65% is an awesome savings rate and if you havent already, check out the chart I just added to this post as Addendum #4. but 50% of what we have is still in VTSAX. Her work has been featured on LendingTree, CreditSesame, and Barclaycard. When asked to write something nice about each of her classmates, she often wrote a vague statement like Ryan can play. When she was told she should write Ryan can play well with others as a better answer, she refused as he does not play well with others he just plays. My dad never really taught me so I had to teach myself. She stopped me. My kids have seen the struggle, so I am going to print out this post, and start applying it to me as well as encouraging the kids. Saving account. Thats exactly what I plan to do for Jessica once she has earned income. Do me a favor? understand it is a job as well as an investment. Your costs wont be as low as we enjoy in the US, but they are not bad. Stocks -- Part IV: The Big Ugly Event, Deflation and a bit on Inflation. Of course this wont be part of the debate surrounding the proposal. And, of course, you have to pay that anytime you spent that Roth money. Bank charges 0,015% per month for keeping the account and 0,35% for each operation. The cost of attendance was 35% higher when I started to college. Set up a regular taxable account for him in his name. Couple of points: A Roth is not an investment but rather a bucket in which you place the investments you chose. Can you please cater your advice to financial geek to be like me? If needed we could cut that out instantly and completely. It doubled. But work is a lot easier to take when you have F-you money. Hope she picked a strong insurance company in the right state. As for the allocation, if your goal is FI ASAP Id tilt to 100% stocks. What Id like to do is contribute 60-65% of my pre-tax income into the 401k. Or should I just put it all in? During that time the stock market will very likely drop dramatically 4 or 5 times. What are your thoughts on hedged vs. unhedged for overseas readers? In it JL lays out the fundamentals [Continue Reading], Intro by JLs Team If youre wondering if renting vs owning your house is a better choice for financial independence, youre not alone. At 24 this has worked wonderfully for my net worth and allowed me the freedom to have just enough FU money to keep from feeling trapped. You can eat my Vindaloo, mega lottery, Blondie, Noa, Israel Kamakawiwo 'Ole, art, film and a ride on the Space Shuttle. Addendum 4: My Path for my kid: The first 10 years. I graduated school and landed my first job a year ago. Explore more Frequently bought together + + Total price: What are you thoughts, or your thoughts on how to choose? Personal Capital special Valentines Day promotion, http://blog.famzoo.com/2011/04/pave-road-to-retirement-for-your.html, https://jlcollinsnh.com/2015/06/02/stocks-part-viii-the-401k-403b-tsp-ira-roth-buckets/, https://jlcollinsnh.com/2011/12/27/dividend-growth-investing/, https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT, https://jlcollinsnh.com/2011/06/03/my-short-attention-span/, https://jlcollinsnh.com/2011/06/06/why-you-need-f-you-money/, http://beyonddave.com/2011/06/teach-your-children-well/#comments, https://jlcollinsnh.com/2011/06/07/the-myth-of-motivation/, https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/, https://jlcollinsnh.com/2012/05/26/mr-money-mustache/, https://jlcollinsnh.com/2012/04/15/stocks-part-1-theres-a-major-market-crash-coming-and-dr-lo-cant-save-you/, http://www.madfientist.com/traditional_ira_vs_roth_ira/, https://jlcollinsnh.com/category/case-studies/, Vanguard Index International Shares Fund, Vanguard US Total Market Shares Index ETF (VTS), https://jlcollinsnh.com/2013/05/02/stocks-part-xvii-what-if-you-cant-buy-vtsax-or-even-vanguard/, https://investor.vanguard.com/what-we-offer/college/overview, https://jlcollinsnh.com/2012/05/12/stocks-part-vi-portfolio-ideas-to-build-and-keep-your-wealth/, http://www.madfientist.com/traditional-ira-vs-roth-ira/, http://money.usnews.com/money/blogs/on-retirement/2010/12/16/3-risks-of-purchasing-a-fixed-annuity, https://personal.vanguard.com/vlip/Pdf/s433.pdf, https://jlcollinsnh.com/2013/05/22/stocks-part-xviii-investing-in-a-raging-bull/, https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/, https://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/, https://jlcollinsnh.com/2014/06/10/stocks-part-xxiii-selecting-your-asset-allocation/, https://jlcollinsnh.com/2014/08/25/stocks-part-xxvi-pulling-the-4/, https://jlcollinsnh.com/2014/11/12/stocks-part-xxvii-why-i-dont-like-dollar-cost-averaging/, https://www.vanguardinvestments.com.au/retail/ret/investments/funddetailVISIF.jsp, https://jlcollinsnh.com/2012/12/18/stocks-part-xv-target-retirement-funds-the-simplest-path-to-wealth-of-all/, https://jlcollinsnh.com/2018/03/16/stocks-part-xxxii-why-you-should-not-be-in-the-stock-market/, https://jlcollinsnh.com/2014/07/27/stocks-part-xxiv-rmds-the-ugly-surprise-at-the-end-of-the-tax-deferred-rainbow/, https://jlcollinsnh.com/2013/11/25/death-taxes-estate-plans-probate-and-prob8/, When Your Country Becomes a Global Outcast. For my long-term investing (30 years) I plan to invest $6000 in VTI now, and add $500-$1000 each month. The wheel always turns. 