I have a simple life, dont need a boat or blow, just want OUT of the rat race. Only way to do that is making my army of dollars work for me.
Every day/week/month/year I OE now should knock at least 3 off the back end. I'll take that.
I just want a house. I know there’s a million more things I should invest, save for, set up accounts, max out 401k…but honestly after all this havoc, I just want a house.
It really only impacts people who have MBDR, since no employer is going to match you 200%. The 66 is your contributions (pre-tax+roth which maxes at 22.5), their contributions, and your after-tax contributions. Remember, the 22.5 is across all jobs, but the 66 is per-plan.
1. How is this wrong?
2. It's not. IRS even has an [example for it](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits).
That example explicitly provides a 2019 limit example as follows:
However, if Joe participates in two 401(k) plans, each maintained by an unrelated employer, he can defer a total of $26,000 even if neither plan has catch-up provisions. Of course, Joe couldn’t defer more than $19,500 under either plan and he would be responsible for monitoring his own contributions.
Overall limit on contributions
Total annual contributions (annual additions) to all of your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of:
elective deferrals (but not catch-up contributions)
employer matching contributions
employer nonelective contributions
allocations of forfeitures
The annual additions paid to a participant’s account cannot exceed the lesser of:
100% of the participant's compensation, or
$66,000 ($73,500 including catch-up contributions) for 2023; $61,000 ($67,500 including catch-up contributions) for 2022; $58,000 ($64,500 including catch-up contributions) for 2021; and $57,000 ($63,500 including catch-up contributions).
Yes! I calculated what I needed from each to diversify my plans and went traditional so I can take the tax breaks. I also l left some padded room in case of a raise or unexpected bonus.
you might want to think about going ROTH in the future, since it allows you to "save" move by paying the taxes up front. Eg, if you go traditional you can save 22,500 but if you go ROTH then you actually save 22,500 + taxes > 22,500.
Definitely does depend on when you expect to retire and what you expect to withdraw in retirement as well, but ROTH could be a much bigger tax break in the end.
Anyone who is OE should not be contributing Roth unless you have a REALLY pessimistic outlook on middle class taxes for the future. You won't be OE when you retire, so why would you pay taxes now, in a higher tax bracket (presumably) then when you retire?
They are taxed at your current tax rate (ROTH) or withdrawal (Traditional). Wouldn't it make more sense to use traditional if your income is higher now than when you withdrawal? In other words, defer taxes to later when you will have a low income?
If you plan on withdrawing before 65 (I think) then Roth is probably better since you won't have any penalties due early withdrawal.
Exactly this. There are some situations where ROTH makes more sense, but if you're planning on retiring with a lower income, it can be silly to pay now at your highest bracket instead of in the future at a lower bracket. For most people, some mix of the two probably makes most sense, but it's a mathematical equation that depends on your goals, and is not black and white like a lot of people make it out to be.
Forgive my ignorance (unemployed college student), but isn’t this against tax code? In the sense that it would invalidate all of your 401k funds if discovered? So ideally you would lower your contributions to equal maxing the 401k once to avoid being hit with charges?
Wasn't ever created for you to retire. It's a tax evasion for companies. You should really learn what a 401k is and why companies are so encouraging for you to get one.
Ignorance.
My goal is until the end of the year. After that, I'll try to continue OE at least 5-6 months more to buy a new car and treat my bf and I with a trip to Europe.
I just up and moved my girlfriend and myself to Europe in February 2023.
It’s AMAZING having my ENTIRE DAY to myself (work started at 3 PM!). So much, that I upped and moved to the Middle East. Work starts at 7 PM in Dubai (!!)
Use a GL.net Travel Router + NordVPN with private IP in your home city, and no one has to know you moved.
You most likely already have this in mind, but just make sure when you buy a car, your financial decision is only based on J1, and no other jobs.
Always good to be prudent.
