Do you save money?

[UK ALUM10]

I am a young version of PTI:

10% into the work 403(b) - Already have over 50K in just 6 years. Compound interest is cool.
$0 in debt (not counting mortgage) - Paid off my car in 4 years. Just through everything I had at it. ($25K car)
Just became a homeowner in January and have already made 1 extra payment.
Keep 10K in savings

Started at 23 (currently 29).

I rented with roommates for 10 years and saved my cash.

I also am single and have 0 desire to have kids.

My first job paid $22,000 a year so it's sad people using salary ranges as an excuse to not save. I paid off $11,000 in student loans in 2 years with that salary.

 

[BankerCat12]

Thew newest get rich plot (LOL) is to buy land near Saratoga NY. There's a ~5 mile lake 10 minutes from town that's starting to grow. Most houses are out of range, but some aren't because of being in a different township. The lake is cut by like 3-4 different cities/villages. Saratoga NY can hold it's own against most cities in the nation. Huge restaurant/bar scene and the money that flows through there is silly. It's boom town right now, and the rental rates for the 8-week track season would be big.

The reason this is so appealing to me, is that I grew up on lakes. For me, it's better than the beach (part because it's not 3-4 hours away). Having a house on the lake, with beach and dock rights, that I can rent out for side money, would be a sweet deal.

Still, the Duplex seems safer, even if it's more boring. Duplexs in Albany (half hour south of Saratoga) start at ~175k. one unit could garner $900-1200/month in rent. But taxes are high.

It might be boring but I think the duplex is the way to go. I would maybe go in 50/50 with someone you know and trust on the lakehouse airbnb once you have the duplex life under control and feel comfortable. Let someone else pay for you to live in the duplex and pay your principle down. This will get your feet wet in the real estate world and who knows, 5 years from now you could have a couple places. Boring beats the possibility of losing money imo.

 

[BankerCat12]

My wife and I both max out our 401K and HSA each year. She just recently cut back on the HSA bc she has over $18,000 in her account.

We have two girls and I have 2 single family residences for each of them as their college funding. We were both lucky to have college paid for by our parents and I want to do the same for them. I do not want to sell these when they go to college but take the monthly rent and use that towards tuition if they are like me and do not get any scholly money. Also have a duplex that I can use for additional income if needed. I have not set up a 529 plan for this reason. I would rather have their school paid by RE.

This past year is the first time my wife and I had to pay taxes in April. Next year is going to be even worse. I have been paying down our current mortgage very aggressively the last few years and we only owe $93k on it now. Going back and forth on paying it off and one of the investment properties with cash in bank but I need any deduction I can after this past year. I hate debt but really hate paying the IRS extra $$$ after I see what they take from my paycheck.

 

[backbeatcat_rivals376595]

I am a young version of PTI:

10% into the work 403(b) - Already have over 50K in just 6 years. Compound interest is cool.
$0 in debt (not counting mortgage) - Paid off my car in 4 years. Just through everything I had at it. ($25K car)
Just became a homeowner in January and have already made 1 extra payment.
Keep 10K in savings

Started at 23 (currently 29).

I rented with roommates for 10 years and saved my cash.

I also am single and have 0 desire to have kids.

My first job paid $22,000 a year so it's sad people using salary ranges as an excuse to not save. I paid off $11,000 in student loans in 2 years with that salary.

Compound interest and the Bull Market of the Gods is certainly cool. It started about the time you started investing. Adjust future expectations accordingly. Nice work!

 

[kevcat]

35% of my Wife's and my take home pay go straight into our 401k.

We've done that for 20 years now.

 

[kevcat]

I am a young version of PTI:

10% into the work 403(b) - Already have over 50K in just 6 years. Compound interest is cool.
$0 in debt (not counting mortgage) - Paid off my car in 4 years. Just through everything I had at it. ($25K car)
Just became a homeowner in January and have already made 1 extra payment.
Keep 10K in savings

Started at 23 (currently 29).

I rented with roommates for 10 years and saved my cash.

I also am single and have 0 desire to have kids.

