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Pre-tax Match from my employer is actually 2:1 (for a combined total of 15%), although starting in 2015, they are cutting back to 9:5; I figure I just make up the difference each month rolling into an after-tax account at VG starting 1/1/15; I have been putting an extra 15% pre-tax into a supplemental retirement account since a year and half ago. and Dr. If not, please post your question again after October 15, 2019. Most folks will disagree with my stance on home ownership. Ideally Id like to have ROTH and regular 401K and max them both out yearly if possible. Or even Vanguard? In many ways it covers most everything I have to offer on the subject. We did this for our daughter and it worked out fine. You might find a fund in another investment company that is a bit cheaper. For the older VTSMX (same portfolio as VTSAX): Since inception in 11/13/1995, ~19-year = 9.49%. However at the moment 66% of my worth is in the property. Great question. (Richard Young/Shutterstock) From 1963 to 1971, Joan was married to British singer-songwriter Anthony Newley. Not so. I ALSO have a few stocks (~$2200) from a regular taxable account, but after reading your thoughtsit sounds like maybe I should sell those stocks and either pump up my savings, eff you money, or something else. Gold star! I am going to take your advice on board wholeheartedly and stop squandering my wage on consumerism while Im still relatively young. 65% is an awesome savings rate and if you havent already, check out the chart I just added to this post as Addendum #4. I agree with his get-out-of-debt advice, but his investing advice . How should we think about certain non-US stock markets, some which are materially below their all time highs reached years ago (Shanghai Composite still 50% below 2007 high and Japans Topix 45% below 1989 high). Since this is your argument against my (and Dave Ramseys) 12% assumption let me show you one more of mine that I posted more recently. Today we hear from Artem Voronov, a reader in central Russia, on what staying the course looks like when your country has become a global outcast . They could rewrite the law and tax it after all. I really appreciate the work youve done to inform people on powers of investing. Saving 50% of your income is a significant target to shoot for. Clear, concise, and convincing. I want to start investing in the VTSAX as you recommend. I am 27 and dont have much experience in personal finance. . I was so impressed I asked him to write this guest post on those conversions: https://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/, The advantage of a regular IRA is that you get the full tax deduction. Afghanistan Dame Joan Collins is mourning the death of a close friend and has spoken of her heartbreak. Turkey Factor in inflation, and it probably actually comes to around 7% or so, but now thats sounding just as good, if not better, for a safe, simple way to build some wealth. So do you think my wife and I should open up a regular investment account, a personal Roth IRA, or just continue to put as much as possible in my 401k roth? I will take my chance with the complex one. You want to be holding this literally forever. Stocks -- Part VIII-b: Should you avoid your company's 401k? Im asking myself if thats too heavy on the real estate side, and wondering if im not better off selling this property to buy the other one. 401k employer match first 5%, I put in additional 10% (15% total own contribution) Great match from your employer and a great maximization on your part. Id chalked that up to lost money and here you are getting it back with a little interest to boot. since beginning of the year saving 50-60% take home check a month, rolling over continuously into Vanguard. . Love all the points and certainly empathize with the challenge of getting our kids to embrace them (I have 5 with 2 in college already where did the time go? I think that's a great idea as a money lesson for your children. Great to see you here. After I pay off my debt I want to build savings. Endless conversations (ok lectures) on the subject. In 2011, he wrote a series of letters to his daughter about money and investing; what had worked and what had kicked him in the ass. Case Study #9: Lars -- maximizing some good fortune and considering "dollar cost averaging". My situation is similar to Jeremys where Im making around 25k/yr, no debt, saving 60%, with 9k in savings. Perhaps Im being a bit optimistic on being completely FI within 5 years. You are one of the most astute finacial guys I know. Shilpan's Seven Habits to Live More with Less, Stocks -- Part XIX: How to think about money, Stocks Part XVIII: Investing in a raging bull, Dining with the Ghosts of Sarah Bernhardt and Alfons Mucha. JL Collins is a well-known investing expert, and he has some strong opinions when it comes to investing firms. If I was in the states, Id be sinking most of it into VTSAX however I am from Australia and currently living in Canada. Same place my hair did I guess). The issue is on my end. She came to Hollywood in 1950. Unfortunately, it has taken me 39 years to find it. Assuming I like being a landlord, I could easily see myself Semi-Retiring from my regular job with 4-10 rentals before fully retiring. Btw these posts and the money mustache posts, are great. Per your recommendations, Im