Homer_Rice Posted April 25, 2013 Report Share Posted April 25, 2013 Lessons learned over time as I switched from a career as an executive making good money to a semi-retired frugal guy enjoying life but with a lot less money: 1) Get debt free. Keep a credit card; when you use it, pay it off every month without fail. 2) Emergency fund: readily available cash that allows you to sustain your overhead for at least 6 months (or more if you can build it over time) and to handle cash flow emergencies such as unforeseen car or medical expenses, etc...) 3) Low-interest but safe instruments: Series I bonds are better than CDs nowadays 4) Investment: determine your risk level/tolerance. Do a shit-ton of research. Decide on mutual funds, IRA (as an individual) or 401(k) via employment. Also, Roth has advantages. Also, consider dividend paying stocks as serious part of mix. Other: 1) Accelerate principal payment on house if you own one. Even $100 a month extra will trim years off a mortgage. 2) Pay cash for cars. If you need a great car, then save while you drive a hoopty. 3) Do not day-trade. Repeat (having learned the hard way!) Do Not Day Trade. Link to comment Share on other sites More sharing options...
|Elflocko| Posted April 25, 2013 Report Share Posted April 25, 2013 Lessons learned over time as I switched from a career as an executive making good money to a semi-retired frugal guy enjoying life but with a lot less money: 1) Get debt free. Keep a credit card; when you use it, pay it off every month without fail. 2) Emergency fund: readily available cash that allows you to sustain your overhead for at least 6 months (or more if you can build it over time) and to handle cash flow emergencies such as unforeseen car or medical expenses, etc...) 3) Low-interest but safe instruments: Series I bonds are better than CDs nowadays 4) Investment: determine your risk level/tolerance. Do a shit-ton of research. Decide on mutual funds, IRA (as an individual) or 401(k) via employment. Also, Roth has advantages. Also, consider dividend paying stocks as serious part of mix. Other: 1) Accelerate principal payment on house if you own one. Even $100 a month extra will trim years off a mortgage. 2) Pay cash for cars. If you need a great car, then save while you drive a hoopty. 3) Do not day-trade. Repeat (having learned the hard way!) Do Not Day Trade. I would add that if you can't pay cash for a car, then buy used and\or make sure you can pay it off in 3 years or less and keep it for 10 years.... Link to comment Share on other sites More sharing options...
CincyInDC Posted April 25, 2013 Report Share Posted April 25, 2013 I have student debt that I'm paying off. I only earn money in Germany so I don't have an active US-based 401k and I may not contribute to my Roth IRA. I have an inactive 401k through a former employer plus that Roth IRA, neither of which I have looked at in some time (I really hope there's something left in there). Could I use either or both to pay down (or off ha ha) my student loans without penalty? Link to comment Share on other sites More sharing options...
Homer_Rice Posted April 25, 2013 Report Share Posted April 25, 2013 I would add that if you can't pay cash for a car, then buy used and\or make sure you can pay it off in 3 years or less and keep it for 10 years.... Yes. The longer one keeps a car (payment free) the easier it is to take what would have been a car payment and set it off to the side. Link to comment Share on other sites More sharing options...
Homer_Rice Posted April 25, 2013 Report Share Posted April 25, 2013 I have student debt that I'm paying off. I only earn money in Germany so I don't have an active US-based 401k and I may not contribute to my Roth IRA. I have an inactive 401k through a former employer plus that Roth IRA, neither of which I have looked at in some time (I really hope there's something left in there). Could I use either or both to pay down (or off ha ha) my student loans without penalty? Tough call here. Taking money from retirement accounts before maturity (age 59-60) generally means higher taxes and penalties. Depends on type of account and specific provisions. If you think it's to your advantage to do this, after paying taxes and penalties, then it might not be so bad to take the hit. Personally, I'd only do it if the result substantially cleared off the school loans. You have time to rebuild your retirement funds. It may be best to simply try to accelerate payments on the school loans and to treat the inactive retirement funds as "found money" for when you do retire. Especially the Roth, as you have already paid taxes on it once. Link to comment Share on other sites More sharing options...
Bengals1181 Posted April 25, 2013 Report Share Posted April 25, 2013 Yes. The longer one keeps a car (payment free) the easier it is to take what would have been a car payment and set it off to the side. yea my wife's car will be paid off sometime next year. I'm hoping to put that money straight into the bank to start saving for a new car for me as my car likely only has 1-2 years left. Link to comment Share on other sites More sharing options...
