h2o_proof
Thread Closed...As Usual
The problem is that we look for fast money too often and we only focus on "earned income". The average man, who starts working a full time job by age 18 should be able to stack and accumulate interest on close to 400k by age 40. Most companies, even some fast food/retail joints will match on your 401k up to 5%, sometimes more. We spend way too much money because we don't often set long term goals. If you're 18, making 20k a year, funding your 401k at 10% ($2,000) with a full company match ($4,000) plus a 5% rate of return ($200) thats $4,200 a year, plus the $500 to $1500 or so you'll get back in income taxes depending on your status and where you live thats anywhere between $4,700 and $5,700 a year. Not to mention if you're personally saving 20% of your net income each check ($3,000) that brings you to $5,000 to $6,000 a year. Also lets say this is a really aggressive savings plan and your remaining 80% net income ($12,000) all goes towards bills and you're living check to check, pretty much broke, you should be using this opportunity to establish credit. At the very least, you should be eligible for a Capital One Visa that pays out 2% cash back. You should be using this card to pay your monthly bills which would net you about $240 cash back each year. After 5 years, you should have between $26,200 and $31,200 between 401k and personal savings. Of course you have to factor in market fluctuations for your 401k however over a 20 year period of ups and downs a healthy portfolio mix should still balance out at a reasonable rate of return.
Five years pass, you're only fukking 23 years old. You should be close to having A1 credit and be getting offers for higher lines of credit, more cashback and even be accumulating hotel and airfare points to subsidize vacations and whatnot. You should also be getting preferred pricing on vehicles, high end consumer electronics and normal expenditures like gas, insurance, dining, etc. Also, by this time, your salary should increase by at least 15-25%, if not, you're doing something terribly wrong. Also your cash balances in savings create a bigger accumulator for your rates of return. Over the next five years, you reach and surpass 25 years of age, so your credit increases, your insurance premiums go down and you're ready to purchase your first wealth generating asset, typically a home. Just gotta be careful and pay attention to the trends in the market so that you're purchasing undervalued property that has potential for growth. I'd suggest a formula of cheap properties in exclusive/established neighborhoods. You should only purchase if the economy is bad, trust that within this 10 year cycle, you'll experience market ups and downs. The key is to not get overly concerned when the market is down. For example, if you're losing money in your 401k due to the economy, it's probably a good time to make an investment because it's on the cheap and as the market levels out, you'll gain so much equity.
You're now 28 with about $50,000 to $75,000 in total savings, if not more based on increase in salary/savings. You either own a home or are ready to make that purchase based on the market and people should be throwing money at you in the form of credit or low interest rates. You can afford that Benz or whatever because you're getting a 1.999% interest rate so it's practically costing you the same or less than whatever you were previously driving when you factor in 8%-16% interest you were paying and all the times you had to take it to the shop. You're also maturing as a person and you've developed a business acumen and you start to look for other investments. BE CAREFUL. Use this time to research, don't make any impulsive moves, you've still got plenty of time. By 33, you should have about 100k in total savings and NOW you start increase that by 25% each year because you got a pot! Perhaps you're looking to get married, start a family purchase a home, whatever, I say go for it, marriage and kids (if you're on top of your game and find the right mate) is a VERY underrated investment. So many tax breaks, credits, more income tax, etc. Contrary to popular belief, kids aren't that expensive. I mean of course if you got them in high end private schools thats a different story, but on average, the tax credit far exceeds the additional expenditure because you're not SPENDING MORE because of your kids, you're WASTING LESS because of your kids
Of course no plan is perfect, we slip up, things happen, get a chick pregnant or incur unexpected medical bills, lose your job, etc. But overall, that shyt happens anyway, at least you're establishing a foundation. Most people don't accumulate this type of wealth until they are well into their 50's, because they don't take their jobs and their savings seriously until they get into their 30's and have accumulated debt.
Five years pass, you're only fukking 23 years old. You should be close to having A1 credit and be getting offers for higher lines of credit, more cashback and even be accumulating hotel and airfare points to subsidize vacations and whatnot. You should also be getting preferred pricing on vehicles, high end consumer electronics and normal expenditures like gas, insurance, dining, etc. Also, by this time, your salary should increase by at least 15-25%, if not, you're doing something terribly wrong. Also your cash balances in savings create a bigger accumulator for your rates of return. Over the next five years, you reach and surpass 25 years of age, so your credit increases, your insurance premiums go down and you're ready to purchase your first wealth generating asset, typically a home. Just gotta be careful and pay attention to the trends in the market so that you're purchasing undervalued property that has potential for growth. I'd suggest a formula of cheap properties in exclusive/established neighborhoods. You should only purchase if the economy is bad, trust that within this 10 year cycle, you'll experience market ups and downs. The key is to not get overly concerned when the market is down. For example, if you're losing money in your 401k due to the economy, it's probably a good time to make an investment because it's on the cheap and as the market levels out, you'll gain so much equity.
You're now 28 with about $50,000 to $75,000 in total savings, if not more based on increase in salary/savings. You either own a home or are ready to make that purchase based on the market and people should be throwing money at you in the form of credit or low interest rates. You can afford that Benz or whatever because you're getting a 1.999% interest rate so it's practically costing you the same or less than whatever you were previously driving when you factor in 8%-16% interest you were paying and all the times you had to take it to the shop. You're also maturing as a person and you've developed a business acumen and you start to look for other investments. BE CAREFUL. Use this time to research, don't make any impulsive moves, you've still got plenty of time. By 33, you should have about 100k in total savings and NOW you start increase that by 25% each year because you got a pot! Perhaps you're looking to get married, start a family purchase a home, whatever, I say go for it, marriage and kids (if you're on top of your game and find the right mate) is a VERY underrated investment. So many tax breaks, credits, more income tax, etc. Contrary to popular belief, kids aren't that expensive. I mean of course if you got them in high end private schools thats a different story, but on average, the tax credit far exceeds the additional expenditure because you're not SPENDING MORE because of your kids, you're WASTING LESS because of your kids
Of course no plan is perfect, we slip up, things happen, get a chick pregnant or incur unexpected medical bills, lose your job, etc. But overall, that shyt happens anyway, at least you're establishing a foundation. Most people don't accumulate this type of wealth until they are well into their 50's, because they don't take their jobs and their savings seriously until they get into their 30's and have accumulated debt.
Clown