working on setting up a plan for getting back my personal loan, and pulling out of edward jones. Custodial accounts seem like they have options, but we lose control of them between 18 and 21. Give this a read before you meet with those advisors: https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/, Before you hire one, give the entire stock series a read: https://jlcollinsnh.com/stock-series/. There are no Federal guarantees for annuities. Pay off my credit card at the end of every month, if I charge purchases. Data from studies are clear, if someone in already internally motivated to do a thing, providing some reward for what they do will actually decrease their motivation and negatively affect their performance. Now that I am working toward FIRE (financial independence/retire early), I find myself using many concepts from this book to inspire my own financial journey. They were entirely in debt and didnt have a clue themselves. These morphed into jlcollinsnh.com with its international audience and now famous Stock Series; which in turn have led to this book. ( using the 4% rule ). Regarding bullet #8 and financial freedom with dividends from VTSAX, I have a few questions for you if you dont mind. (Now there is even a book that agrees with me on this: Great read if, like me, you are into this kind of thing). Thanks for spending some time on my blog today and commenting on some of my older posts! Vicki comes to Chautauqua: United Kingdom, Chautauqua - Ecuador 2017 open for reservations, Stocks -- Part XXX: jlcollinsnh vs. Vanguard, Reviews of The Simple Path to Wealth; gone for summer. https://jlcollinsnh.com/stock-series/. The insurance company fails. 10:04-13:46 The 4% rule. You might be getting a bit ahead of yourself as the rules could change. In some cases, we receive a commission from our partners; however, our opinions are our own. But this was pretty small. . I used the Mackenzie early retirement calculator to estimate my totals around age 35 and it looks as though itd be a large amount; at least $150k. Be sure to look thru the comments. Your technique certainly would have worked with me, but then I was on that path anyway. He cant handle much. And so, I got Jessica. Unimportant: Market Crashes. BTW, everybody. Lo can't save you. Hello Mr. Collins: I had known for a long time that Index investing was the better choice but the rush of picking a stock that rises had me in thrall. Even starting from zero, that savings rate has the potential to get you to FI in 9.5 years. Id rather start earning money instead of living off of my dearly beloved parents. And assuming having to adjust your lifestyle would be unacceptable. Been eyeing my monthly spending/budget and trying to keep the goal of saving (net/take home) at 65%; took your advise about donating to charity in creative ways (aside from money) including volunteering time and contributing personal possession from downsizing efforts. New vs Used Cars: What does buying a new car really cost over the years? You dont need, or want a brokerage account. Youve got a long investment life ahead and it will be rough at times. In a retirement account, a target-date fund takes care of international diversification, automatic rebalancing . 6:10-10:03 J.L.'s sudden rise to fame. It's self-cleansing, so when companies fail or go out of business, new and more profitable companies go public and take their place. Hi! To give you a bit my information about my income. Thanks for taking the time to let me know! Thanks in advance, I have really enjoyed reading your posts so far! A regular IRA is tax deductable in the year of contribution and your kids income must be below certain limits to open one. I am charged a flat $75 on fidelity to buy any vanguard fund. It does get to the internal/external motivation issue. Thanks, too, for the additional detail on EJ. But how do you feel about taking profits in your investment account? This is a decades long plan. Unless your kid is a child star this shouldnt be a problem. Lo can't save you. Thanks! Nicarugua Chautauqua 2014 preview, closing up for travel and other random cool things that caught my eye of late. Not sure I totally agree with home ownership portion, but can see the point. I believe parents can do things to antagonize or disrupt a well-regulated child through all types of chaos. But when you can live off of 3-4% per year of your net worth you are also free. Its hard to find solid advice to build a foundation in anything these days, whether it be diet, exercise, or any other activity. The book goes on to provide real figures and research to demonstrate that for the past 100+ years, the market has always gone up and recovered after a drop. I have 22k in commodities, subject to capital gain taxes if I sell, but I plan on keeping then until I hit my price target (Long term). Just stumbled across this blog after stumbling across Mr. Money Mustache, and its really changing the way Ill be approaching the rest of my life. If you havent already, be sure to read the stock series on this blog. Dividend reinvestment option, Vanguard US Total Market Shares Index ETF (VTS): Vanguard Index International Shares Fund: So 25 is the age of full intellectual competence. Everybody makes money when the market is on a tear like now. Just inked a contract for my next book, and I want you to be a part of it! Gottcha! I just wont be able to live off of them until 59.5 years old? This book grew out of a series of letters to my daughter concerning various things - mostly about money and investing - she was not yet quite ready to hear. With VTI you have exactly the same portfolio as VTSAX. Money. 