It seems like we have a pretty diverse crowd at GDC. So, I was wondering what people's opinions are on money or what their little secrets are that they use for their finances.

Concerning which aspect of finances?

Pretty simple for me. Whatever is left in the checking account on payday gets rolled over to savings. The money I was spending on my car payment goes into three different mutual funds with varying levels of aggressiveness.

I probably won't get rich, but it'll be nice to have a little in case of a rainy day. When I deploy, I put in more money.

My opinion of money is I need more.

Being freshly out of undergrad and now in graduate program but working full time, i don't have too much to spare. I do work for the gov't starting around 40k and over the next three years I will be promoted each year and will receive pay increases. As it stands now, I should be making 65k in 3 years.

Right now I am just trying to pay off bills, so I survive paycheck to paycheck not really being able to save. So i don't have much of investment opportunities. I do have my TSP (gov't's 401k) and a Roth IRA both. I also have a high interest checking account with ING that is earning 4%. Thats about it for investments. I don't have too much left over to invest right now.

I would like to talk to some of the financial advisors on this board about what I should over the next few years. I have a g/f that I have been dating for over 4 years, so that means an engagement ring, wedding, and home is in my future in the next few years.

I bought the gixxer in november, but I am paying $650/month on it right now, so it will be paid off come Feb '07. That is also when i get my first promotion which is an extra $500/month after taxes. So I will have about $1000 extra to play with every month. So i would like to look into investing while also trying to save to pay for previously mentioned items.

Thats my approach...

Oh one last thing I forgot to mention. I work 2 jobs on the side (I do web dev work, so i can work from home) which depending on projects I could make an extra $5k-$10k a year. Now this is contract work, so I have to pay more taxes on it, but still some extra money. What should I do with that? Save it or invest it right now based on my previous post?

Oh one last thing I forgot to mention. I work 2 jobs on the side (I do web dev work, so i can work from home) which depending on projects I could make an extra $5k-$10k a year. Now this is contract work, so I have to pay more taxes on it, but still some extra money. What should I do with that? Save it or invest it right now based on my previous post?

The answer is anything besides spending it is ok. Your savings account should keep up with general inflation so it won't cost you money to have is sitting around, which is a plus. If you decide to invest you are going to want to be extremely conservative for that period of time. For instance, my wife and I (newly married on Dec. 31st as a reference) save $1500 a month into a portfolio of I-Shares that is balanced 50% bonds and 50% equities. The equities are balanced among different asset classes...Large cap, Mid cap, Small Cap (Growth and Value), international and Real Estate. This is probably to complicated for you unless this is a hobby (it is my job so I can monitor it). But an alternative would be a mutual fund that has no front or back loads (b/c the loads would be tough to make up in a conservative portfolio in three years) but is balanced or uses a moderate asset allocation. This will get you a little growth without too much risk. Could still lose money but the risk is much lower because of diversification. pm me if you want any suggestions...i can't give specific advice b/c i am not licensed in your state but i can point you in the right direction and give you some resources. just don't let some dick sell you something he has in his inventory b/c it is good for him.

Pretty simple for me. Whatever is left in the checking account on payday gets rolled over to savings. The money I was spending on my car payment goes into three different mutual funds with varying levels of aggressiveness.

I probably won't get rich, but it'll be nice to have a little in case of a rainy day. When I deploy, I put in more money.

What do you mean by varying levels of aggressiveness? +1 on saving now but i would challenge you to change things up a bit. figure out what you want and what it will take to get there. then start saving that amount now. this will stop you from realizing you are behind in the future and causing you to play catch up...it will also give you guilt free spending b/c you will feel good about knowing you are on track...now that my wife understands our plan she wakes up in the morning excited to work b/c she is working for a purpose instead of a check. just my 2 cents but still awesome that you are doing something which is more than most can say probably!

Concerning which aspect of finances?

what you make, what you spend, what you save or where you save it....what do you do to plan for your future etc. generally an open ended question...:cheers

What do you mean by varying levels of aggressiveness? +1 on saving now but i would challenge you to change things up a bit. figure out what you want and what it will take to get there. then start saving that amount now. this will stop you from realizing you are behind in the future and causing you to play catch up...it will also give you guilt free spending b/c you will feel good about knowing you are on track...now that my wife understands our plan she wakes up in the morning excited to work b/c she is working for a purpose instead of a check. just my 2 cents but still awesome that you are doing something which is more than most can say probably!

