miracle of ci wrote:
For example, investing $10,000 for 30 years with 10% return vs 8%
$100,626.57 vs $174,494.02.
Except 10% returns are a fantasy outside of maybe last year.
miracle of ci wrote:
If someone has loans with a interest rate of 3% one could invest the extra principal each year in something like a no load very low annual cost balanced fund
There's no universe, in 2017, where this actually works.
Good Ol Days wrote:
I am 23 years old and started working with a company about a year and a half ago making $30K, plus commission (Which was only $3K my first calendar year).
My employer matches 1/2 percent up to 6% of what I contribute. For the last year and a half I have been contributing 15% of my salary because I wasn't married, not many bills and live in a smaller city. Now I am getting married and will have more expenses (getting on my own insurance plan - through the company, wife has student loans, etc.)
My question is should I lower my contribution to 10%, 6%? I know it is better to contribute while you're young, but I really don't make that much and I feel like I am making myself suffer almost for no reason. FYI, my wife is self employed and makes about $22K per year, no benefits. Her income will help, but will not be a big provider for us.
The 401K now has $8K, with a yield of 16.8% since May of 2016. I think that yield is above market average, but is that really all that good? Should I pay more attention to the fund I am investing in through Fidelity?
Any financial gurus want to offer any advice for someone looking to invest smarter, save for the future, but enjoy life at the same time? Obviously there is no better place to get this information than from Letsrun.com ;)
Never drop below what will earn the company match. Sometimes you might have to hold or drop, but never give any of the company's contributions back.
You have to play the long game. Honestly, you are likely doing what you can, but I hope you can eventually upgrade your jobs. 16.8% is great.
Put it away now. It'll get harder later.
Find a higher paying job. Sounds like you deserve one.
I would recommend lowering your contribution to 6% so you can still get the full employer match. I would start a Roth IRA with whatever remaining amount left that you feel comfortable investing, up to the $5500 annual allowable maximum. You can start a ROTH IRA easily through Fidelity. A Roth IRA will allow you to save for the future while also giving you greater flexibility if you ever need the money before retirement since you can withdraw all contributions tax-free.
1. How do you live on 30k?
2. I've never seen a company 401k have 16%+ returns year after year. What are you investing in?
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