Do not despair.Your debt is good debt and you enjoy your job.No-one can do it better than you can despite all the promises.
I started a family at 20(4kids).
I have worked as a labourer most of my working life and my sums add up as good as the big earners.
Why? Because I had patience.
Time is your biggest asset.
I'm 26
Have £1500 in premium bonds
No other savings
But no debt (£400 in credit and I only have one bank account)
Combination of working and being at university from 18 to 26, takings years out to work and not study, has led to no debt even after five years of studying, but also no savings.
I did the best I could.
Sounds like the ravings of a so called financial advisor.
One major reason that I am up there with the big earners in accumulating wealth is because I never gave any to you parasites.
Snatch wrote:
Sounds like the ravings of a so called financial advisor.
One major reason that I am up there with the big earners in accumulating wealth is because I never gave any to you parasites.
Nope, just an analyst for a well respected financial consulting firm.
Although equity from a house is inflation protected you can't expect real estate values to continue rising above the inflation rate for any extended period of time. When it comes time to retire, how are you going to derive income? If you are planning to sell your house, then you still need a place to live. Additionally a house is not exactly the most liquid asset so if you end up needing cash unexpectedly you could be forced to sell your house for less than its worth. I'm not saying that its not a bad thing to have equity built up in a house, but don't let that equity be what makes or breaks your retirement.
Long term (~100 years) real return (i.e. adjusted for inflation) return on home equity in the US?
0.0%
3 majors spikes
'28-'29 up
'30-'33 down
'01 - ? up
Otherwise, US housing has only kept pace w/ inflation. that is the mean to which this trend will revert.
Fair comment.
I paid $50,000 18 years ago for my current home.
Recent valuation $800,000.and that is conservative.
Average home in the suburb $1 mill.
Free rent for 18 years and tax free.
At or near retirement sell and buy in a less affluent area or country.
Cash left to invest however I wish.
My investment home $95,000 in 2000.
Current valuation $275,000
Average home in the area $350,000.
Trying to keep liquidity in investments in my view is counterproductive.
If I need cash in a hurry it is a simple case of a phone call.$50 transaction fee,repay at current interest rate.
No need to sell.It is called redraw.
It is true that these investments show staggered and sometimes negative returns in a set period.
So do all the others.
Show me one of your portfolios that will show long term growth like these and I,m sold.
42 years old
$800k + equity in our house, but we need it for shelter
~$100k in individual stocks
~$250k in wife's and my 401k's
~$50k in wife's and my IRAs
~$200k in taxable mutual funds
Our kids each have about $50k in 529s and UTMA accounts
Wife has a defined benefit pension, as well.
I'm hoping we'll be OK.
Just turned 33:
Married, one child
57K in various retirement accounts
16k in money market
12 years left on 15 year mortgage for house
Down to one car opayment starting next month
National Gurad pension of at least 2500 per month starting at 59 years 3 months, earlier if I get deployed again.
Choppy Steps wrote:
I'm 39. $250k in 401k. $100k in CDs. $10k in roth iras. $35k in bonds and mutual funds.
Also, I own my house with no mortgage. That's a big factor toward retirement.
How much are you giving to the least of your brothers?
Snatch wrote:
Show me one of your portfolios that will show long term growth like these and I,m sold.
Your return on your residence is 16%pa. On your investment home, 19%. Both excellent.
However, if 18 years ago you expected to get 16-19% return on your properties, you should have bought more. Why not?
Uncertainty. Your are the beneficiary of "survivorship bias". There are other asset classes that have done better in some periods vs others (Gold in the 70's vs the 80's/90s). Real Estate will go through the same cycle.
Right now your primary asset is performing well. The *odds* that it will continue to outperform are exceptionally low.
out on a limb wrote:
42 years old
$800k + equity in our house, but we need it for shelter
~$100k in individual stocks
~$250k in wife's and my 401k's
~$50k in wife's and my IRAs
~$200k in taxable mutual funds
Our kids each have about $50k in 529s and UTMA accounts
Wife has a defined benefit pension, as well.
I'm hoping we'll be OK.