Well, I haven't decided where I am going to settle down, so buying a home isn't much of a concern. A new truck a few years down the road would be nice. I don't have a whole lot of expenses, which is a nice plus.

And I meant "aggressive" in terms of my invester profile. I have one growth and income fund, one international fund and one aggressive growth fund.

Well, I haven't decided where I am going to settle down, so buying a home isn't much of a concern. A new truck a few years down the road would be nice. I don't have a whole lot of expenses, which is a nice plus.

And I meant "aggressive" in terms of my invester profile. I have one growth and income fund, one international fund and one aggressive growth fund.

Well it is nice that you are saving...I don't know how old you are so this may or may not interest you. With historical market returns over a 30 year period, you could put $500 a month away and be a millionaire...not a bad goal to have if you have the money to save.

I've started putting %15 of my income into some form of a 401(k) plan since age 22 (now 32). Recently I've backed off justa bit due to a new baby and the wife taking a little time off, but I plan to start maxing out contributions ASAP now that she has retuned to work. My 401(k) contributions are mostly in funds targeted at Large Cap, Mid CAp, growth and income, and agressive with some bonds and what not thrown into the mix for diversification - hey, I'm still a long way from retirement. I also work for a company that has a very promising ESOP program, which if it continues with historical growth will outpace my 401(k) retirement savings. Other than that I try to have some liquid assests in savings, but lately those have dwindled on the temporarily single income family situation.

I am a big fan of no load mutual funds. Currently my portfolio consists of:

25% - Aggressive Growth

40% - Growth

20% - Growth and Income

15% - International

95% of my portfolio are in stocks. I have plenty of time until retirement and don't mind riding the ups and downs of the market. I'll probably slowly start moving to bonds in the next 10-15 years.

As far as my finances go, they suck right now, but at least things are getting better for a change.

I didn't make jack shit while I was in school, so debt was just accumulating.

Now I've got a job, but have a credit card and a motorcycle to pay off, plus I could really use a new car. The gixxer was my daily driver in college.

So my first priority is to get out from under the 2 burdens I have now that aren't the best interest rates. Getting a reliable cage to get me to work is high on my list of things to do, and the interest rate on a car loan should be much more reasonable.

Once my situation is improved, it's time to start saving up for a rainy day/planning my retirement. I'm 26 years old now, and I'm between 20 and 30 years away from retirement age for work. I'd like to be able to retire in 10 years should I want to, or to pick up and move somewhere more rural and twisty.

Well it is nice that you are saving...I don't know how old you are so this may or may not interest you. With historical market returns over a 30 year period, you could put $500 a month away and be a millionaire...not a bad goal to have if you have the money to save.

I'm 30. And the military doesn';t quite pay me that well!

I've started putting %15 of my income into some form of a 401(k) plan since age 22 (now 32). Recently I've backed off justa bit due to a new baby and the wife taking a little time off, but I plan to start maxing out contributions ASAP now that she has retuned to work. My 401(k) contributions are mostly in funds targeted at Large Cap, Mid CAp, growth and income, and agressive with some bonds and what not thrown into the mix for diversification - hey, I'm still a long way from retirement. I also work for a company that has a very promising ESOP program, which if it continues with historical growth will outpace my 401(k) retirement savings. Other than that I try to have some liquid assests in savings, but lately those have dwindled on the temporarily single income family situation.


that is awesome you save that much or your income, but you ought to consider diverting part of you contributions to something like a roth ira if you are eligible b/c you will need tax free income in retirement as well. otherwise taxes could b your biggest burden...keep up the good work! :punk

that is awesome you save that much or your income, but you ought to consider diverting part of you contributions to something like a roth ira if you are eligible b/c you will need tax free income in retirement as well. otherwise taxes could b your biggest burden...keep up the good work! :punk

My company just added the Roth 401(k) to its plan options this month. If I were to keep contributing the same pre-tax amount to retirement savings (i.e. adjust the Roth contributions for taxes), what percentage of my total contribution would you recommend contributing to traditional vs. Roth? I've been meaning to play the numbers game, but I just haven't had a chance lately.