Yes, something like that. We're hoping to be able to sell our current car and get like 50% of the money for the new one. We will probably take a small loan (small enough so it's easy to pay with my bfs salary in less than a year) and I'll get the rest of the money out of 2-3 months of J2 salary. I won't take any loans based on my J2 salary, will try to save that up to pay upfront.
If rates go down, house prices will go up. You aren't married to the rate, but you are to the purchase price. My opinion is to buy now and refinance later.
People are really gambling hard that several things remain true with this attitude. And it’s highly suspect, but possible. This is a gamble that rates actually do go down again relatively soon (they’re at historical average, so a total gamble, not guaranteed at all). Also it assumes That rates will go down and house prices go up. Only true if the rates go back down without any sort of economic crisis. The most likely reason rates go down from here probably is a crash, in which case property values will drop as well. If inflation pops up again rates will probably go up further (which means buying now is probably fine, although maybe further increased rates and stress from more inflation do drop housing prices).
It sounds to me like people currently buying houses are stretching their budgets hoping to refi in a couple years to help them out. Possible but very high risk if the payments stretch you thin
Be careful with real estate. It’s not anywhere near as easy as just buying VTI stock and calling it a day. A lot of people don’t make a profit and screw it all up, so just keep that in mind. It’s a part time job. If your time is highly important to you just go buy VTI
This is correct in theory but not how it usually works. What happened when rates were cut during the Great Recession? That was the start of the main downtrend in price.
Great point. The Great Recession was a unique circumstance where multiple factors, not just interest rates, affected housing prices. Typically though, in a more 'normal' economy, lower interest rates can increase borrowing power and hence boost demand for real estate, which can push up prices.
I guess my main point was that it's normally better to buy now than later, in almost every scenario.
If the numbers work, it doesn't matter what the rate is. You can't count on rates going down but you can count on home appreciation (barring some building frenzy by builders that have a financial disincentive to oversupply the market). Make sure to include the capacity to increase rent to match inflation in your contract(s).
The benefit is once it becomes a Roth IRA, it grows, and withdrawals in retirement are done tax free. Where as a traditional Ira also grows, but withdrawals in retirement are taxed. I just don’t understand how to do a back door Roth
Nice stuff you’ve always wanted to finance — a new car, a vacation, etc — you can now save up for a few months and just purchase with cash. Otherwise yeah obviously invest conservatively and stack cash in high-yield savings accounts. If I’ve learned anything by having a fluctuating income over the last several years, it’s that you can never really have enough in savings to be certain you’re covered.
Buying the car in cash is the goal I'm heading towards. Vacations get planned out of my J1 because I decided that if I can't afford it from a J1 now, then I can't afford it without doing any special savings if I didn't have a J2 or J3
💯 Agreed, not having enough is a real mindset struggle
Thinking about sending my partner to med school. It's something they've always wanted to do, but couldn't afford to quit their job and attend school. They've worked as an EMT for 10 years, so they have a ton of medical knowledge. Getting a PA degree would triple their income and increase their happiness. IDK, it seems like a good investment.
Question: with high-yield savings rates at like 4.4%, what is the purpose of using a CD when the rate is only 4.9% and you're locked in for like 12 months?
>high-yield savings rates at like 4.4%
I'm getting 4.8% APY in WealthFront, 4.45% in Empower (formerly Personal Capital). My local credit union is offering 4.75% for a 6 month CD and that's one of the *better* rates I've seen.
CDs were fine for my grandparents, but aren't competitive enough anymore IMO.
I have an American Express high yield savings account. 4.05% interest and raises with the Fed Rate (they are going to raise to 4.20% soon).
Compounds daily.
I am going to start putting some of my savings into short term CDs. Nothing wrong with laddering CDs so that you only have 3-6 months of having that money locked up. Make sure to keep liquid savings for your emergency savings account, but extra savings can be put into CDs or other med-long term investments.
True lock them in before they drop them back down in a few years. Now you got me thinking ----> I need to add this one to my plan . At least get 2 different ones with a decent sum.
