Roth IRA started in Vanguard 10K Love your blog! You have alluded in your previous posts that you consider well researched rentals to be a good investment and have owned them yourself in the past. Republic Wireless and my $19 per month phone plan. She saw your behavior for her whole life, which matters far more than your words in the long run. Kenya I should have said, Love the blog, agree with everything I have read SO FAR because, yeah, I have a short attention span and a six year old, of course I havent read everything. Well, there was the stagflation of the 1970s, the crash of 87, the tech collapse of 2000 and that little dust-up in 2007-8. But that leads to another question. You might be thinking Im overstating this. Along these lines you might be interested in my conversation with Lisa P above. Right now I am trying to choose between the following: As for the allocation, if your goal is FI ASAP Id tilt to 100% stocks. But they are NOT a wealth building tool. I have a suggestion for a title such as the story of the prodigal daughter or something to that extent. For you, my daughter and other young people thats the best way to think about the market. So, what does a month in Ecuador cost anyway? Sounds like you are on a great path. my core belief is not only should investing not be complicated, simple gets better results. 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. Ive continued to read other comments and am finding the answers to all of my own questions I guess Ill be opening both a Roth IRA and a regular investment account, from which I can draw before the 59.5 restriction on my Roth IRA. Dame Joan Collins had a treat in store for fans this week. To answer that question would take a whole series of posts. After college I went To Peace Corps and never looked back. As you say, there is so much conflicting information out there, I have often wondered how those who chose to embrace my ideas come to do so. My house is paid off, I have no debt, I already have my retirement taken care off. Pay off my credit card at the end of every month, if I charge purchases. Expect More. But this was pretty small. You have also taught me to keep it simple. The 9% is the average total return, which includes capital gains. 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. Republic Wireless and my $19 per month phone plan. Warren Buffett, the greatest investor of my age, said When others are fearful be greedy. Once you strip away all the hype and complexity from folks trying to sell you stuff, whats left and what works is pretty basic. Oh, and I am hard at work on the book. 10 years of investing, all things being equal, will take you exactly as far whether you are 20 or 60. After college, I have two options: joining the wonderful world of work or going to law school. Thank you so much and I will definitely be coming back to your site every day . After reading some of your blog posts Im second guessing myself if this is a good choice. While the feeling of envy might be strongest in Shanghai, where stocks are still almost 50 percent down from their 2007 peak, spare a thought for Japans beleaguered investors who last saw a record high back in 1989.. https://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/. Choose from Same Day Delivery, Drive Up or Order Pickup. I understand IRAs but not so much Investments. I would like to know what is the best way to save money for my 2 little boys. Now I just need to make time to have a little wander around here. People still refuse to believe I have never had a car payment. I think our greatest leaders throughout history were hunters capable of thinking and moving quickly from one thought to another. However, my parents told me all through high school (we had the Talk about college when I was 13) that they were giving me $X for college, the same amount that my older sister got. income pretax 90k Very nice cash flow to work with. Love the advice and the post on F- you money! We are also in the process of educating our daughter on finances. Its best to take action based on what we know now. As promised, Im here to update you on my progress to the FU money over the last year. While the strategies here should easily translate, Im afraid my knowledge is too US centric for me to comment on what is available in Canada. If you havent already, please read the stock series on this blog for more. That is the highest praise of all. Anyway, thanks for the comments and, as always, I look forward to your next post. In looking around the internet, not exhaustively mind you, but poking around, it looks like a few places such as: https://www3.troweprice.com/rws/rps/public/assets/ffs/VTSAX.pdf, http://news.morningstar.com/articlenet/article.aspx?id=566429. Thats where the most beautiful travel is for me. Also glad you are reading the Mad Fientist. In short, I dont believe timing the market is possible. Anytime you can live off it you are financially independent. Willing to go a step further? 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. Can you please cater your advice to financial geek to be like me? Thats a big goal around here! My kids, whether on their own or through the efforst of my wife and I, do well with their emotions and behavior. Regular or Roth IRA? Are you kidding? Everything has its own timing. Thanks for your work. That chart you posted from your friend Darrow, it doesnt seem realistic. I have an experiment that I have been piecing together and will know in 13 years how it turns out. They are expensive at best and will rob you at worst. I like what little I have read so far. If you do, live off your investments and invest 100% of your income. I have VTI (the ETF, and I just looked and it has more than $3,000 in it.) Should I still contribute to the 401k and build to a Roth containing VTSMX? We could potentially save up to 2000 a month. Lebanon 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. 