The answer is anything besides spending it is ok. Your savings account should keep up with general inflation so it won't cost you money to have is sitting around, which is a plus. If you decide to invest you are going to want to be extremely conservative for that period of time. For instance, my wife and I (newly married on Dec. 31st as a reference) save $1500 a month into a portfolio of I-Shares that is balanced 50% bonds and 50% equities. The equities are balanced among different asset classes...Large cap, Mid cap, Small Cap (Growth and Value), international and Real Estate. This is probably to complicated for you unless this is a hobby (it is my job so I can monitor it). But an alternative would be a mutual fund that has no front or back loads (b/c the loads would be tough to make up in a conservative portfolio in three years) but is balanced or uses a moderate asset allocation. This will get you a little growth without too much risk. Could still lose money but the risk is much lower because of diversification. pm me if you want any suggestions...i can't give specific advice b/c i am not licensed in your state but i can point you in the right direction and give you some resources. just don't let some dick sell you something he has in his inventory b/c it is good for him.


Bonds are a great idea if you are 70, otherwise not a great idea

I have a 401k with good investment choices and a great match (dollar for dollar up to 7.3%), plus Profit Sharing (historical average around 8% of gross) with good investment choices as well - both through my employer. Additionally, I have two Roth IRAs, one each for Wifey and me. Outside this, I have 3 529 college-saving plans for my kids. We started very early on these, and it looks like Dad shouldn't have to be writin' any checks. My oldest kid is 10, and if you ask him what the Old Man is payin' for, he'll recite "4 years in-state". That's it. I also have a taxable joint account at a mutual fund company for the purposes of buying, cars, bikes, and real estate (just my house, no investment property). My emergency fund (around 5 months worth of expenses) is in a money market account at the same mutual fund company. I can write checks in an emergency directly off this account. Normal saving and checking at a local branch of a national bank handle bills and savings for smaller household projects.

All of this happens automatically. Once you decide you should do it - do the Nike Thing and Just Do It. Set up auto-drafts for your investments. Start 401k withholding at least up to your matching percentage. Personally I give first, save second, and pay my bills and entertain myself with what's left over. I don't use credit cards. I don't even own one and haven't for 4 years. I don't borrow money and have found it's amazing how much more of it you have when it's not all spoken for by some bank even before you get it. I don't buy new cars, I let some other sap take the butt-kicking on the depreciation. Car payments are the Yellow Brick Road to Fiancial Mediocrity. I drive a 1987 Mercedes diesel with 230k miles on it and don't care what the Sequoia Snobs in the kid-pickup line at school think because they're broke. I have a financial advisor and my investments are uncomplicated, except for the alphabet soup the IRS invented to name them all. I don't trade single stocks because I know most people vastly underperform the market when they do. I live on a budget, which means my wife and I tell our money where it's going instead of wondering where it went. I set all this in motion on an income that was decidedly average, so don't go thinking this is all rich people only stuff. You can do it, but you have to ignore a steamship load of crap advise from our current culture. Just remember that most people are broke, so if they think you're crazy, you're probably on the right track.

My company just added the Roth 401(k) to its plan options this month. If I were to keep contributing the same pre-tax amount to retirement savings (i.e. adjust the Roth contributions for taxes), what percentage of my total contribution would you recommend contributing to traditional vs. Roth? I've been meaning to play the numbers game, but I just haven't had a chance lately.

well it is tough to say b/c i don't know your situation. as a general rule, i try and balance my clients funds as follows. there are three buckets you can put your money in taxable, tax deferred and tax free. taxable is anything like a money market or brokerage account or anything you pay taxes on an annual basis. tax deferred is like a 401 k, traditional ira or annuity. tax free is a roth ira, roth 401k or possibly the cash value of investment grade life insurance. i strive for a 30, 40, 30 balance. the tax deferred is overweighted b/c of the match in the 401k. if you earn a high income and will spend less in retirement then put it in tax deferred. if you will have a comparable income in retirement then balance it out b/c no one knows what taxes will be in the future. if you will spend more then overweight tax free. hope this helps.

Bonds are a great idea if you are 70, otherwise not a great idea

wrong fixed income is a time frame and risk tolerance measure and has absolutely nothing to do with age.:hammer

I have a 401k with good investment choices and a great match (dollar for dollar up to 7.3%), plus Profit Sharing (historical average around 8% of gross) with good investment choices as well - both through my employer. Additionally, I have two Roth IRAs, one each for Wifey and me. Outside this, I have 3 529 college-saving plans for my kids. We started very early on these, and it looks like Dad shouldn't have to be writin' any checks. My oldest kid is 10, and if you ask him what the Old Man is payin' for, he'll recite "4 years in-state". That's it. I also have a taxable joint account at a mutual fund company for the purposes of buying, cars, bikes, and real estate (just my house, no investment property). My emergency fund (around 5 months worth of expenses) is in a money market account at the same mutual fund company. I can write checks in an emergency directly off this account. Normal saving and checking at a local branch of a national bank handle bills and savings for smaller household projects.