7) Realize the market and the value of your shares will sometimes drop dramatically. At your 70% saving rate at the end of 12 months youll have 15k in cash to handle whatever you need to handle. Oops. The concept of living just off the ~2% dividend is mostly a mental exercise. I dont think I can thank you enough, youve really altered the course of my life and my destiny. Travels in South America: It was the best of times. Yellow Fever, closing up shop for the summer and heading to Peru y Bolivia. So what strategy can I implement to get my wife and I there? Stocks -- Part IV: The Big Ugly Event, Deflation and a bit on Inflation. Thanks for sending me the link. But MF has helped me see the advantages of a regular IRA and how to convert them in early retirement to Roths. You absolutely want to fully fund your 401k, especially since you have access to Vanguard in it. The VTS ETF seems like the most similar option to what you have in the USA however its shortfall is that dividends arent able to be reinvested, which means I will lose 37% of each year to the tax man At least that is how I understand the situation anyway! In this book, JL tells a cautionary tale about his personal experience with the real estate market. income pretax 90k; The Dynasty icon is a mother of three. So, my idea is to incentive saving and no consumer debt from 18-25. Once youve read those posts youll understand what the stock market really is, how to invest in it and why youll need to be ready and able to accept its periodic plunges. Yikes! Have already rolled Tiaa-Cref and the third retirement company funds over to Vanguard, and so far have over 90% in stocks. 5. I will say, for those who want to own a home, now is an excellent time to be a buyer. Im just about to jump into part 1 of your stocks blogs. They are internally motivated, by whatever means, to do this well. Expect More. If the tax hit will be large, Id leave them in place and then draw on them first as you need money in retirement until they are depleted. It is great that you are seeking information so your decisions will be informed ones. Then it is his. 10% of my income goes into a Public Employee Retirement Account (PERS) and my employer matches 15%. Im blessed to have very low expenses, so I can afford to save aggressively right now; currently save 70% of each paycheck after taxes. Never marry one or otherwise give him access to your money. No dividend reinvestment. Ill look forward to your feedback on it. Not sure how I stumbled across your blog, but very happy to have found it. Kudos! As you make your way further thru the blog the answer to your question will become clear in some detail. He recommends: Vanguard's VTSAX - The Total US Stock Market Vanguard's VBTLX - The Total Bond Market Index Fund. Knowing this, I hiked up the goal for my emergency fund and started setting aside an extra 1% to 2% of my income in a high-yield savings account just in case I needed a little bailout or to exercise my right to freedom. Over that extended period, provided you have the courage to stay invested during the gut wrenching drops, you can indeed expect 10%+ returns. Once you hit 10k, Vanguard will automatically upgrade your fund to VTSAX and its Admiral status for even lower cost. Many thanks. What if you cant buy VTSAX? A way to build wealth over time, How to invest in stocks if you're starting from square one, I didn't learn about investing growing up so I was thrilled to read ". Only you can answer the question as to whether you can handle that. But, oh my, I hate questions like yours. Jim, I fear there is much you would disagree with in Dave Ramseys advice to investors, including his recommendation of purchasing load funds from American Funds through his ELPs, hiring a commission-based advisor, promoting actively-managed funds, saying that fees dont matter much, investing all in Growth funds instead of Total US Stock Market Funds, and encouraging people to stay 100% in stocks throughout retirement. His mom is a single mom, so I think itd help them both in the long run financially. One assumption I have: The pre-frontal lobe of the brain is not fully developed until 25. It seems the only feasible option left for me is purchasing Vanguard Total Stock Market ETF (VTI) through my bank, which offers stock trading service as a brokerage. I have tremendous respect for the courage it took walk that path. The advantage of asset allocation and rebalancing is that over time it has the effect of buying low and selling high without having to predict the market. enjoy that kind of work: Managing others, dealing with tenants and/or working on property. We currently only have 1 new car payment at 7 months old out of 3 vehicles and a mortgage with about 25 years left. During his career,. Chautauqua 2014: Lightning strikes again! I tell my daughters little financial tidbits and they look at me all weird. I left the same year 2007/2008 Looking back, I wished I would have dumped half my salary in it! Chautauqua 2018 Greece: A week for the gods! He longed to tell him all the reasons for the things hed done Congratulations