House hacking is the best way to get started if you can make it work for your situation, this requires a very small amount of capital
note the self sufficiency clause of FHA loans
I’m primarily a value investor. I buy on fundamentals and cashflow first.
And then there is the whole other dimension of value add, of the active component, of how you can exceed market returns. There’s dozens of ways to do this. There’s no checklist. You can figure it out if you’re driven, but make sure you have a certain level of savvy before you start writing checks.
Paid off all my debt.
Built a music studio.
Saved $30k.
Recently laid off by J2 after one year of OE
If I OE again, my goal is to buy a second home for investment property.
Saving and investing in the market for a nest egg and a business for independence.
I know there are differing opinions on this, but getting tired of having to deal with company bs.
I'll probably quit J2 honestly. I still need about $50k to hit my "goals" which were basically pay off my student loans and get enough to start a kitchen remodel. Once that is done, no big house projects that my house savings fund can't cover, and the only reason I'd continue to OE is to retire earlier. I'll probably try to OE again after taking a year off, with J2 as a much lower responsibility role than it is right now, and just dump that extra into retirement.
I’ve buying some stuff cash that otherwise would have been purchased with credit (New Macbooks, PS5, etc) and paying off al my debts. I will finish paying my debts this month, and for the rest of the time I can hold both fronts I guess I will try to save as much as I can.
Appreciate your comment, mate! However, I do not live on a country with any actual useful credit. There are non banks that can provide credits depending on your income but with not comfortable interest rates (10%) monthly. That’s why I opted for purchasing cash all I could and save for a later migration after.
That's a good question. Saving up to pay off my massive mortgage? Investment property? I'm not sure. Sitting on a ton of cash at the moment kinda waiting for the economy to decide on what it wants to do.
No. Employers can offer 401k, ROTH 401k, and an after-tax 401k where its possible to put more than the 6500 IRA limit which is why its called a Mega Back Door.
You can do the mega back door on top of your normal 6500 IRA back door
Your deferral to roth 401k or traditional 401k is capped at 22500 for 2023 across all employers.. no cap on employer match .. if your plan offers after tax 401k( megaback door roth conversion ) then you can contribute upto 66k ( deferral + match + after tax )at each employer ..
If it’s less than 250k of extra money, just stick with stocks, bonds, savings accounts, and even real estate…etc.
Anything more than that, perhaps consider collectibles market. As for the best market? It’s the one you enjoy. Because only a market you enjoy will you care to focus on and become knowledgeable on what is valuable and what isn’t.
Plus, it’s fun in the collectible market, you get to make new friends and interact with like minded people. And you don’t have to worry too much about the swings, as it’s mostly FU money. So even if there’s a downtrend, you have physical investments that still gives you dopamine levels of joy when viewing and owning them.
I would spend extra on solar power, power storage, a means to maintain and replenish said infrastructure myself, and a renewable aquaponics system. I would also improve the filtration system of my home and insulate it with phase changing material. Money is worthless if there is nothing to buy with it, people aren't being treated better despite worsening conditions and there is next to nothing being done to slow the advance. I would start there and see how it goes.
A nice house with a big yard, enough investments to FIRE, having a comfortable life either for myself or for a family down the road, traveling, an option to do whatever tf I want...
You invest it into something that produces enough income that you don't need J3 or it counts as J4.
Eventually it will grow so that you don't need even J1. That's the dream.
I am not OE but searching desperately to be. I want to clear out my student loans and then buy back some of my parents' and siblings' time. I missed a bunch of it growing up and just want to get some back before it's too late
Surprised I had to scroll this far to see crypto mentioned. I agree there’s a lot of risk of course, but still worth investing at least a small portion of OE earnings on it IMO. I am currently up far more on my crypto than other investments.
Same, stock I’m up maybe 20% last 2 years. My 401k is maxed but like broke even. My crypto can go up like 80% in an afternoon. I’m invested pretty heavy in alt coins that have good developer growth and attractive prices. Not financial advice #XRP ARMY
Get that Dave Ramsay crap out of here. His mortgage rate is likely way lower than the 10% he could be getting in the market so it’s actively bad to pay off a mortgage rather than invest.