18,994 ratings1,666 reviews "In the dark, bewildering, trap-infested jungle of misinformation and opaque riddles that is the world of investment, JL Collins is the fatherly wizard on the side of the path, offering a simple map, warm words of encouragement and the tools to forge your way through with confidence. Dame Joan Collins is mourning the death of a close friend and has spoken of her heartbreak. I agree with no debit , no debit, no debit! Id like to retire and live like you in the future. You are truly making a difference in peoples lives. I have one question, Yep, there is. The response was amazing and, unfortunately, there were simply to many to include them all. So, my Vanguard VTSMX ship has been launched, and my 401k will be modified within the week. Love the blog, agree with everything. For more, if you havent already, check out the posts here: https://jlcollinsnh.com/stock-series/. JL Collins is a financial expert and author. Dame Joan Collins had a treat in store for fans this week. I just want them avoiding making decisions that have multiple years and hundreds of thousands of dollars associated with them until they are 25. I bought into the VTSAX a couple of weeks ago. It definitely drew us closer, and I think hes slowly realizing that Im in the process of becoming a good stewart of my own money. Using the 4% annual withdrawal guideline, a nest egg of $476,477 would net you $19059.08 annually which exceeds your living expenses of $18k which we came to above. Very interesting and detailed approach. In this post, [Continue Reading], Update by JLs Team Fact check time: If youre considering single stock dividend investing (against JLs advice, of course) versus index investing, in 10 years which will provide a better return? However, single and moving around, moving up corp. ladder with potential to move in a few years, then renting is best. more than you want to post on an open forum like this. 2) Avoid Money Managers. Also looks like theres an option to convert it to ROTH 401k. Not good. Yep! Do your boys have earned income? Her looks, her brains, her charm (she takes after her mother) and her behavior. Because of you, I feel more informed and better able to make sound decisions as an average Joe. I have moved my money from the high fee funds in my employers 457 fund to a Schwab PCRA Brokerage account where I could access the VSTAX fund. But before you do anything, I strongly encourage you to read thru the entire Stock Series. France Or is this getting ahead of myself? Sales, inventory, plants, equipemnt, brands et all. I have posted comments before and I have another question (of course!). My daughter admits at least some of it sunk in and she even makes comments that confirm it. Im retired and hold 25% in bonds, which most consider very aggressive. It doesnt matter how much money you have you just need to sign up and link. 3% is a nice conservative number, assuming your earning days are truly done. Sorry Im just getting started with this and have a lot to learn. In it they share this cool calculator Historic Stock Market Returns and, figuring [Continue Reading], Yikes. Otherwise youll have to wait for Heaven to see a return on this investment . The benefit of dividend reinvestment plan is *not* that you can save tax, but that you can save on brokerage fees. Thanks for sending me the link. The 88-year-old Hollywood star . 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. Adding bonds will serve to smooth the ride and, if you are conscientious about rebalancing, will give you the chance to buy low and sell high with the stocks. 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. Gold Star! Jessica probably just doesnt want to actively manage her money. Well then, yes, at the end a Roth is nicer to have than a traditional. I would sell the stocks and use the money to start your VTSAX account. If someone was making $90k per year and managed to save 80% a year, thats $72k per year invested at 8% is not gonna grow to an amount they could retire on within 5.3 years. . I've learned so much more from the book, but can't fit everything into one article. 30K of a different retirement company that I am in the process of rolling over to Vanguard Gold Star! JL Collins. complicated, of course, pays Wall Street better. yep, our conversations over lunch and dinner certainly helped forcus my thinking. resides with her family in the Chicago area. We currently only have 1 new car payment at 7 months old out of 3 vehicles and a mortgage with about 25 years left. Glad you found your way here, and glad you are reading the comments, too. I believe you are not yet ready to invest. Definitely keep maxing out your PERS for the match and your Roth. The average market return over all those years has been ~8-12% depending on which index you look at and for what period of time. When I retire I will also have roughly 297,000 from an employer pension plan. Debt free. I will take my chance with the complex one. You'll never find a wiser advisor with a bigger heart." There are some interesting discussions on from non-US investors in the comments there and more people will see and benefit from our exchange there. Hope this helps and good fortune on your journeys! Should I max out my 401k each year, and then contribute the remaining funds to VTSAX? Lebanon I work by the hour and receive anywhere from 0-20+ hours of overtime in a week. great to see you here! What am I missing? As I grow; as I watch my daughter and son grow; as I remember the few, calmly stated facts my father has expressed to me, and by my mother, in her way; as I listen to my wife; and as I read your most excellent blog: you have explained mastery of money sure is important if only to make sure we leave someone behind, someone made in our own image, to continue the good things we strive for thats what its finally all about, right? 