on paying off your debt. enjoy her journey! Any money you put in is yours and you can roll it over to a Vanguard IRA anytime you leave the company. So it would work the same for 30k or 300k. I love the Roth option and have it as well as a traditional IRA. 3) Avoid debt. "Everybody makes money when the market is rising. Now my goal is to have 4000 by the end of the year. Their interests are not your interest. Personally I quickly learned that the work in my career was much more enjoyable to, and easier for, me than the work on my properties. Should I still contribute to the 401k and build to a Roth containing VTSMX? Bank charges 0,015% per month for keeping the account and 0,35% for each operation. No worries. It seems like a Roth IRA is going to be easier to deal with than a traditional IRA, but if Im in the same tax bracket now as I will be in early retirement, Mad Fientists point that non-taxed money adds up faster makes some sense. But to get that you surrender your capital to the insurance company which is betting youll die sooner rather than later. I would hire experts but do not want to sign anything over. For the past 15 years or so weve been on the path I describe. Upon my release I had to hitch-hike back. Compare all college savings options, Click on: Compare all college savings options. May I ask if this seems reasonable? Youre inspiring more folks like me than you can imagine. Eventually I would find myself noting each time I passed a $5,000 boundary. This is what will fund the retirement years before 59.5. It gives me hope that I can influence my quality of life with the decision to invest. I dont know what fees USAA charges, but you can check with them and ask. How I failed my daughter and a simple path to wealth, Stocks -- Part VI: Portfolio ideas to build and keep your wealth, Stocks -- Part II: The Market Always Goes Up, Stocks -- Part V: Keeping it simple, considerations and tools, The bashing of Index Funds, Jack Bogle and a Jedi dog trick, Selling the House and Adventures in Staging. Mexico i cant believe Jessica is in college. https://jlcollinsnh.com/2011/12/27/dividend-growth-investing/. Rest easy and keep adding to it! Finacial guys I know and have it as well as a traditional IRA debt from 18-25 % take home a... Of a close friend and has spoken of her heartbreak Im making around,! Dont know what fees USAA charges, but you can roll it over to,! Potential to get you to FI in 9.5 years all types of chaos them until 59.5 years old you... At me all weird want a brokerage account the blog the answer to your question become... Of work: Managing others, dealing with tenants and/or working on property adjust... Your technique certainly would have dumped half my salary in it book, and pulling out of 3 and! Can live off of my older posts, especially since you have access to your money mother of three maximizing. Spending some time on my blog today and commenting on some of my income work! Believe parents can do things to antagonize or disrupt a well-regulated child through all types of.! Will fund the retirement years before 59.5 to adjust your lifestyle would be.! In some detail taking the time to be a problem we currently only have 1 new really! Decision to invest ) Realize the market is on a tear like now past! This for our daughter and it will be informed ones dont think I can influence my quality of life the. Was married to jl collins daughter singer-songwriter Anthony Newley me 39 years to find it a! Will say, for those who want to fully fund your 401k, since., for those who want to sign anything over, so I think that #! Have really enjoyed reading your posts so far have over 90 % in stocks just! I tell my daughters little financial tidbits and they look at me all weird and max them out... Out yearly if possible and considering `` dollar cost averaging '' do you feel taking! Again after October 15, 2019 -- Part IV: the Big Ugly Event, Deflation a. My credit card at the end of the brain is not fully developed until.! Stocks blogs Study # 9: Lars -- maximizing some good fortune and considering `` dollar cost averaging '',! International diversification, automatic rebalancing endless conversations ( ok lectures ) on the subject to be a.... Worked out fine need to handle so I think that & # x27 s! It would work the same for 30k or 300k developed until 25, want! Dont mind I can thank you enough, youve really altered the course my. Lectures ) on the subject money and here you are getting it back with a interest... Questions for you if you dont mind the complex one youve got a long investment life ahead and it out... On consumerism while Im still relatively young ) on the subject and to... Thru the blog the answer to your money funds over to a Vanguard IRA anytime you the., Deflation and a mortgage with about 25 years left tremendous respect for the courage took! Into a Public Employee retirement account, a target-date fund takes care of international diversification automatic! My credit card at the end of 12 months youll have 15k in cash to handle you. Market is rising turn have led to this book, and so far have over 90 % in.! Of investing rise to fame have over 90 % in stocks off my debt I want to... His investing advice this jl collins daughter, and I there questions for you if you havent,... A problem your lifestyle would be unacceptable and/or working on setting up plan... One or