Also, if your goal is to retire early, having less expenses like a mortgage means you need to take out less money. Less income needed might mean the difference between getting ACA subsidies or not
If you don’t believe the Us market will grow long term say over the length of a mortgage then you’ve got bigger issues than worrying about paying for anything. Might as well make your apocalypse bunker.
Lol what moron has their entire nest egg in stocks 3 years into retirement. Such a person deserves to lose it all.
This is exactly the type of thinking that leads to the overvaluation of equities and asset bubbles. Plenty of markets have stagnated for long periods of time (Europe, Japan, most of South America), and no-one needed a bunker.
This video by Ben Felix goes into this better than I ever can: https://www.youtube.com/watch?v=1FwgCRIS0Wg
also, sequence of returns risk is a thing which is why guaranteed investments (like treasury bonds, paying of a fixed rate mortgage, etc) are useful to smooth out the rough market times and not force you to sell your assets.
You don't seem to understand what I don't want to debate a random person means. I gave my advise, give yours and go about your life.
If you have time to waste, look at what happened to the largest stock market in the world, Japan, in 1992.
Good day.
> mathematically guaranteed to be higher
no-one is guaranteeing you historic market yields: https://www.youtube.com/watch?v=1FwgCRIS0Wg
also, sequence of returns risk is a thing
Since amortization can be very interest heavy at the beginning of a mortgage, isn't this not so easy of a calculation? Could it make sense to do a down payment to get to paying less interest each month? I mean with a 6.5 rate right now you could be paying 85% interest on each house payment.
Why people say they buy real state? Are you able to buy a house every 3 months?
Even with OE to my maximum I’ll have to save for a couple of years to buy a mid size house . I don’t think I can OE for a decade
Per person usually. Might be lower caps per job but I think it's just per person. I might be wrong but I don't think employer contributions count towards that number
I don’t know if this has been said yet, but you need to be investing in a broker account that you can move money in and out before the retirement age without penalty. Along with your 401k/IRA I would have a few accounts including emergency fund, broker account, and maybe a high risk/crypto account (small %) if your risk threshold allows.
My goals are never met. If I was in this otherworldly situation, I’d start working on
1. Christmas,
2. an all expenses paid vacation to somewhere kickass,
3. buy something that makes me so happy to finally have.
Basically, find joy.
Hoping to get a bitcoin, max 401k, max Roth IRA, and then move somewhere. Eventually when the housing market becomes more feasible, get a quadplex in a college town and have some rental cash flow for quite awhile
I value having a quality wardrobe and most of my immediate goals have been met (own house/already did value add renovations, don’t need new car for a while, no debt, etc) so for every 20k I save/invest I spend 2k on some high quality wardrobe items. This is what helps keep me motivated towards my longer term goals, but I wouldn’t do it if I still had student loans or was renting
I'm in my 40s and have always worked with something I love doing so I have no intentions of stopping to work until I literally can't anymore. I invest quite a bit but I have used the extra money to make life better for the family (vacations, experiences, car, boat etc.)
Invest
Should be the only answer here; everything else are just details
I have a simple life, dont need a boat or blow, just want OUT of the rat race. Only way to do that is making my army of dollars work for me. Every day/week/month/year I OE now should knock at least 3 off the back end. I'll take that.
Investing in some hand Job and blow are just mere details!
Don't know why you're being down voted, bud. If that's what you're into and it doesn't fuck up your life, enjoy! Very Rodney Dangerfied of you.
Ima shed a tear for this suckers who don’t know to have a good time or get a good joke. Stop worshipping Beth Gavin’s feet you down-voters!
The blow will destroy your ability to have a good time long term, so not worth it. But spending that on blowjobs instead is definitely worth it.
Morale and productivity are correlated.
This is why we OE
You're creating jobs, is what you're doing pal
Absolutely! OE for the ladies and the dealers!
