| 19 yr old with dreams...and questions! |
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manguydude21
New Member
Cash: $ 0.65
Posts: 3
Joined: 08 Sep 2006
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| 19 yr old with dreams...and questions! |
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Hello, I'm not sure if I introduced myself to the community but I will use the time now to do so.
My name is Richard and I got $$ on my mind, ready for success and learning the ins and outs, legals, and enjoyment of business. My family has a long history in business and I plan to go toward the same route.
About me: I turn 19 in about 20 days and I feel like I want to start light on my entrepreneur empire by saving. As of now I have a very small ammount of money in my bank account but I should be getting some capitol off grants and such. I wanted to start saving as soon as I turned 19. I was thinking about $200/month, with my current job I shouldn't have too much of a problem keeping up with that ammount. My question is...I see that a lot of you mention saving with 8% interest can ammount to yadayada in a certain age. What I would like to know is, where can I put my money thats low risk, to get back an interest as high as 8%???[/b]
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Tue Dec 26, 2006 9:56 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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quote:
My question is...I see that a lot of you mention saving with 8% interest can ammount to yadayada in a certain age. What I would like to know is, where can I put my money thats low risk, to get back an interest as high as 8%
First, you DON'T want to put your money in a 'low risk' account. That would make it a mathematical certainty that you could never become wealthy. All you could do is up with inflation for your entire life and end up with a savings account with a couple hundred thou at age 65. You MUST learn to calculate risk, learn to take proper risks, and earn 12% or 14% on your investments to become wealthy.
With a moderate risk level, a $30k investment will grow to $1M in about 30 years - ie, if you could get that invested in the next 3 or 4 years, you would be a millionaire at age 50 to 55. (Young folks could do this by driving a hoopty for 5 years instead of spending $30k for a new car and a payment book). Another (more likely) method is incremental investing - putting $4000/yr into a Roth account - that will also grow to about $1M in 30 years (tax-free). And if your job has a 401k, that will let you grow several million (a million for each $4000/yr contribution) - some of it will be with free money if your company has 'matching'.
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Tue Dec 26, 2006 3:13 pm |
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manguydude21
New Member
Cash: $ 0.65
Posts: 3
Joined: 08 Sep 2006
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-oldguy
you mention a 401k plan, this might come off as a shock but what is a 401k plan exactly? I've heard about it here and there but never understood what it was.
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Tue Dec 26, 2006 8:12 pm |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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quote:
you mention a 401k plan
It is an investment plan that is defined in the IRS Tax Code #401k. It is facilitated by the corporation that you work for - you are allowed by the IRS to have a maximum of $15,500 withheld from your paycheck each year and placed in an investment account for you. (You are allowed to pick the investment). The rules are that you get to deduct your contribution from your income tax each year (it amounts to about a $4000 tax refund for many people). And you must keep the money invested until you are age 59.5 - that is to keep people from cashing in and spending their retirement money. Also, most companies 'match' part of your contribution - so that is free money. The whole plan is a great deal for young folks. It was invented in about 1983 - I retired in 1998 so I only had about 15 years in it - and it still added up to $868,000 - it will be millions for young people with 30 years to invest.
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Tue Dec 26, 2006 9:14 pm |
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manguydude21
New Member
Cash: $ 0.65
Posts: 3
Joined: 08 Sep 2006
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wow, that actually sounds almost to good to be true if I'm understanding everything correctly.
If you dont mind, please tell me more on how to register for this type of investment.
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Wed Dec 27, 2006 10:54 pm |
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LottomagicZ4941
Senior Member
Cash: $ 1.66
Posts: 2633
Joined: 02 Dec 2004
Location: Earth
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quote:
Originally posted by manguydude21
wow, that actually sounds almost to good to be true if I'm understanding everything correctly.
If you dont mind, please tell me more on how to register for this type of investment.
They have changed the laws on 401ks. You use to have to be 21 to get started. Perhps that was just the rule of my employer at the time?
But, I've told this story and I will tell it again incase you missed. It may be on page 3 of the forum for all we know.
Anyway, when I started my 401K I put in the max that my employer permitted which was 15%. My thinking was that I needed to buy a new car and this would get me use to the drop of spendable cash.
Well, a funny thing happened when I put away 15% of my income. My take home pay went UP!!!
Several other people who thought they couldn't save then enrolled in the 401K!!!!
Non promotional Facebook Jail regular forum inquiry
Promotional post in advert section for new Facebook group for those building a downline
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Wed Dec 27, 2006 11:54 pm |
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rockhound
Preferred Member
Cash: $ 26.45
Posts: 132
Joined: 03 Feb 2006
Location: West Virginia
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| old cars |
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I definitely want to endorse the comment about driving a hoopty, or old car, from oldguy. I agree that people stack the deck against their financial advancement by buying a new car and making payments too soon, before they have built up any savings or extra money for investment. In my opinion, buying a brand new car fresh out of high school or college is the way to keep yourself poor forever. Now is the time to save money, and resist buying "neat toys".
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Sat Jan 06, 2007 6:59 pm |
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pennant
Member
Cash: $ 0.85
Posts: 17
Joined: 24 Jan 2007
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interesting... 
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Wed Jan 24, 2007 8:29 pm |
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