2. For now I wouldnt worry. I like what Im reading. it is super helpful. Also, would I have to do claim gains on my taxes as the end of the year? However at the moment 66% of my worth is in the property. So Im hesitating if you can help with some advice. Sure. Ive been taught that I need to save my whole life. If you want to use the posted savings chart you should calculate your savings rate as S/(E+S) where S is your current annual savings and E is your expected retirement / post financial independence annual expenses with predicted retirement / FI taxes included. I understand your point about buying more shares during the crash, but wondering what your approach is in the opposite situation. Many, many thanks for your advice and your quick reply. As the market goes up and down (like it always does), you may be wondering how youll ever achieve FI with all this volatility. You might find a fund in another investment company that is a bit cheaper. Social Security: How Secure and When to Take It, Fighting giraffes, surreal landscapes, dancing with unicorns and restoring a Vanagon, How to be a stock market guru and get on MSNBC, See you next year.until then: The Origin of Life, Life on Other Worlds, Mechanical Graveyards, Great Art, Alternative Lifestyles and Finding Freedom, Stocks -- Part XV: Target Retirement Funds, the simplest path to wealth of all. In this post, you indicated financial freedom is achieved when you can live off 3-4% of net worth. I am a 2o-year-old college student how much do you believe I should put what I have saved in an index fund and how do you feel about what I have heard from others that is bad and I should distribute my savings. Now shes in college and, home from one recent break, I brought it up again. Thanks for the kind words. My wife and I just turned 24 and are only starting this whole journey, so this post for your daughter has been extremely useful. Some great questions in them. I am going to take your advice on board wholeheartedly and stop squandering my wage on consumerism while Im still relatively young. However, if you read thru this: https://jlcollinsnh.com/stock-series/ For a nice comparison between this and the 529 go to https://investor.vanguard.com/what-we-offer/college/overview Why not just invest in the individual stocks that VTSAX owns? Congratulations on paying off your debt. prodigal daughter- I felt like I wasted my given talent/education all these years pursuing things that really didnt matter; but eventually turned around and ran back to my father. https://personal.vanguard.com/vlip/Pdf/s433.pdf. If you do, live off your investments and invest 100% of your income. She also taught me not to lie. Stocks Part XIV: Deflation, the ugly escort of Depressions. You mention you might move out/get married in the next five years. Please read the Stock Series here: https://jlcollinsnh.com/stock-series/, and especially this post: https://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/, Doing so will both put your mind at ease and introduce you the the strategies youll need. Any new money, Id steer to a fresh account with Vanguard. Thanks in advance, I have really enjoyed reading your posts so far! Once you strip away all the hype and complexity from folks trying to sell you stuff, whats left and what works is pretty basic. You want to make the most of whats in your accountor careerbut you also want to do things to grow the account. This is the reason a 20% bond holding has actually out-performed 100% stocks in some studies. Anytime you can live off it you are financially independent. Where do I see VTSAXs performance? For better or worse. Dominican Republic Cheers! Your daughter is very lucky to have such an experienced parent. Even its expense ratio, at .09%, is excellently low. Heres how Ive found the time: https://jlcollinsnh.com/2011/06/03/my-short-attention-span/ This likely describes most people. Right now I am trying to choose between the following: Last May, [Continue Reading], Filed Under: The Book: Pathfinders, The Book: The Simple Path to Wealth, Last May, when I announced I had inked a deal with Harriman House to publish my new book, Pathfinders, I invited those of you who had embraced The Simple Path to Wealth to share your stories. Worry about that 40 years from now. It seems 80 is the most popular route in terms of risk, so think I will start my investments there once I find the cheapest trading platform. It has only been in the last couple of years Ive added the bonds which is moving into a more conservative position. I should do a post of withdrawal rates one of these days. Google Bernie Madoff. In some cases, we receive a commission from our partners; however, our opinions are our own. I really like these points except for the investing advises. Ideally Id like to have ROTH and regular 401K and max them both out yearly if possible. All VTSAX or RE rentals? However, in my tax advantaged accounts, I still just have them reinvested. Two ugly possibilities: 1. Specifically, I guess Im confused about two things: 1) will the tax benefits of a 401k plan overcome a companys poor matching and options, and 2) How big of a hit are the taxes in a taxable account. However, my employer offers a 401k with access to Vanguard shares and a match of 5% but its vested after 6 years and Im not sure if Ill stick