it is the only proven sure bet in the United States and there are so many incentives/reasons to own. Landlords get rich while renters get poor.

I'm currently in the process of buying my first home, adn what a nightmare that is - but I can't wait to start moving.......whenever that may be

I said that I was going to bring the Latte Factor into this thread, and here it is. I hope this is an eye opener for the younger folks here.

The basic concept of the Latte Factor is based on the idea that there is something in your life you buy all the time, but really can live without - hence Lattes.

Anyway, if you buy a grande mocha or something at Starbucks every morning and then buy a candy bar or donut/bagel/muffin to hold you over till lunch you are probably spending well over $5 a day on stuff that aren't survival needs (I can't live without my coffee ).

If you took that $5 a day and put it into an interest earning account you'll amass a substantial amount of money over the years. People talk about this all the time, but let's look at what this means in terms of $$$'s.

At the age of 27 you start putting $3,000 ($8.21 a day or @250 a month) a year into an account that is earning 10% (for an easy number to calculate) interest for you each year.

Age 27 $3,300
Age 28 $6,930
Age 29 $10,923
Age 30 $15,315
Age 35 $44,812
Age 40 $92,317
Age 50 $292,041
Age 60 $810,073
Age 65 $1,324,777

If you start at 19 with $3,000 a year you'll have $1,552,739 by the time you are 65! This is also assuming that you keep putting in only $3,000 a year.

This is just the Latte Factor. Coupled with a 401K and home ownership(s) you will be really ready to enjoy retirement. The more you do and the sooner you do means the earlier the retirement

Next is buying that first house to help get to the investment houses/property.

 

I just started my 401k January of this year (i'm 24). I should have a little over $12,000 in it by the end of the year from just my contributions. My employer profit sharing from the last year was a little over 10,000. By the end of the year I should be looking at hopefully between 22-23,000 in the 401k assuming no gains or losses. Then my employer matches like 25% on the first 8% which is another 1500.

BTW, no one has said anything but you mentioned you were putting 15k in your 401k. I thought the cap was 14k...

Anyhoo, I am a firm believer in the latte factor. I have been stashing 3k a year in my ROTH IRA since I first started working at 16, minus my freshman year of college when I didn't have a job.

 

You're right about the cap, but it varies by your age. I think my cap is $15,000 @ 26 years old and will go up to $16,000 at 27, but I might be backwards - it may be 14K now and 15K next year.

I'm sorry, between trying to buy my first house and the that has been going on at work plus the latest drama that comes with being a moderator on S2Ki I am about stressed out to my max. I'm definitely not thinking clearly right this minute.

 

[QUOTE=Poindexter,May 26 2005, 08:50 PM]You're right about the cap, but it varies by your age.

 

i hear you about the house. I just bought my first house last fall. it passes and then you will love be a home owner. even though it is more work, it yours and that feels good.

as for the moderating, you know we just opened the doors over at s2kcarolinas.com.....j/k i know one mod job is more than enough

congrats on the new house!

 

Jeremy -

My point was a general one. I know that there are those who can use credit cards responsibly. They are a large convenience in our lives. I never pay for gas or groceries with cash. The main problem with credit cards is when they are used irresponsibility. They are a major cause of debt in America.

I am very glad that you are one of the responsible credit card users. All the wonderful credit card incentives can save boatloads over the long run

 

My Account Manager always said: "When you turn 27 you'll be able to put this much in...." maybe she got away with that because my birthday is early in the year?

You weren't the cause of any drama for me on S2Ki. The last time I remember getting stressed over a Mid-A thing was over a year ago

 

Moderating Street Encounters Wait until Apple vs microsoft gets bad.

Something I do about half the time is buy a used car rather than new and let someone else take the 1st year depreciation. I do keep my vehicles if they are'nt totaled for over 10 years so even when buying new it really doesnt make that much difference.

 

Excellent thread...I am on the other end of the spectrum, by a little bit anyway. I have to agree about the credit card debt - if you are carrying alot, it eats up any benefit you gain from investing. Also, you absolutely need to diversify your investments as soon as you can. Never put all your money in one place, whether it's real estate, the stock market, or whatever. The sooner you start your retirement plan, the better! Good luck, everyone.

 

Great point Deb. I re-read my original post and it sounds like I was saying to dump everything and invest in real estate. While I firmly believe that real estate is the safest route (the least risk & best return opportunities), you should never put all your eggs in one basket.