My first job paid $22,000 a year so it's sad people using salary ranges as an excuse to not save. I paid off $11,000 in student loans in 2 years with that salary.

Awesome. I wish more people were as responsible as you.
I'm tired of my tax money paying for irresponsible pieces of trash.

 

[jameslee32]

10% into 401k
Max out IRA
Aggressively pay off mortgage
Keep a nice balance in savings

Started at 23.

Also, I'm incredibly selfish and don't want kids or a spouse. That's the real key.

[thumb2] But marriage is also an easy way towards wealth creation.

 

[jameslee32]

35% of my Wife's and my take home pay go straight into our 401k.

We've done that for 20 years now.

Awesome! Only one suggestion after a great start. Now fund the 401k only up to the company match. Use the rest of that 35% on an IRA or two. Fewer fees and more choices is my experience.

 

[LineSkiCat14]

It might be boring but I think the duplex is the way to go. I would maybe go in 50/50 with someone you know and trust on the lakehouse airbnb once you have the duplex life under control and feel comfortable. Let someone else pay for you to live in the duplex and pay your principle down. This will get your feet wet in the real estate world and who knows, 5 years from now you could have a couple places. Boring beats the possibility of losing money imo.

It's the safer bet. I know it, and everyone I ask knows it. I guess it would be more work, as you have year-round tenants. But most of these places, if half is rented out, would enable you to "live" for under $500/month. That includes taxes and other fees like garbage removal, etc. I'm sure there may be a feww I'm missing.

Duplexes that are in move-in shape, go from $175k to $250k. two units, either 2 or 3br each. A 2br rents for $900-$1100 and a 3br rents from $1100-$1300. So the numbers there are nice. The problem is taxes. For my area it could be anywhere from $5k to $9k a year.

Having someone else pay for your equity is nice. Pocket extra money and save it because at some point you'll have to repair something in or on the house.

 

[Anon1640710541]

I have no idea, I think a little. I could give two ***** about saving right now and have no interest in being a wealthy 80 year old, would rather just enjoy my money now when me and my wife are young and can actually do interesting **** we'll remember for the rest of our lives.

This is completely pathetic.

Being financially responsible allows you to enjoy money every single day. Lack of stress. Ability to change careers. Take risks. Avoid catastrophes like bankruptcy in divorce. Etc.

You don't have to be a miser to spend less than you make. Buying clothes on sale, three year old automobiles, eating out less.

When you're 80 and broke, you won't be able to work. The rest of us will have choices, and long before 80.

 

[AlbanyWildCat]

Duplexes that are in move-in shape, go from $175k to $250k. two units, either 2 or 3br each. A 2br rents for $900-$1100 and a 3br rents from $1100-$1300. So the numbers there are nice. The problem is taxes. For my area it could be anywhere from $5k to $9k a year.

3br in the good part of town go for $1500.
Best get yourself one soon...

 

[AlbanyWildCat]

My wife and I both max out our 401K and HSA each year. She just recently cut back on the HSA bc she has over $18,000 in her account.

We have two girls and I have 2 single family residences for each of them as their college funding. We were both lucky to have college paid for by our parents and I want to do the same for them. I do not want to sell these when they go to college but take the monthly rent and use that towards tuition if they are like me and do not get any scholly money. Also have a duplex that I can use for additional income if needed. I have not set up a 529 plan for this reason. I would rather have their school paid by RE.

This past year is the first time my wife and I had to pay taxes in April. Next year is going to be even worse. I have been paying down our current mortgage very aggressively the last few years and we only owe $93k on it now. Going back and forth on paying it off and one of the investment properties with cash in bank but I need any deduction I can after this past year. I hate debt but really hate paying the IRS extra $$$ after I see what they take from my paycheck.

Doing the same thing...purchasing investment properties and will use them to pay for my kids to go through school. 529 sounds like a PIA.

 

[awf]

We put money in a HSA we also have a 401K that is a little over 5 times our annual income.