All of this happens automatically. Once you decide you should do it - do the Nike Thing and Just Do It. Set up auto-drafts for your investments. Start 401k withholding at least up to your matching percentage. Personally I give first, save second, and pay my bills and entertain myself with what's left over. I don't use credit cards. I don't even own one and haven't for 4 years. I don't borrow money and have found it's amazing how much more of it you have when it's not all spoken for by some bank even before you get it. I don't buy new cars, I let some other sap take the butt-kicking on the depreciation. Car payments are the Yellow Brick Road to Fiancial Mediocrity. I drive a 1987 Mercedes diesel with 230k miles on it and don't care what the Sequoia Snobs in the kid-pickup line at school think because they're broke. I have a financial advisor and my investments are uncomplicated, except for the alphabet soup the IRS invented to name them all. I don't trade single stocks because I know most people vastly underperform the market when they do. I live on a budget, which means my wife and I tell our money where it's going instead of wondering where it went. I set all this in motion on an income that was decidedly average, so don't go thinking this is all rich people only stuff. You can do it, but you have to ignore a steamship load of crap advise from our current culture. Just remember that most people are broke, so if they think you're crazy, you're probably on the right track.

well said:cheers

well it is tough to say b/c i don't know your situation. as a general rule, i try and balance my clients funds as follows. there are three buckets you can put your money in taxable, tax deferred and tax free. taxable is anything like a money market or brokerage account or anything you pay taxes on an annual basis. tax deferred is like a 401 k, traditional ira or annuity. tax free is a roth ira, roth 401k or possibly the cash value of investment grade life insurance. i strive for a 30, 40, 30 balance. the tax deferred is overweighted b/c of the match in the 401k. if you earn a high income and will spend less in retirement then put it in tax deferred. if you will have a comparable income in retirement then balance it out b/c no one knows what taxes will be in the future. if you will spend more then overweight tax free. hope this helps.

Thanks for the input!

wrong fixed income is a time frame and risk tolerance measure and has absolutely nothing to do with age.:hammer

I guess you could not invest in dividend paying stocks. There are even some with pretty high dividend yields maybe in the real estate, utilities, and financial services sector. Oh and what about the volitility of stocks and the risk of losing money? that is why they invented options. Sell some calls and buy some puts with the proceeds.

you-> :hammer <-me


Since you like to talk about taxes, what does the new tax law say about dividends and taxes?

I hope you are not like every other financial planner. A salesman with a degree in leisure management.

I guess you could not invest in dividend paying stocks. There are even some with pretty high dividend yields maybe in the real estate, utilities, and financial services sector. Oh and what about the volitility of stocks and the risk of losing money? that is why they invented options. Sell some calls and buy some puts with the proceeds.

you-> :hammer <-me


Since you like to talk about taxes, what does the new tax law say about dividends and taxes?

I hope you are not like every other financial planner. A salesman with a degree in leisure management.

LOL. I am glad that you have it all figured out, but I am still right. Furthermore, I'm not sure what your point was. If you were inferring that I am an idiot b/c of my profession and that I churn peoples accounts with options to make money, while I can understand your sarcasm because of the industry, I am offended. The only clients I have that even use options are the top 5% of my client base and that is a pretty aggressive guess. The only reason they are used is to hedge an existing position, which is their original purpose, and it is usually on stock options or restricted stock that they can not excercise or something of that nature. As to my education, I have a degree in finance from Saint Louis University. I have both the series 7 and series 66 licenses as well as a health and life insurance license. The only designation that I currently carry is the CRPC. Which means that I am a retirement planning specialist. The licenses I have mean that I can do whatever my clients need me to do, and if I make a recommendation it is in their best interest and not my own. Now I would like to hear your credentials and the justification that you would give someone for listening to you over a PROFESSIONAL. I will await another dose of sarcasm in an attempt to hide your lack of intelligence.

I have degrees in both finance and accounting, as well as currently working to complete my MBA from the ohio state university. I dont think recommending a portfolio with any significant positions in bonds for a younger investor is the best way to go. If you are looking to develop a fixed income and are of the younger sort, dividend paying stocks hedged with options is in most cases a better way to go, especially when you have a professional such as yourself watching over.

