If your job offers a 401K as a benefit then you definitly want to take advantage of that, especially since many companies match up to a certain % of your investment. That amounts to free money, and being able to start at a young age you'll have the power of compounding to greatly increase your potential balance at retirement. A few tricks I use with mine is everytime I get a raise I increase my investment %, so for example if I get a 4% raise then I will increase my investment by 1-2%. My paycheck will still be bigger but I'm also putting more money away. Another thing I'm doing is I have a high risk-high return portfolio, because I'm young enough that if I end up taking a big hit then I have time to recover, but it will build the balance a lot quicker.
Saving Money
- Thread starter KellyFrancis
- Start date
Great advice. Starting early is one of the most important things you can do...even if you think it's just a small amount it seriously adds up over time.
Bank deposits (Including CDs) are FDIC insured up to $250K. Good info on CDs can be found here: http://www.fdic.gov/deposit/deposits/certificate/index.html
Agreed, since rates are so low, you won't earn much in CDs, but they are what they are...a safe (no risk) way to earn a little interest on cash.
Kelly, if you are really looking to save for retirement and truly don't intend to touch the money for 50 years, you would be better off opening a Roth IRA or Traditional IRA and investing in a target date 2050 fund.
DXDX, I am a HUGE fan of Vanguard since they are the low cost leader, but to say that "there's no cost" is not true. The fund you referenced has a .05% expense ratio, meaning that you pay a fee of .05% per year on the amount that you have invested.
What if they are one and the same? I guess I'm weird in that I actually really enjoy finding ways to save a buck; saving is truly a hobby of mine. I'm always looking for ways to cut expenses, whether it's running more efficient pumps, putting lights on timers, insulating tanks in the winter or finding the best deal on pellets.
....no disrepect intended ....but picture this scenario ...your fifty ... your monthly income is 878.00 your rent is 555.00 .....
Sorry for the mistake... I guess I didn't realize there is a fee. I look at my statements pretty closely and don't recall seeing it.
Are you saying the expense ratio is point zero five percent? That's still next to nothing for their funds, which are excellent.
Lots of good advice here - what Inglorious said above is also spot on!
I know people of both extremes - savers and spenders. You want to find a good balance so you're saving as much as you can, but also enjoying life.
No worries, I hope I didn't come across as crass...not my intention at all.
You won't find a line item on your statement that reflects the expense ratio fee; the fee is deducted from the overall pool of assets invested in the fund...it's a little strange, but it's how all mutual fund companies do it. You can find the expense ratio on the Fund's Prospectus or on the website here: https://personal.vanguard.com/us/funds/snapshot?FundId=0540&FundIntExt=INT#hist=tab:3
But yeah, it is just point zero 5 percent. On a $10,000 investment, you are only paying $5 per year- Best deal in town (as close as you are going to come to free)!
Taken from Vanguard's site, "The expense ratio is a mutual fund's operating expenses expressed as a percentage of average net assets. The expense ratio includes management, administrative, marketing, and distribution fees. It is calculated annually and directly reduces the fund's returns to shareholders."
I agree with finding balance...as with most things, there's usually a happy medium where you can enjoy life while also being fiscally responsible.
no problem, not crass at all....
so, it's essentially taken out of the dividends. I had a vague feeling that was the case, but I never really looked into it since Vanguard is one of those few companies you can trust not to nickel and dime you with fees.
I just wanted to verify the ratio because I did the calculation on a $10,000 investment too and wanted to make sure $5 was right.
so, it's essentially taken out of the dividends. I had a vague feeling that was the case, but I never really looked into it since Vanguard is one of those few companies you can trust not to nickel and dime you with fees.
I just wanted to verify the ratio because I did the calculation on a $10,000 investment too and wanted to make sure $5 was right.
None taken. I hope my response doesn't offend you...
Cutting Expenses
In Phoenix you can rent a 2 bedroom condo for $500. Move into a 2 bed condo with a roommate and you have knocked $305 off of your rent. You have also just divided your utilities (baseline expenses) in half. That should free up some cash for said 50 year old.
Increasing Income
Look for opportunities to increase income or take a second job.
I know we are living in tough times, but people have two choices...
1. Complain about your circumstances.
2. Take action and try to improve your situation.
I apologize if that is crass, but not sure what you want me to tell ya...
All this talk about investing and saving makes me depressed. Life's too short. Burn all the cash you can while you have the health. Cocaine and hookers. Charlie had the right idea. I have too many hobbies that need funds. You guys keep your wallets tighter than a nun's crotch on Christmas.
JK. Don't listen to me. Good advice here. Especially on the mutual funds
p.s. I still remember a teacher in high school telling us about mutual funds and how you could invest $1k a year for 10 years and have like eleventy billion dollars by the time you retire. I'd like to sit down and have a talk with him again. Be like, bet you didn't see that one coming eh?! Now you have to change up your whole curriculum to factor in negative returns and the Great Recession
JK. Don't listen to me. Good advice here. Especially on the mutual funds
p.s. I still remember a teacher in high school telling us about mutual funds and how you could invest $1k a year for 10 years and have like eleventy billion dollars by the time you retire. I'd like to sit down and have a talk with him again. Be like, bet you didn't see that one coming eh?! Now you have to change up your whole curriculum to factor in negative returns and the Great Recession
All this talk about investing and saving makes me depressed. Life's too short. Burn all the cash you can while you have the health. Cocaine and hookers. Charlie had the right idea. I have too many hobbies that need funds. You guys keep your wallets tighter than a nun's crotch on Christmas.
JK. Don't listen to me. Good advice here. Especially on the mutual funds
p.s. I still remember a teacher in high school telling us about mutual funds and how you could invest $1k a year for 10 years and have like eleventy billion dollars by the time you retire. I'd like to sit down and have a talk with him again. Be like, bet you didn't see that one coming eh?! Now you have to change up your whole curriculum to factor in negative returns and the Great Recession
+1
As long as my electric, gas and water are paid, there's food and beer in the fridge, my pets are taking care of and my car has gas I'm golden! anything else is well to complicated.
I get paid hourly, so I live hourly! Simple
Go S. Vettel #1 rb8