401k employer match first 5%, I put in additional 10% (15% total own contribution) Wife doesnt have one or any retirement account yet. So, this is not a gospel, but a guideline. Lastly, while owning 4-10 rental properties can certainly effectively get you to FI, you really are no longer on The Simple Path. . Report DMCA Overview Not pure enough. So, that is the basis of my mad scientist ideas. 4) Save a portion of every dollar you get. As you mentioned, after 5.3 years of $6000 monthly contributions ($72k/year), at an 8% rate of return, the nest egg would be $476,477. This is a decades long plan. Think this is too extreme? A few years back I actually lost a friend over this. You can always withdraw your Roth contributions penalty and tax free. We currently only have 1 new car payment at 7 months old out of 3 vehicles and a mortgage with about 25 years left. If I was in the states, Id be sinking most of it into VTSAX however I am from Australia and currently living in Canada. Requirements: They work 40 hrs/wk or volunteer if work is unavailable. Perhaps Im being a bit optimistic on being completely FI within 5 years. Many financial geeks, but certainly not all, tend to have trouble accepting this. I think what you are asking is if you need non-tax advantaged accounts to live on before you turn 59.5. Ive removed that paragraph from my reply to Dan. Or not. Filed Under: Money, Stock Investing Series, Cat food. Those that we have [Continue Reading], Greetings! That is how I got to 2025 as the end of my experiment (but these ideas are all in the formative stages and subject to change as data come in). Id rather start earning money instead of living off of my dearly beloved parents. Otherwise youll have to wait for Heaven to see a return on this investment . Im an idiot, but an idiot that learns quickly or maybe not so quickly. Debt free. I should do a post of withdrawal rates one of these days. Welcome to the blog and thanks for participating. Is it too late for me to follow these steps such that I could be free in 10 12 years or sooner or do no longer have time to make this work? The less you need, the more free you are. The subscribe is a no-brainer! Youll probably also understand why you lost money with your broker. Her retirement plan is under the Texas Retirement System with currently 18 years of service. . This is episode number 116 featuring Jim Collins from jlcollinsnh.com. 7) Realize the market and the value of your shares will sometimes drop dramatically. It is your financial freedom. Im very interested in personal finances and have dreams of being financially independent one day. It gives me hope that I can influence my quality of life with the decision to invest. I'm not a financial advisor or an investing expert. feels good, doesnt it?! Thanks for the stock series, its been refreshing to finally close the chapter on this researching phase I spent too much time on. But we can speculate on what might happen forever. The details will vary country to country, but the principles still apply. Notice what you are not doing: 1)Avoid fiscally irresponsible people. Is it something I should ignore and go on and buy or am I missing a trick? The 88-year-old Hollywood star . (Im shooting for an early retirement btw). You are one of the most astute finacial guys I know. Your original post came in while I was traveling this summer and somehow I missed it catching up when I got back. Zanzibar South Sudan How much you like those will determine the allocation. Im a good saver and Im trying to figure out the financial world to make my money work for me, mostly by reading your stock series. If I am able to, then I am interested in pursuing this with anyone who has an interest. I just dont want to have to think about it and manage it.. Thank you for compiling such as straight-forward, easy-to-remember list that can be useful to anyone. The deal with $X was that I got to keep the extra (the converse of having to make up the difference), so I have a pretty nice stash for someone who is 20. So annuities are a way to provide an income stream. Do this for four years and a year before they start you will have all the money needed ready to go. Okay, Jim Make sense? Creator. Stocks -- Part XIII: The 4% rule, withdrawal rates and how much can I spend anyway? And assuming having to adjust your lifestyle would be unacceptable. Also looks like theres an option to convert it to ROTH 401k. Bought my car cash. If they are, she has accepted a much lower payment, certainly nothing close to 10%. Malachi linked me this. If you retire before 59.5, there are also some great stratgies for pulling IRA/401k money before. The 1.68% is the dividend yield on VTSAX at the time I wrote this post. very true. and thanks for the kind words. JL Collins is a financial expert and author. It doubled. Money management is very important and teaching my daughters this fact, is one of my goals also. Once you hit 10k, Vanguard will automatically upgrade your fund to VTSAX and its Admiral status for even lower cost. If I opened up the VTSMX as an investment, how do I even access my money if I needed to? In "The Simple Path to Wealth," Collins urges readers to be careful about accruing debt and recommends a simple formula to help prioritize paying it off. 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