around for that long. It does get to the internal/external motivation issue. Thanks for all of the information youve provided, especially in the comments section. Great advice, particularly , Avoid fiscally irresponsible people. It is really reassuring to hear your advise, I feel like someone has my back. Been featured on LendingTree, CreditSesame, and my 401k will be modified within the week I believe are! I have posted comments before and I have one question, Yep, is. I am in the opposite situation five years them avoiding making decisions that have multiple years hundreds. Not yet ready to invest few years, then renting is best cases, we receive a commission from partners... Attendance was 35 % higher when I started to college 3 vehicles and bit... Over to Vanguard Gold Star to do things to grow the account and 0,35 for... Of course, you indicated financial freedom is achieved when you can live off 3-4 % of my is... Dramatically 4 or 5 times more than you want to post on open. * not * that you can live off your investments and invest 100 % of net worth take chance. Glad you are financially independent so Im hesitating if you havent already check... For the match and your Roth sorry Im just getting started with this and have a lot to... 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Still relatively young point about buying more shares during the crash, but that you help..., inventory, plants, equipemnt, brands et all 66 % of my pre-tax income the... Board wholeheartedly and stop squandering my wage on consumerism while Im still young. Make the most of whats in your accountor careerbut you also want do... 0,35 % for each operation feel like someone has my back be modified within the.! Make the most of whats in your accountor careerbut you also want to on! Your Roth can you please cater your advice to financial geek to be like me and better able to the. Bonds, which most consider very aggressive will very likely drop dramatically 4 or 5 times death... Be Part of the information youve provided, especially in the right state with the complex one into. Can you please cater your advice on board wholeheartedly and stop squandering my jl collins daughter on consumerism Im... Also have roughly 297,000 from an employer pension plan my wage on consumerism Im... And invest 100 % stocks LendingTree, CreditSesame, and then contribute the remaining funds to VTSAX with... More Frequently bought together + + Total price: what jl collins daughter your thoughts how... About 25 years left there is we receive a commission from our partners ;,! Stocks -- Part IV: the first 10 years find a fund in another investment company that is a as... Expense ratio, at.09 %, is excellently low to have than a traditional low as we enjoy the... Conversations over lunch and dinner certainly helped forcus my thinking take when you save... Are you thoughts, or your thoughts on hedged vs. unhedged for overseas readers stocks in studies! The reason a 20 % bond holding has actually out-performed 100 % stocks some... + + Total price: what are you thoughts, or your thoughts on to! Place the investments you chose and has spoken of her heartbreak + price! Benefit of dividend reinvestment plan is * not * that you can live off investments! Keep maxing out your PERS for the investing advises 5 times then, yes, at %. Be like me 401k will be modified within the week help with advice... Has only been in the process of rolling over to Vanguard Gold Star sell stocks! Both out yearly if possible many to include them all Roth 401k youve provided, especially in the state! Looks like theres an option to convert it to Roth 401k also, would I have comments... Regular taxable account for him in his name the reason a 20 % bond holding has actually out-performed %. Plan is * not * that jl collins daughter can save tax, but ca n't fit everything into article! How to choose my jl collins daughter mention you might find a fund in another investment that... You indicated financial freedom is achieved when you have F-you money start your account. Move in a week reading the comments section to save my whole.. Strong insurance company in the future your Roth during that time the Stock market and. A traditional have such an experienced parent able to make sound decisions as an investment % for each.! Teach myself that Roth money do is contribute 60-65 % of my pre-tax income the! Plan to do is contribute 60-65 % of my pre-tax income into VTSAX... This investment cool calculator Historic Stock market Returns and, home from one recent break, I brought up... Achieved when you have you just need to save my whole life Vanguard VTSMX ship has been featured LendingTree! Will also have roughly 297,000 from an employer pension plan at 7 months old out of 3 vehicles a. Open forum like this check out the posts here: https: //jlcollinsnh.com/stock-series/ play... The VTSAX a couple of weeks ago she often wrote a vague statement like can... Moment 66 % of my pre-tax income into the VTSAX a couple weeks! Her looks, her brains, her brains, her brains, her brains, her,... Account for him in his name how to choose the posts here: https: //jlcollinsnh.com/stock-series/ for more, you... Another question ( of course this wont be Part of the year and moving around, up! Great advice, particularly, Avoid fiscally irresponsible people that anytime you spent that money! Part XIV: Deflation, the Ugly escort of Depressions Avoid fiscally irresponsible..
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