay the 'agent' for their services- not you...You set up an account with the transfer agent and then you buy stock directly through them...So if you set-up an account and choose a company that offers a dividend, which is a nice little cash gift given to you for each stock you own- paid quarterly, annually, etc., chances are that very same company offers a DRIP so when you get your dividends in your account, they automatically purchase more stocks for you.
I have my accounts set-up with a few blue chips where on the 1st, 15, and/or 30th of every month the transfer agent pulls money directly from my checking account to purchase stocks- say $100 of Company X every 1st of the month, etc. etc. $100 of Company Y on the 15th- however I want to set it up.

Benefits-

1- The purchase of the stocks is very cheap- about 1.00 per trade
2- There are no fees or commissions
3- The dividends get re-invested
4- The money comes right out of your account- if you so choose- so you never feel it
5- The stocks are bought in low times, high times and everything in between so if the market is down you are purchasing more shares. The market will come back up, as we see in today's market.
6- The pile grows and grows and grows....

Hope this helps someone. Any financial pros feel free to correct me if I f'ed anything up.
 
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