Next I said that I hope that you are not like the others. Not you are like the others. so please get off of your high horse. I have several friends that I went to school with who are financial advisors and none of them were finance majors, the finance majors went on to invest the money of large corporations or become consultants to large corporations. They did not live in Kansas investing the money that some dumb hick saved in a coffee can.

So if you are more of a professional than me because you have you licenses or because you have a lesser education so be it.

Just be carefull with your advise because you are dealing with peoples livelyhood. I prefer to give them the education and resources needed to make an educated decision themselves.

I have degrees in both finance and accounting, as well as currently working to complete my MBA from the ohio state university. I dont think recommending a portfolio with any significant positions in bonds for a younger investor is the best way to go. If you are looking to develop a fixed income and are of the younger sort, dividend paying stocks hedged with options is in most cases a better way to go, especially when you have a professional such as yourself watching over.

Next I said that I hope that you are not like the others. Not you are like the others. so please get off of your high horse. I have several friends that I went to school with who are financial advisors and none of them were finance majors, the finance majors went on to invest the money of large corporations or become consultants to large corporations. They did not live in Kansas investing the money that some dumb hick saved in a coffee can.

So if you are more of a professional than me because you have you licenses or because you have a lesser education so be it.

Just be carefull with your advise because you are dealing with peoples livelyhood. I prefer to give them the education and resources needed to make an educated decision themselves.

first of all i believe i mentioned that the bonds are only for short term investing or for someone who needs income. in my case i have a short time frame for the investment i shared with you. that is one portfolio with a specific purpose. my retirement accounts are 100% equity b/c i have the time to take advantage of the volatility. when it comes to preferreds i agree except there is no need to hedge. if you want to use a hedge then you need to use common stocks. preferreds don't fluctuate enough to justify the cost (in my opinion). they fluctuate with interest rates and potentially credit quality if it is low enough. a stock option is meant to take away the volatility experienced in an open market. as to my education we are obviously using our degrees for different purposes and an MBA is pointless in my career. as to your friends, good for them. i chose to be a business owner and make my own way instead of getting paid what someone else thinks im worth. that is why i make what i make at age 23, and it will only go up with my hard work. as to the hicks in kansas, the county i live in is one of the richest counties per capita in the country. some of the people i know probably own the companies that your finance friends consult for or invest money for. so think what you will but there is plenty of money and cost of living is next to nothing compared to those "Big Cities". as to my advice, im not giving any advice on here either. i am merely sharing my opinions and i like to try and make more people aware of the financial world. giving any kind of advice over a forum would be ignorant b/c there is not enough information shared. nor should there be. so, keep being pissed but i think we have the same intentions with different philosophies. given your background you should have a pretty good idea of what you are talking about so hopefully everyone takes everything said with a grain of salt and learns something in the process.

for me, ALOT of little thing add up and go along way. check my other post on the 0% credit card thing.

but basically save where you can so you can spend more on what you want to.

heres a few quick ones just around the house that most should already know-
-turn off your lights etc when you leave the room
-make sure your place is insulated well (around doors, windows) to better retain the temp you want it to be wether hot or cold
-load a shampoo bottle with rocks +water and put it in the corner of your toilet away from any mechanisms. youll save that much water every flush.
-wash only full loads. hang your clothes instead of drying them
-hand wash your dishes
-water your lawn early or late. not when the sun is beating down and evaporating the water that your lawn could be sucking in
-bucket wash your bike/car
-know what you want out of the fridge and or freezer instead of standing there with the door open. also most people have theirs set too high. lower it
-use covers for pots n stuff on the range and keep the heat in to cook/boil faster
-MAKE and COOK your own meals instead of eating out/ordering in. even buying premade groceries is way cheaper than going out to eat.
save all your eating out receipts for a month and you'll probably be shocked to see what it all adds up to. inc tips, drinks, gas to get there etc. One decent meal outside runs me 3 decent meals at home.

I didn't really read through the replies, as I'm short on time right now, but here it goes.

Being as I'm a banker, finance is my life. Both at home, and at work. I've seen some of the most interesting financial situations, from 18 year olds with 500$ car payments, and 300$/mo insurance payments, with no place to live but with their parents; all the way to the guy bringing in 65,000$/mo with a 7,000$/mo mortgage payment (he's a good customer of mine, and is some kind of specialist surgeon).

As far as my own finances go. I make a decent amount of money for a 19 year old. But here is the trick that everyone with money will tell you. There's no secrets, no big trading tip. It's so painfully obvious, that it's obscure.

Pay...yourself...first...