Question regarding how you've dispersed your cash, as I saw another 1 or 2 similar: It seems there's a lot more in your "current" funds relative to the retirement ones (I assume $300,000 total in 401k/IRA and not $600,000, but not sure). Guess what I'm saying is, the $300,000 of stock/mutual funds probably won't grow nearly so well versus a compounding retirement annuity. In 17 years you can retire, but hopefully you'll have another 30 years after that, when you'll be spending more of the $$. Wouldn't you want more invested for that route?? Do you need $300,000 sitting in non-compounding funds? Will you really use/need that? This view changes though if you're retiring very early.
BTW, I'm nearly poor with my current funds, but have $670,000 combined in 401k, IRA, retirement annuities with most of my working career still ahead of me. In a few years, assuming a salary increase, I'd like to dump a minimum of $7K/year in the annuities, while keeping up the 401k, IRA. My goal is to be a (small) multi-millionaire rich some day and to travel in Europe maybe 3 months/year, with a winter home in Phoenix upon retirement. I figure unless I can retire early, working 5/6 days/week keeps me restrained no matter how much cash is in the bank. So I may as well dump it for later when I can do as I please 100% of the time. Also later-life health issues could demand some cash.
Off the Grid wrote:
Long term (~100 years) real return (i.e. adjusted for inflation) return on home equity in the US?
0.0%
3 majors spikes
'28-'29 up
'30-'33 down
'01 - ? up
Otherwise, US housing has only kept pace w/ inflation. that is the mean to which this trend will revert.
You obviously don't live in NYC. Apt bought in 1970 for $70,000, now worth about 4mil. This is not uncommon at all, and if you bought a townhouse you've probably done even better. Plus you can live in it rent free.
If you tried to sell your house in NYC in '75 you would have offered it for $45k-50 and had no bids.
5 years in and down 50% in a city that is bankrupt? That would cause people to lose sleep....
Check the news, CNN reports that the North Koreans set off a test nuke last PM.
Gold may be worth investing in.
Check the news, CNN reports that the North Koreans set off a test nuke last PM.
Gold may be worth investing in.
www.cnn.com/2006/WORLD/asiapcf/10/09/korea.nuclear.test/index.html
Why CD's? Look into muni bonds instead
curious: why does it follow to invest in gold following n korea nuke test?
also: question for snatch and our finanacial advisor: i recently bought a home and have a
30-year mortgage for about 130k that i'd like to pay off as soon as possible. i'm thinking that once that's in the clear i'll have freedom to make career change to something more enjoyable that pays less and/or plow lots of money then into the market.
for now, i'm planning on throwing what i can - $3k or so extra a year - towards the principle on the mortgage, to help pay it off earlier. is that foolish? should i be investing that money
in the market (i'd go the index fund route) instead and compounding my returns from year to year?
thx
Right now I am finishing college. I will have basically 0 in retirement savings at 23, and be in the whole by 5k in student loans.
By the age 30, however, I will have over .5 million between myself and fiancee (wife by then). Retirement goal is $8,000,000 by the age of 55 and that doesn't include savings for kids.
...so I'm the loser on this thread - apparently. I don't know how you young guys do it. I guess it's cause I farted around for 7 years after college - just worked here-and-there, backpacked the States, etc. Right now I've got 27 yrs. of teaching, but only around 64K in my pension, with around 42K in a Legg Mason Value Trust fund, and around 70K in this newer Prudential annuity plan. So in 5-10 years, I'm not confident where I'll be... I just know that after three kids in college (two still in), and after just raising them, I've still got a mortgage - not much other debt - but still a mortgage.
richie poor wrote:
for now, i'm planning on throwing what i can - $3k or so extra a year - towards the principle on the mortgage, to help pay it off earlier. is that foolish? should i be investing that money
in the market (i'd go the index fund route) instead and compounding my returns from year to year?
thx
Many people sleep better at night knowing they own their home free and clear, but there is an opportunity cost to having that piece of mind - you may be able to get a better return on your $3000 by investing it in the stock market or wherever. AFter your mortgage deduction, your effective rate on your mortgage may be something like 5%, why pay off such cheap money now? If you think you can get 8-10% in an index fund maybe invest that 3000 there. If you can borrow at 5% to invest at 10% you can basically print money the only problem is that that 10% in an index fund is not guaranteed - there's plenty of risk, especailly in the short term.