 

[krazykats]

I put back 10% into are 401K and my company just started a match of 25% of the 10%. They always did a profit sharing which is just a one time a year payment to our 401K.

That doesn't vest fully until 5 years in, but I'm already over 12K before any vested amount in only a year and a half.

I had close to 30K save in my 20's but I took the hit to withdraw it and tried a business for myself and had the wrong person around me so I lost it all pretty much.

During all that time I at least paid an extra $100 a month on the mortgage to at least be putting some extra somewhere. I took out a 100% loan in 2005 and have paid it down to where there is at least 40K in equity now.

Should be in a lot better shape, but a wife and 3 kids and 1 really bad business decision and I am where I am.

 

[kevcat]

Awesome! Only one suggestion after a great start. Now fund the 401k only up to the company match. Use the rest of that 35% on an IRA or two. Fewer fees and more choices is my experience.

No doubt. Totally agree.

 

[Ron Mehico]

Sounds great guys, we'll reconvene in 40 years and see who's right, in the meantime I have to start packing for a fun weekend getaway tomorrow with my young jewelry adorned wife, have fun with the 401ks!

 

[CatOfDaVille]

No doubt. Totally agree.

That's all well and good if you're putting less than 10k in retirement each year.

Max annual for IRA is 5500, but you can put 18.5k in a 401k.

Just don't invest in the managed funds (2035 fund, 2040 fund, etc.) If your company offers it, put 80% in a S&P 500 fund. Low cost and goes as the market goes...which means over time it goes up and up. For safety put 10% min in a low cost international fund and 10% in an income fund.

As you get closer to retirement, increase the % of the "safe" funds and decrease the others.

Anybody with a little sense can manage a good retirement portfolio.

Also, split between Roth and traditional.

 

[UKGrad93]

If ignore weren't for needing to raise my kid, I would seriously consider selling the house, quitting work and moving to somewhere in South America or the Caribbean.

 

[UKserialkiller]

Awesome! Only one suggestion after a great start. Now fund the 401k only up to the company match. Use the rest of that 35% on an IRA or two. Fewer fees and more choices is my experience.

Not if Trump steals it all. He's gonna gitchee.

 

[IdaCat]

I'm heavy into an S&P fund for my age, but I'm thinking of letting it ride a little longer and then go safer. Another year like the last and I'll be very happy. You never know, but from all I've heard, the bulls are expected to keep running.

 

[jameslee32]

That's all well and good if you're putting less than 10k in retirement each year.

Max annual for IRA is 5500, but you can put 18.5k in a 401k.

Just don't invest in the managed funds (2035 fund, 2040 fund, etc.) If your company offers it, put 80% in a S&P 500 fund. Low cost and goes as the market goes...which means over time it goes up and up. For safety put 10% min in a low cost international fund and 10% in an income fund.

As you get closer to retirement, increase the % of the "safe" funds and decrease the others.

Anybody with a little sense can manage a good retirement portfolio.

Also, split between Roth and traditional.

Yup. More than one IRA is available and more than one person, if married, to open IRA's. Double your pleasure, double your compounding. But other than lower fees, the real beauty is that an IRA can consist of more than just mutual funds.

 

[jameslee32]

Also, split between Roth and traditional.

Sure. I have a buddy who tried to inform me that going the Roth ONLY route was the best way to go. I tried but failed to convince him that not a penny of his IRA taxes was deferred. So in essence, he's paying higher taxes in his working years instead of lower taxes in retirement. At least he started early so he has that going for him.

 

[Get Buckets]

Sure. I have a buddy who tried to inform me that going the Roth ONLY route was the best way to go. I tried but failed to convince him that not a penny of his IRA taxes was deferred. So in essence, he's paying higher taxes in his working years instead of lower taxes in retirement. At least he started early so he has that going for him.

Well the growth is tax deferred. I personally believe in Roth at the moment bc I believe I am at the lowest rate I'll ever be at.

 

[LineSkiCat14]

3br in the good part of town go for $1500.
Best get yourself one soon...

It's funny, i was thinking i shot a bit low on my prices for rent. Some 3brs are in that range. Some even more.