Set an amount that you will put away. Mine is 400$/mo. I get paid twice a month. So 200$ immediately goes to my ING account. Bam! Right out of my paycheck. I don't even see it. That money then sweeps over into my investment accounts.

Then, I pay my bills, and set the rest of my money aside for play. If you can't afford to do this, then, I'm sorry, but you can't afford your lifestyle. You will be living paycheck to paycheck for the rest of your life. That's no way to live, is it?

As far as I'm concerned, I'd rather be paying myself 400$/mo, than anybody else. Yes, I've had to make some changes, having 100$ less in spending money every week. My girlfriend and I don't eat out as much; we stay home and cook meals together (which is just as fun, usually ends up messy). We don't go to the movies often. But, I have a 401(k), stocks, and mutual funds. And I've only been in the game for a year.

How can I manage this on an income thats... Average at best? I pay myself first, and am smart with my money.

The biggest killer of finances is impulse buying. If you didn't go to a store SPECIFICALLY to buy something, DO NOT buy it. If you do, you just fell prey to some sort of advertising scheme.

Here's how it works, for the more dense crowd. If you were OK without that item for (insert age here), and all-of-the-sudden you NEEDED it (just because you saw it)... I think you will be okay for another few years without it.

I don't go out and go shopping. I know what I need, I go to the store, and I buy it. If I want something nice, I save up for it.

If you are salary, figure out your "hourly" wage. Say it's 20$/hr. Now you have an item thats 65$. Before you purchase it, tell yourself "Is this item worth over three hours of my hard work?".

That about covers it. Pay youself first, into a high-yield account, or investment account; be smart with your money; eliminate impulse buying. You will be well on your way to being successful.

For the finance guru's here. I don't think it's smart giving out specific investment advice over the internet. Everyone's financial situation is totally unique, and requires a good look to determine the right path(s) to take when it comes to investments.

I believe in the pay yourself First mindset, and have been implementing that for about 2 yrs now. Also a main focus of mine for the last 2 yrs is to become debt free, I've paid alot of things off, and reduced my monthly bills quite substancially over the last few yrs. I've increased my Networth as well, to the point that I no longer owe more than I have in investments, and possessions :cheers


Currently I put about 15% of my Gross Salary into an RRSP account, deducted from source. As for the RRSP account, its an account I manage, and I buy my own Mutual funds, its diversified fairly well, so that risk is minimized. If I continue at this rate, being 28, I would have well over a million at retirement, and could likely retire at age 60.

I am agressively saving as well, I put 1000$/mnth into an ING Savings account @3% interest. I am not putting this into mutual funds yet, because I need easy access to it, because as the balance gets high I will put a lump sum on debts. Ex. I paid off the remainder of my Bike loan, 4600 last week. What is left over from my Pay, after My savings contributions come out, is used for monthly bills, Phone, Cable, Inet, Gas, groceries, and I also budget in about 60/wk for spending habits, because to need to have some floating cash.


My Goals in order of relevance (next to happen!)

1. To be debt free, (CC balance is low, I am paying off another debt, which should be paid off by August, or sooner if My Bike sells.)
2. Put down $3-4000 down on the purchase of a new (well actually used!) Vehicule, which I plan to buy in the next 3-4 mnths.
3. Put at least 10% down for a home purchase next year, and have $10 000 cash for appliances/Furniture, and not have to fianance these things. (I plan to use the homebuyers plan, which allows you to borrow from your Own RRSP's, at 0%, and pay back over a 15yr period)
4. Keep 5-10 000 as a reserve fund in a savings account or Mutual Funds.

In general...


1. Pay yourself at least 10% of all income

2. Make the 10% or more work tirelessly day and night

3. Educate yourself. Do not invest in businesses or purposes with which you are not VERY familiar

4. Do not try to force your 10% toward over optimistic or implausible returns

5. Know the difference between an asset and a liability.


Just a few basics I try to keep in mind at all times.:)

In general...


5. Know the difference between an asset and a liability.


Just a few basics I try to keep in mind at all times.:)

Good point, but I'd go further and say you should know, with a fair amount of accuracy, what your networth is. I mean obviously you can't be expected to know within the dollar amount, but within 1-2000$ at least.

I created a Budget XL doc, where I keep track of my monthly Bills/expenses, well just a detailed budget, as well as a networth tab, and a Savings target tab. So I can see where I am, where I was, and where I can expect to be in a year from now.

