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budpln
Member
Cash: $ 3.45
Posts: 17
Joined: 18 Jan 2012
Location: mass
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im totaly lost lol dont worry about it i belive you and trust your math.. i think this will be my plan 
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Fri Jan 27, 2012 12:31 am |
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oldguy
Senior Member
Cash: $ 309.30
Posts: 1481
Joined: 21 May 2006
Location: arizona
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quote:
im totaly lost lol dont worry about it i belive you and trust your math
LOL - what, you are 23, I thought you millennials were born with computer skills? My teenage grandkids can do this stuff faster/better than I can.
Anyway, as you can see, it is a mathematical series, you calculate each year based on the previous year and build on the components.
The power of compounding is vastly underestimated by most people. When Einstien was asked what is the most important equation he said "compound interest".
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Fri Jan 27, 2012 1:55 am |
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budpln
Member
Cash: $ 3.45
Posts: 17
Joined: 18 Jan 2012
Location: mass
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Lol I know I never really got into excl tho lol gunna have to learn
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Fri Jan 27, 2012 2:39 am |
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budpln
Member
Cash: $ 3.45
Posts: 17
Joined: 18 Jan 2012
Location: mass
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so i had another quick question. Should i add money to my rollover ira or should i open a roth?
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Sat Jan 28, 2012 2:07 pm |
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oldguy
Senior Member
Cash: $ 309.30
Posts: 1481
Joined: 21 May 2006
Location: arizona
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The main thing is that you put as close to $5000/yr into an 11%/yr fund each year, that's how you get to a million at age 53. It isn't so important whether your million is in a Roth IRA or a Traditional IRA, it's still a million. We can't know what the Tax Code will be when you're 53 - flat tax, fair tax, VAT, GST, and so on. Eg, under today's rules, a Roth IRA is tax free - but if the US replaced Income Tax with a Fed Sales Tax, the Roth IRA's will be taxed again when you spend the money.
You could split your $5000 - put $2500 into a new Roth IRA and $2500 into your Trad IRA. The Fidelity SP500 Index Fund would be a good choice for both.
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Sat Jan 28, 2012 3:54 pm |
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fast
Preferred Member
Cash: $ 36.30
Posts: 178
Joined: 20 Oct 2009
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| Re: new to the forum............. |
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quote:
Originally posted by budpln
any advice on a direction or savings plan or anything at all is GREATLY appreciated thnx for reading my post.
Anything at all eh? I think I can handle that. I warn you though; I do not give good advice, but I will try to be clear on my reasoning.
First, my attitude towards credit. You mention that you owe about $1,000 on two of your credit cards, but you don’t merely state that you owe them money; instead, you say that you “only” owe so much, and that tells me that you’re not nearly as conservative as I think you ought to be. I think you should have a frame of mind that repels you from going into debt. In other words, borrowing money ought not be the first thing that pops into your mind when you want (or even need) something. The good advice is to make a commitment to get out of and stay out of debt for the rest of your life with the purchase of a home as a possible acceptable exception. However, as I said, I’m not going to give you the good advice. I think you should toy around with debt and learn to play the game that keeps your credit scores high, but I assure you that doing so need not cause you to rack up thousands (or even hundreds) of dollars in debt, so one of your goals (and it needs to be a major priority) is to significantly lower the amount of debt you’re in, so although I’m not giving you the good and smart advice in telling you to become debt free, I am saying what direction you need to take, and that (I say) is to get it down at least very very low.
As to what to pay off early, who cares, so long as you know where you need to be. After all, if you make the commitment to refrain from borrowing on days that end in a “y,” then you’ll eventually get to where you need to be anyway. The typical smart advice, of course, is to pay off your debts from highest interest rate to lowest interest rate (and don’t tarry), but who needs smart advice when I’m here to give you another idea, and no, it’s not to pay them off from smallest to largest either, although there are some so-called brilliant minds that think that’s a good way. Nope; I think I’ll tell ya to divide the balance of each account by the minimum payment of each and list those from smallest to largest and pay them off in that order. Why? Because I like the room that watching cash flow affords me. At any rate, it doesn’t matter how you paddle down the river so long as you’re headed in the general direction you need to be going, so feel no need to fret on that.
Oh, and don’t keep that student loan around longer than need be, as you juggle between your multiple goals, and you do have multiple goals, ya know. After all, you said you wanted to buy a house, but guess what, buying a house is a smart thing to do, and as you may have guessed it, I’m not giving you the advice of what’s smart. I think you should waste money on rent, and I’m being serious. I think that’s exactly what you need to do, as I don’t think you have any business setting yourself up for endless heartache while trying to raise a child in the midst of having so much debt, and yes, the debt you have needs to be thought of as a lot of debt, not because it isn’t much compared to others but because it’s a heck of lot compared to how much I think you should have. Should you buy a house after getting out of (or getting almost out of) debt? Of course not. I’m conservative, and I think you need to have some savings set aside that’s not earmarked for a house, and I don’t think you do, as I can’t imagine why you would have it now and be in the debt you’re in.
So, you should be working on getting practically out of debt and managing an extremely small amount of it, you should be working on racking up on some savings for those little unexpected (and expected too, I might add) things in life that spring up on us from time to time. Then, you should start saving additional money on top of your savings specifically for a house.
As to your retirement plans, well, I say sit back and relax a little bit and take your newfound direction in for a little bit. You’re twenty-three, and if I’m not mistaken, and I rarely am, you’re probably going to be in more of a hurry than a little bit, and I can guarantee ya that’s going to be your mistake. So, you can do like the smart fellows’ll tell you and start saving for retirement today, or you can listen to a stranger (that’d be me) and say to heck with it for awhile. You get your debt out of the way and savings account up to a respectable level, and after your down payment (you’re itching for) is well underway, then you can start thinking about dabbling in the stock market—preferably establish good growth mutual funds. By the way, I’m a fan of the S&P 500 stock market index (and I only mention it, as it’s been mentioned); in fact, if you only do as good as the market, then over time, you’ll beat more than 95% of the people out there. That’s not saying anything great—just how aweful so many people screw up. To recap, the smart advice is to start planning now while my advice is to say the hell with planning altogether for a little while … there’ll be time enough for that; what you have to learn is to slow down and not allow a yearning to become rich over night impede your progress.
Let’s see, what else is there. Oh yes, a very common and highly intelligent thing to do is not loan the government your money free of charge, so yes, the good advice is to change your withholdings immediately. My advice, of course, is not even remotely related (not even by marriage) to being smart. Nope, not from me, no sirree. I say keep it like it is until later. My thinking, which ain’t all that, as you might have guessed, is that having the refund is like a safety net. After all, you only take training wheels off after a child is equipped to do it right, and being told what to do, and actually having the keen-wittedness to follow through like a computer doesn’t always work out. Once you have proven to yourself that you can budget and manage your money over some time, and once you’ve fallen off the wagon and proven to yourself that you can pick yourself back up again after failing to resist the temptations to buy on credit and go months without a budget, then you can walk bravely into the light of day without the need of a comforting refund check at tax time to put you back on track.
This is turning into a book, so I’ll let this go as is. Hope it helps.
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Sun Jan 29, 2012 5:00 am |
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