Nothing quite gets people fired up in the personal finance community, like the debate on whether pay off the mortgage early or invest with extra cash. Debt brings out a range of emotions in people, and many find themselves firmly on either the payoff early side or the invest more side. While I have a general dislike for debt, I can see both sides of the argument.
Pop quiz time!
Two little piggies each have $5,000 pre-tax to invest in their IRAs. Piggy A decides to invest the entire $5,000 in a Traditional IRA. Piggy B decides to invest in a Roth. Both piggies are in the 25% tax bracket. After paying $1,000 in taxes on his $5,000, Piggy B only has $4,000 to invest in the Roth. Both piggies invest in the exact same ETF and each of their accounts grow at 8% over 30 years. When they retire, both piggies remain in the 25% tax bracket (for simplicity, assume a flat tax instead of marginal tax brackets).
If they both take all the money out of their accounts, and Piggy A pays the taxes on his Traditional IRA, which piggy is left with more money?
It's only natural I follow up my "Don't Save for Retirement" blog post with a one on how to crush your retirement savings goals. I hope your New Year goals includes a retirement savings goal. Whether you plan to save
America has a retirement savings crisis. Just how bad is it? Here are some daunting figures from an LA Times article: "About 22% of people ages 45 to 59 said they have no retirement savings or pension, according to a recent Federal Reserve study." That's roughly a quarter of the middle-aged population that need to get their act together. Furthermore, "about 61% of private-sector workers had access to a 401(k) plan last year, but only 43% participated."
Happy New Year!
There’s nothing quite like the turn of the calendar to help people get motivated to achieve awesome goals. While it’s fun hearing all the goals people set, it's sad to know many people will give up on those goals quickly. Rather than sit back and laugh at people for falling short, I want to help you reach your goals.
We created a simple ratio and by answering 10 questions you will immediately have visibility into your total cost per mile (CPM). You can use this ratio on your current car or any future car you plan to buy.
There once lived two swine named NinjaPiggy and Trend. They were similar in every way, except the later had a taste for the high-end. This is the tale of the automobiles they bought and how their purchases impacted much more than just their trot. Every five years Trend upgraded his car and traded-in, while NinjaPiggy made each car last for ten.
I narrowed car buying down into two phases. Phase 1 looks at rules for people who are
Here are NinjaPiggy's car buying rules for Phase 2.