Good point, but I'd go further and say you should know, with a fair amount of accuracy, what your networth is. I mean obviously you can't be expected to know within the dollar amount, but within 1-2000$ at least.



Agreed.

6. Know your net worth


But I was actually refering to the huge number of people who actually don't understand the difference between an asset and a liability. Take a single family home for example. JoeBlow bought it for $X 5 years ago and it just appraised at $100K over the original purchase price. So it's an asset right?

But is it? Is it an asset today? Right now?

Sure, Joe's home is worth 100 large more on paper than what he paid for it. Meanwhile, he's making bank strokes, paying property taxes and utilities, maintaining the home and perhaps even improving it.

All these things are causing money to flow OUT of Joe's pocket(liability)...not into his pocket(asset)

Just my .02

I didn't really read through the replies, as I'm short on time right now, but here it goes.

Being as I'm a banker, finance is my life. Both at home, and at work. I've seen some of the most interesting financial situations, from 18 year olds with 500$ car payments, and 300$/mo insurance payments, with no place to live but with their parents; all the way to the guy bringing in 65,000$/mo with a 7,000$/mo mortgage payment (he's a good customer of mine, and is some kind of specialist surgeon).

As far as my own finances go. I make a decent amount of money for a 19 year old. But here is the trick that everyone with money will tell you. There's no secrets, no big trading tip. It's so painfully obvious, that it's obscure.

Pay...yourself...first...

Set an amount that you will put away. Mine is 400$/mo. I get paid twice a month. So 200$ immediately goes to my ING account. Bam! Right out of my paycheck. I don't even see it. That money then sweeps over into my investment accounts.

Then, I pay my bills, and set the rest of my money aside for play. If you can't afford to do this, then, I'm sorry, but you can't afford your lifestyle. You will be living paycheck to paycheck for the rest of your life. That's no way to live, is it?

As far as I'm concerned, I'd rather be paying myself 400$/mo, than anybody else. Yes, I've had to make some changes, having 100$ less in spending money every week. My girlfriend and I don't eat out as much; we stay home and cook meals together (which is just as fun, usually ends up messy). We don't go to the movies often. But, I have a 401(k), stocks, and mutual funds. And I've only been in the game for a year.

How can I manage this on an income thats... Average at best? I pay myself first, and am smart with my money.

The biggest killer of finances is impulse buying. If you didn't go to a store SPECIFICALLY to buy something, DO NOT buy it. If you do, you just fell prey to some sort of advertising scheme.

Here's how it works, for the more dense crowd. If you were OK without that item for (insert age here), and all-of-the-sudden you NEEDED it (just because you saw it)... I think you will be okay for another few years without it.

I don't go out and go shopping. I know what I need, I go to the store, and I buy it. If I want something nice, I save up for it.

If you are salary, figure out your "hourly" wage. Say it's 20$/hr. Now you have an item thats 65$. Before you purchase it, tell yourself "Is this item worth over three hours of my hard work?".

That about covers it. Pay youself first, into a high-yield account, or investment account; be smart with your money; eliminate impulse buying. You will be well on your way to being successful.

For the finance guru's here. I don't think it's smart giving out specific investment advice over the internet. Everyone's financial situation is totally unique, and requires a good look to determine the right path(s) to take when it comes to investments.
nice. :cheers ++ rep

some people just cant do it i guess because they were either spoiled or just taught 'to live for today'. $$ in their hands is money that needs to be spent. it frustrates me all the time to hear people i work with or know living paycheck to paycheck and then they cant figure out its their lifestyle that is dictating that. even with direction and TRYING to show them the light. :shrug:

Rev. Intrigue, poacher, Moss, and gixxsexR have this figured out.

Many on the boards for the more modern bikes really need to read their posts. It warms my heart when I see younger men who have embraced the ideas of saving in order to build wealth, budgeting (controlling your money vs the lack of it controlling you), resisting impulse buying (actually thinking - distinguishing between needs and wants), getting out of debt (it works. Every time. Trust me.)

Do you know how many 40 years olds live with the daily regret of "what could have been" in terms of money? They look back and say 'if I had only saved 200 lousy bucks a month'. Most of them still can't figure out that they've got to start right fricking now, today, before lunch, and make a radical change because now they think it's hopeless. It's not, but they've been living beyond their means for so long they can't see any other way. They'll retire with not nearly enough money while driving a nice, leased, M5 BMW.

The reason it warms my heart is that you guys are the antithesis of the above - with a plan in motion and habit patterns in place which will make you millionaires sure as the sunrise.