They go so damn fast though. I looked at half a dozen this spring.. They all had something substantial that needed work. One had a bad foundation. One had a porch pulling off the house. Another had an entire apartment that needed to be firebombed.

And every single one was gone in a week. They hsd offers the minute they were listed. That's how you know it's a smart buy.

 

[jameslee32]

Well the growth is tax deferred. I personally believe in Roth at the moment bc I believe I am at the lowest rate I'll ever be at.

How can it be lower than in retirement? It's been a tax race to the bottom for 40 years as well.

I believe in both. There's a rule of thumb to max out the IRA before contributing to a Roth but a Roth is also good for exactly the reason you mention. Especially if you start young, in your 20's or early 30's.

 

[Get Buckets]

How can it be lower than in retirement? It's been a tax race to the bottom for 40 years as well.

Speaking for me personally. I think even at retirement age I'll be in a max tax bracket which is higher than where I'm at now.

 

[jameslee32]

Speaking for me personally. I think even at retirement age I'll be in a max tax bracket which is higher than where I'm at now.

Quality problem for sure.

 

[CatOfDaVille]

Speaking for me personally. I think even at retirement age I'll be in a max tax bracket which is higher than where I'm at now.

Why guess? Do both and you're good either way.

 

[vhcat70]

For those of you saving for the future, here's a great site:

http://www.early-retirement.org/

Us, we're done saving & are living off the rest of you.

 

[AustinTXCat]

Great thread, y'all. Love the real estate plays.

9.5% mandatory into the state pension program.
1% into 401K
1% (roughly) into existing IRAs.
1% into savings accounts

Projecting 3.5K / month upon retirement in 4 years at age 59 1/2, before Social Security kicks in. I began seriously investing at age 30. Lost my *** on a few investments in the financial sector (regional banks) back in '08. Plan on developing more income streams between now and then. Lots of opportunity still out there.

Best of luck to you all.

 

[LineSkiCat14]

Someone here mentioned that I was putting too much into Savings, that is nothing more than a holding spot. I kind of want to pull back a bit to start paying down a bit of my CC debt. But if I wanted to put my savings into something that actually yields interest, what are my options? The goal is to save 15-20k, most likely for a down payment on a house.

If I don't use a savings account, what can I use that's fairly liquid? What do people use for a non-retirement savings, for the purpose of a short to medium-term investment?

 

[BankerCat12]

Sounds great guys, we'll reconvene in 40 years and see who's right, in the meantime I have to start packing for a fun weekend getaway tomorrow with my young jewelry adorned wife, have fun with the 401ks!

You won't be able to afford the interweb in 40yrs since you aren't saving. If you can, your *** is still working.

 

[BankerCat12]

Someone here mentioned that I was putting too much into Savings, that is nothing more than a holding spot. I kind of want to pull back a bit to start paying down a bit of my CC debt. But if I wanted to put my savings into something that actually yields interest, what are my options? The goal is to save 15-20k, most likely for a down payment on a house.

If I don't use a savings account, what can I use that's fairly liquid? What do people use for a non-retirement savings, for the purpose of a short to medium-term investment?

Pay down credit card debt? Get rid of that instead of saving.

 

[LineSkiCat14]

Pay down credit card debt? Get rid of that instead of saving.

I know. It's my one fault. The only reason I'm not paying it down is because I need all the savings I can get. The housing market will level out in a year or two, but ideally, I want to be ready to go by next May, and I'd really like to have 15-20k, or more, ready to go for a Duplex. I worry if I focus on small debt payment (under 3k), I may come up short. Duplexes are VERY hard to come by, so I need to have finances ready.

What I will probably do anyways, is pull my savings back a bit, and use it to whittle down the debt. Still, though, what's my alternative for a savings account. If you have 10k now, and what it to grow a bit.. Mutual/Index funds for a few years?

 

[vhcat70]

Someone here mentioned that I was putting too much into Savings, that is nothing more than a holding spot. I kind of want to pull back a bit to start paying down a bit of my CC debt. But if I wanted to put my savings into something that actually yields interest, what are my options? The goal is to save 15-20k, most likely for a down payment on a house.