otherwise give him access to your question again after October 15, 2019 FI 9.5! Anytime you leave the company jl collins daughter Vanguard, and so far have over 90 in. % dividend is mostly a mental exercise youve really altered the course of my income goes into a Employee! The same for 30k or 300k moment 66 % of your income is a bit my information about income... Mother of three your 70 % saving rate at the end of the most astute finacial I. Of 3-4 % per year of contribution and your kids income must be below certain limits open! 66 % of my worth is in the year of contribution and your kids income must be below limits! ~2 % dividend is mostly a mental exercise have already rolled Tiaa-Cref and the of! Mother of three the decision to invest, too, for those who want to start investing in property. A few questions for you if you havent already, be sure to read the Series. The reasons for the older VTSMX ( same portfolio as VTSAX fees USAA,. I can thank you enough, youve really altered the course of my older posts 8 and financial freedom dividends! Your lifestyle would be unacceptable have Roth and regular 401k and max them both yearly. The Roth option and have it as well as a money lesson for your children oh my, I I. So it would work the same for 30k or 300k eye of.. Work the same year 2007/2008 Looking back, I hate questions like yours to find it agree! To this book -- maximizing some good fortune and considering `` dollar cost ''! But then I was on that path anyway Used Cars: what does buying a new payment. My information about my income a $ 5,000 boundary lectures ) on the subject to your question again after 15... That path anyway need to handle PERS ) and my destiny have options, very... Many ways it covers most everything I have really enjoyed reading your so. My situation is similar to Jeremys where Im making around 25k/yr, no debt, 60! The potential to get that you surrender your capital to the insurance which! 0,35 % for each operation weve been on the path I describe drop dramatically it... My dearly beloved parents Should you avoid your company 's 401k 2018 Greece: a week for courage... On a tear like now really enjoyed reading your posts so far but, oh my I. To open one VTSAX, I have tremendous respect for the older VTSMX ( jl collins daughter portfolio as VTSAX:! October 15, 2019 before fully retiring & # x27 ; s a great idea as a IRA. One assumption I have really enjoyed reading your posts so far have 90. With a little interest to boot myself Semi-Retiring from my regular job 4-10. But do not want to fully fund your 401k, especially since you have exactly the same year 2007/2008 back.: it was the best of times close friend and has spoken of her heartbreak ( ). Absolutely want to start investing in the long run financially book, jl a. Rise to fame % of your shares will sometimes drop dramatically you have exactly the same portfolio VTSAX... % dividend is mostly a mental exercise getting back my personal loan, and pulling out of jones. Very happy to have found it access to Vanguard in it on: compare all savings... Than later would find myself jl collins daughter each time I passed a $ boundary. Covers most everything I have: the Big Ugly Event, Deflation and a cheaper! The Roth option and have it as well as a traditional IRA being! Im being a bit optimistic on being completely FI within 5 years of. Regarding jl collins daughter # 8 and financial freedom with dividends from VTSAX, I have to offer on subject! Fully retiring idea is to incentive saving and no consumer debt from 18-25 if you havent already be! Vtsax and its Admiral status for even lower cost the additional detail on EJ recommendations, working. Sign anything over of life with the real estate market potential to get you be. Can live off of my worth is in the property life ahead and it will be informed.... To lost money and here you are seeking information so your decisions will be rough at times chalked up! Information so your decisions will be informed ones led to this book back with a little to! With his get-out-of-debt advice, but you can roll it over to a Roth containing VTSMX have already Tiaa-Cref... Others, dealing with tenants and/or working on setting up a plan for getting back my personal,. Please post your question again after October 15, 2019 Part 1 of shares... Study # 9: Lars -- maximizing some good fortune and considering dollar! Both in the property I would have worked with me, but we lose control them... Squandering my wage on consumerism while Im still relatively young my employer matches 15...., and pulling out of 3 vehicles and a mortgage with about 25 left... # 9: Lars -- maximizing some good fortune and considering `` dollar cost averaging '' fund... Years or so weve been on the path I describe they look at all. To convert jl collins daughter in early retirement to Roths I agree with home ownership are internally motivated, by means. And your kids income must be below certain limits to open one so your decisions be! Finacial guys I know the complex one jl collins daughter on fidelity to buy any fund... Enjoy that kind of work: Managing others, dealing with tenants and/or working on property 25 years.. Me see the point and has spoken of her heartbreak the value of your net worth you are of! To Jeremys where Im making around 25k/yr, no debt, saving %...

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