Rev. Intrigue, poacher, Moss, and gixxsexR have this figured out.

Many on the boards for the more modern bikes really need to read their posts. It warms my heart when I see younger men who have embraced the ideas of saving in order to build wealth, budgeting (controlling your money vs the lack of it controlling you), resisting impulse buying (actually thinking - distinguishing between needs and wants), getting out of debt (it works. Every time. Trust me.)

Do you know how many 40 years olds live with the daily regret of "what could have been" in terms of money? They look back and say 'if I had only saved 200 lousy bucks a month'. Most of them still can't figure out that they've got to start right fricking now, today, before lunch, and make a radical change because now they think it's hopeless. It's not, but they've been living beyond their means for so long they can't see any other way. They'll retire with not nearly enough money while driving a nice, leased, M5 BMW.

The reason it warms my heart is that you guys are the antithesis of the above - with a plan in motion and habit patterns in place which will make you millionaires sure as the sunrise.


I'm hurt...I started the thread and recommended saving money and having goals and I don't get to be a millionaire:confused ;) ;)

lmao sorry mang. i didnt do it.

but ME a millionaire?? O.o i kinda doubt it even though i know thats the WRONG way to think and i should actually PLAN on it.. because it is still very possible....


i just need to start buying more houses : P


KC maybe we can partner up and btw the two of us make a mill. hahahHAha

thx dorkfish +

Rev. Intrigue, poacher, Moss, and gixxsexR have this figured out.

Many on the boards for the more modern bikes really need to read their posts. It warms my heart when I see younger men who have embraced the ideas of saving in order to build wealth, budgeting (controlling your money vs the lack of it controlling you), resisting impulse buying (actually thinking - distinguishing between needs and wants), getting out of debt (it works. Every time. Trust me.)

Do you know how many 40 years olds live with the daily regret of "what could have been" in terms of money? They look back and say 'if I had only saved 200 lousy bucks a month'. Most of them still can't figure out that they've got to start right fricking now, today, before lunch, and make a radical change because now they think it's hopeless. It's not, but they've been living beyond their means for so long they can't see any other way. They'll retire with not nearly enough money while driving a nice, leased, M5 BMW.

The reason it warms my heart is that you guys are the antithesis of the above - with a plan in motion and habit patterns in place which will make you millionaires sure as the sunrise.

You're exactly right. I'm in that precise position. 40 years old, just now finding out what it takes to become a multi-millionaire. And I barely have enough time, even though I started in a 401(k) when I was 27.

To put it simply, if someone had taught me this stuff when I was 18 and had successfully sold it to me, I would have been a multi-millionnaire and would have retired five years ago. Can you imagine? Retiring at age 35? If you can, and you're under age 25, get started now. The numbers work.

Now, having said that, I did finally get started on a 401(k) with a great company when I was 27 and I'll have a couple million when I retire at 67. That's nice, at least. The other good news is, I've run the numbers for people starting out at the age of 40 and yes, you CAN become a millionaire by retirement if you start working on it NOW.

Nice thread.

--Wag--

well, i dont make anything, but i dont spend anything either... but, i got out of college with no cc debt, no loans, no car payment, etc.
i do some contract work right now that pays my bills, and am actually trying to get 2 more jobs. (im hanging out in my college town for fun/my gf)

this said, ive still managed to max my roth 2 yrs in a row, and haven't had to dip into my savings (which is pretty substantial due to wise parenting)

i definitely want to save more than this though, but im only 23, so its not too late, the IRA is my goal right now, my other investments are working pretty hard, but i want to start hitting them every month, instead of larger sums here and there (so that i will naturally buy more when cheaper, and less when more expensive)

im really lucky i started my adult life with 2 significant portfolios though, what a great advantage!

The other good news is, I've run the numbers for people starting out at the age of 40 and yes, you CAN become a millionaire by retirement if you start working on it NOW.
--Wag--

I sure hope so:) - 43 here and the soon to be ex-wife is getting close to half of my $$$$. I need to revaluate my retirement plan based on one income.

I sure hope so:) - 43 here and the soon to be ex-wife is getting close to half of my $$$$. I need to revaluate my retirement plan based on one income.

At least you're willing to put in the time and effort to work on it. You'll be glad you did.

--Wag--

On a monthly basis of course I pay off any fixed costs. On average I save about 68% of my income. Half of that goes into a money market savings, the other half I transfer into my brokerage account for investment purposes.