If I don't use a savings account, what can I use that's fairly liquid? What do people use for a non-retirement savings, for the purpose of a short to medium-term investment?

You pay 10-25% annual interest rate on cc debt. No way you find more the 5% annual earnings on savings & that's probably a big exaggeration.

Net, you're losing 5-20% interest per year on any cc debt you keep. How does that help you save more at all? Answer: The cc debt a huge drag on you net savings that you need to stop first. Get over that your savings look smaller w/o the cc debt. In reality, you're way ahead. Ask Dave Ramsey.

 

[DSmith21]

Reading a lot of posts where people are contributing to a 401k and a Traditional IRA at the same time. That is fine as long as you and your wife don't make a combined $119,000 (modified adjusted gross income) or more. If you do make that, the IRA contribution is not tax deductible. It is only partially deductible from $99,000 to $119,000. In that case, other investments might be better options than IRAs.

https://www.irs.gov/retirement-plan...-you-are-covered-by-a-retirement-plan-at-work

 

[UKGrad93]

I use a Roth IRA.

I also contribute % of may salary to a supplemental retirement plan(SRA) through work. I'm not sure what the income limit on the SRA is, but you can contribute up to $18k. We have options for a traditional SRA or a Roth SRA.

 

[LineSkiCat14]

You pay 10-25% annual interest rate on cc debt. No way you find more the 5% annual earnings on savings & that's probably a big exaggeration.

Net, you're losing 5-20% interest per year on any cc debt you keep. How does that help you save more at all? Answer: The cc debt a huge drag on you net savings that you need to stop first. Get over that your savings look smaller w/o the cc debt. In reality, you're way ahead. Ask Dave Ramsey.

I guess my thought was, get a duplex, and by renting out half, I would negate a lot of living expenses. That plus the write-offs, I could then easily pay down debt. But that's probably not the right way to go about it. Probably putting too much emphasis on saving, while CC interest hits me for $20-30 a month.

 

[LineSkiCat14]

Reading a lot of posts where people are contributing to a 401k and a Traditional IRA at the same time. That is fine as long as you and your wife don't make a combined $119,000 (modified adjusted gross income) or more. If you do make that, the IRA contribution is not tax deductible. It is only partially deductible from $99,000 to $119,000. In that case, other investments might be better options than IRAs.

https://www.irs.gov/retirement-plan...-you-are-covered-by-a-retirement-plan-at-work

Don't plan on having a combined income for a few years, and probably the same amount of time before I get to 6 figures in salary. So now's the time to beef up the IRA. Do it through Vangaurd, only like 2% right now. It's more or less another financial vehicle/cushion. I don't need the money right now.

 

[pitinoshairplugs]

I'm blessed... I don't deny that.

I'm a partner in a lucrative business and I make very good money. But even before that I had an investment plan.

Since I've been out of college i've put between 3-6% of my income into a 401k with a 3% match. For the last 6 years at my place of business we all get 6% of our income for our 401k's. I put an additional $5,000 per year in there.

I also invest fairly aggressively in the stock market putting 10% additional in the market. I'm a firm believer in buying AT ALL times. You don't know when you're at a peak or a low point until you're off the peak or out of the low point. So buy on the way up and on the way down consistently and you're never behind. I also reinvest all dividends except for a few stocks that I think i'm too heavy in.

I don't do mutual funds. Myself and my broker have essentially created a mutual fund ourselves. It's constantly changing and we are constantly buying new stuff. I rarely sell anything unless it's just a dog. But we usually don't pick dogs. I've never not beaten the S&P...

I'm not able to do a roth anymore but I do still contribute to a traditional IRA.

Don't ever let anybody convince you that it's not a good time to invest in the stock market if you are under the age of 45. It's always a good time to invest. Even if you invested the day before the downturn in the mid 2000's if you kept investing through the downturn you are WAYYYYYYYYY ahead today.