WRAPradio Posted April 25, 2013 Author Report Share Posted April 25, 2013 Good advice from all, thanks! Luckily I have no debt right now, except for my mortgage. I'll do some research on what to invest in, I feel like mutual funds or ETFs are probably the way to go for me since I don't want to do the extensive research and choose individual stocks. Link to comment Share on other sites More sharing options...
Homer_Rice Posted April 25, 2013 Report Share Posted April 25, 2013 Good advice from all, thanks! Luckily I have no debt right now, except for my mortgage. I'll do some research on what to invest in, I feel like mutual funds or ETFs are probably the way to go for me since I don't want to do the extensive research and choose individual stocks. One last thought. If you go the mutual fund/ETF route (which isn't a bad idea) be very careful to select funds which have low admin fees. A high admin fee can cost you many thousands of $$ over the long term. There are a number of good funds out there, it's just a matter of finding one( or a few) whose strategy appeals to you. I'd definitely look at Vanguard funds as part of the process. Link to comment Share on other sites More sharing options...
The PatternMaster Posted April 25, 2013 Report Share Posted April 25, 2013 One last thought. If you go the mutual fund/ETF route (which isn't a bad idea) be very careful to select funds which have low admin fees. A high admin fee can cost you many thousands of $$ over the long term. There are a number of good funds out there, it's just a matter of finding one( or a few) whose strategy appeals to you. I'd definitely look at Vanguard funds as part of the process. Vanguard are some of the best mutual funds available, they have the some of the best managers and low expense ratios. If you want to got the mutual fund route, which I highly encourge, check out http://www.morningstar.com/... This website will get you going in the right direction. I recommend some index funds, funds that basically track the performance return of the major stock indexes like the S&P 500 or Russell 2000. Most money managers try to beat these indexes and routinely do not, plus these funds have relatively low expense ratios. You want a fund with a expense ratio no higher 1.5%. Link to comment Share on other sites More sharing options...
WRAPradio Posted April 26, 2013 Author Report Share Posted April 26, 2013 Vanguard are some of the best mutual funds available, they have the some of the best managers and low expense ratios. If you want to got the mutual fund route, which I highly encourge, check out http://www.morningstar.com/... This website will get you going in the right direction. I recommend some index funds, funds that basically track the performance return of the major stock indexes like the S&P 500 or Russell 2000. Most money managers try to beat these indexes and routinely do not, plus these funds have relatively low expense ratios. You want a fund with a expense ratio no higher 1.5%. Cool, thanks. A few months ago I bought FLVEX b/c it had a low NAV and you no transaction fees on Fidelity. It's been ok so far, but I'll look around to find something else. I need to look at some index funds to see what's out there. Link to comment Share on other sites More sharing options...
-GoBengals- Posted April 30, 2013 Report Share Posted April 30, 2013 I would add that if you can't pay cash for a car, then buy used and\or make sure you can pay it off in 3 years or less and keep it for 10 years.... this is the scheme im trying to get into, just got my wife a car, we can PROBABLY pay it off in 4 years, keep it 10-11, but im going to need a car, which i can probably pay off in 4, so its going to be 7-8 years before i can even think about paying cash for a car, im paying an extra 450-75/mo on the mortgage mOST months, trying to get to $300, which would pay it off 8 years early i think it said.. once i get the back yard done, i will probably do a principle payment of $8k at tax return time each year instead of the monthly extra.. mortgage is the scariest thing fucking ever... Link to comment Share on other sites More sharing options...
|Elflocko| Posted April 30, 2013 Report Share Posted April 30, 2013 this is the scheme im trying to get into, just got my wife a car, we can PROBABLY pay it off in 4 years, keep it 10-11, but im going to need a car, which i can probably pay off in 4, so its going to be 7-8 years before i can even think about paying cash for a car, im paying an extra 450-75/mo on the mortgage mOST months, trying to get to $300, which would pay it off 8 years early i think it said.. once i get the back yard done, i will probably do a principle payment of $8k at tax return time each year instead of the monthly extra.. mortgage is the scariest thing fucking ever... I honestly don't foresee us ever having one again TBH... Link to comment Share on other sites More sharing options...
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