Mid-A. This isn't going to be the typical S2000 thread, nor will it be a have fun and it up thread. I want to talk about retirement plans and ways to increase individual/couple assets for future stability/wealth.

I think there are many people in the Mid-A who are doing more than the average American, but I know there are a bunch of younger members who have not even thought about this stuff yet - we (the younger owners) have the most to benefit from this

I'm sure there is a very high percentage of us who are already putting aside money through a 401K or IRA and there are probably a few of us who will inherit some comfort. For those of us who are putting the highest amount into our retirement accounts (typically $15,000 a year for 401K and $3,000 a year for IRA) can we do more?

First off, there are 4 ways to earn "wealth" (not money) in the United States - or 4 ways to earn the "American Dream":

1. Sue for it
2. Win the Lottery
3. Inherit
4. Build assets by putting aside money in investments for the future

Sue for it: there are 5 lawyers per every case today. If an opportunity to win a big case is presented to you, and you are the type of person to go for the gold, chances are there is another lawyer out there to help the other person declare bankruptcy so that you get very little to nothing - this really isn't an option anymore.

Win the Lottery: do I really need to say what the chances of this are?

Inherit: is someone in your family rich? Are you an only child? Does that person really really like you? Is there a chance that person has enormous debt you don't know about? This isn't the same thing it used to be either - that's why I word inheritance as a "comfort" not "wealth" - sometimes an inheritance is a burden as you have to make good on that person's affairs.

Invest: this covers so many different avenues and is really the only way to build "wealth" in this day and age.

Investments don't mean playing the stock market or putting money into a small business. The investments I'm talking about cover Money Market Accounts, IRA's, and Home Ownership. These are traditionally safe things that over a number of years can yield very high returns. You'll never hear about me promoting a "get rich quick scheme" - I'm no gambler (except for a little Poker ).

In the benefit of not making this post so overwhelmingly long to discourage folks who could benefit from reading things in this thread I am going to step away with a question: What are you doing to build your future wealth?

I'll post some stuff on the "Latte Factor" later which is an old thing we've all probably heard, but it a major eye opener.

P.S. I hope I don't come off sounding like a "you should do this" shrewd, but I regard everyone in the Mid-A as a friend and I would like to be wealthy with my friends so we can all have fun together - it is no fun being the only one.

 

I've been contributing for years plus I have stocks.... putting away for the future is one of the smartest things you can do

We all pretty much know that Social Security probably won't be around when we retire

 

I'm no financial whiz but here are a few of my thoughts.

I definitely don't count on inheriting anything from either my parents or my in-laws. There are 6 kids on my side of the family and 2-3 of my siblings could use it a lot more than I. My parents sent out their inventory and asked who wants what (wife and I asked for the family pictures) and I told them to split any capital items like th house with those 2 or 3 that will need it. The other issue is what will be left after long term care if needed by either or both parents.

My in laws will probably outlast me even though they are 15 years older than me but if, God forbid, something happened to both of them my wife would get a sizable inheritance.

If you have a flexible 401K with matching (even partial) from your employer it is a wise move to max out your contribution. If there is no matching or poor choices of investments in your 401K then you may be able to do better elsewhere even taking into consideration the tax benefits.

When choosing an IRA you also have to take into consideration how those funds are invested be it a straight interest bearing account, money market, mutual or stock fund, or straight stocks.

I have a mix of all of the above as well as liquid accounts to cover at least 12 months of living expenses should the need arise.

One area I am lacking is disability insurance but I can't get my head around the numbers and I am playing the odds I'll be able to work until I croak.

One should never bet on your house as a retirement investment as who knows what the future will bring. That being said I hope mine works out for me although I am old school and hope if I retire it will be in my current dwelling so it won't really pay off for me unless I do a reverse mortgage.

 

Invest in real estate. Before the 90's and the internet revolution, almost every millionaire in the U.S. made their fortune in real estate.

It's a simple supply/demand equation for success. As the population increases so will the demand for land (real estate), and supply remains relatively flat because there not making any more land. This will continue to drive RE prices up.

Don't rely on SS, 401k's, or pension funds. We've all seen what can and will happen there.

 

401K or other investments plans are good way to diversify your portfolio. I agree with "itsallforyou" Real estate is the best investment anyone can make now and in the future.

I've personally invested heavily in real-estate and so far the Return on Investment has been above 100% annually compared to investment plans which average around 8-12%.

 

Poindexter, thank you for starting this thread. This is a very important issue, especially for us young'uns.

Anyway, last year I opened a Roth IRA. I have my money divided between an interest account, money market, international stocks, and a mutual fund. I plan on contributing the max amount every year (so far that is $3000). I have been very fortunate with this so far - in one year my initial investment grew 25%.

The nice thing about a Roth IRA is that you do not have to pay any taxes on the money when you start to take it out. The down side is that you have to pay taxes on the money when you earn it. I like this better than an IRA, though, because with an IRA you can claim the money you put in on your taxes, but you have to pay taxes on the money you pull out when you turn 65 (I believe that is the cutoff age).

I know that I will not get any money from any relatives when they die. There's just no money to go around. So now I am doing my part to provide security for myself in the future.

One last thing - A great way to save money is to not use credit cards!! I understand that this is hard for some people, and it can be a necessity for life for some others. I am amazed at the credit card deals out there that have an initial interest rate of 4.9%, but then jump up to 23% after six months. They only tell you that in the fine print. Credit cards have provided an easy means to bankruptcy for thousands upon thousands of people in the United States. In short, if you don't have the cash to buy something, wait for another couple weeks.

I used to have some resources on Roth IRAs and IRAs, but I don't know where I put the links. If anyone wants some, I'm sure I could dig them up. Let me know.

 

This is my only problem right now!!! I'm still trying to pay off some CC shit I got into

I'll be muchhhhhhhhh happier when I'm done with that, and honestly this is my only source of headache right now...

So yea, Stay away from CCs unlesss you KNOW you can pay them off in the same month!

 

I very rarely pay cash and never debit. I charge everything to cards that give me rebates but pay it off monthly. One of my Citi cards gives 5% back on gas station, grocery and pharmacy purchases and 1% back on everything else. My AAA card does 5% back when you pay at the pump max $40 charge per day eligible for rebate. Heck I charged my wife's Porsche and got the airline miles for it.

If you are willing to ride out some of the plateaus in real estate then it is the best long term investment, and lately short term investment, available.

 

Spend all my money on the S2000?

 

I can understand what may prompt you to say something along those lines. I have several friends who have gotten themselves into credit card debt. However, I have several friends who are financially responsible and still use credit cards as well. My boss, my parents, my brother, myself. We each actually earn money from using our credit cards. I get 1% cash back on all purchases. I've earned over $300 over the course of a year or so just by using my credit card for my normal living expenses and entertainment, and then paying it off at the end of every month.

- Jeremy (jnn4v)