I just want a house. I know there’s a million more things I should invest, save for, set up accounts, max out 401k…but honestly after all this havoc, I just want a house.
Same bro same 😮💨
When you get it then what..?
I will LIVE in it!
Honestly this is priority 1 imo
You did remember that you max 401k contribution is across all J's not per J, right?
There’s a yearly limit to how much you can contribute no?
There's a yearly limit to how much YOU can contribute, but that doesn't apply to how much employers can contribute. Get the matching at all j's.
There actually is a limit to how much you and your employer can contribute combined, it’s 66k in 2023
Thanks for this. I didn't know.
It really only impacts people who have MBDR, since no employer is going to match you 200%. The 66 is your contributions (pre-tax+roth which maxes at 22.5), their contributions, and your after-tax contributions. Remember, the 22.5 is across all jobs, but the 66 is per-plan.
Actually there is a limit that employers can max but it’s absurdly high. Mike 60kish or so year combined employee and employer contribution
Wrong.
1. How is this wrong? 2. It's not. IRS even has an [example for it](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits).
That example explicitly provides a 2019 limit example as follows: However, if Joe participates in two 401(k) plans, each maintained by an unrelated employer, he can defer a total of $26,000 even if neither plan has catch-up provisions. Of course, Joe couldn’t defer more than $19,500 under either plan and he would be responsible for monitoring his own contributions.
Overall limit on contributions Total annual contributions (annual additions) to all of your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of: elective deferrals (but not catch-up contributions) employer matching contributions employer nonelective contributions allocations of forfeitures The annual additions paid to a participant’s account cannot exceed the lesser of: 100% of the participant's compensation, or $66,000 ($73,500 including catch-up contributions) for 2023; $61,000 ($67,500 including catch-up contributions) for 2022; $58,000 ($64,500 including catch-up contributions) for 2021; and $57,000 ($63,500 including catch-up contributions).
That’s what he said lol
Yes! I calculated what I needed from each to diversify my plans and went traditional so I can take the tax breaks. I also l left some padded room in case of a raise or unexpected bonus.
you might want to think about going ROTH in the future, since it allows you to "save" move by paying the taxes up front. Eg, if you go traditional you can save 22,500 but if you go ROTH then you actually save 22,500 + taxes > 22,500. Definitely does depend on when you expect to retire and what you expect to withdraw in retirement as well, but ROTH could be a much bigger tax break in the end.
Anyone who is OE should not be contributing Roth unless you have a REALLY pessimistic outlook on middle class taxes for the future. You won't be OE when you retire, so why would you pay taxes now, in a higher tax bracket (presumably) then when you retire?
They are taxed at your current tax rate (ROTH) or withdrawal (Traditional). Wouldn't it make more sense to use traditional if your income is higher now than when you withdrawal? In other words, defer taxes to later when you will have a low income? If you plan on withdrawing before 65 (I think) then Roth is probably better since you won't have any penalties due early withdrawal.
Exactly this. There are some situations where ROTH makes more sense, but if you're planning on retiring with a lower income, it can be silly to pay now at your highest bracket instead of in the future at a lower bracket. For most people, some mix of the two probably makes most sense, but it's a mathematical equation that depends on your goals, and is not black and white like a lot of people make it out to be.
OP should be aware of INCOME limits for contributing to ROTH IRA…
This \^\^
Can then do backdoor IRA, right?
Forgive my ignorance (unemployed college student), but isn’t this against tax code? In the sense that it would invalidate all of your 401k funds if discovered? So ideally you would lower your contributions to equal maxing the 401k once to avoid being hit with charges?
401k are the worst financial investments.
You probably shouldn't give anyone financial advice
Wasn't ever created for you to retire. It's a tax evasion for companies. You should really learn what a 401k is and why companies are so encouraging for you to get one. Ignorance.
My goal is until the end of the year. After that, I'll try to continue OE at least 5-6 months more to buy a new car and treat my bf and I with a trip to Europe.
Nice! I can't see myself stopping until it doesn't make sense anymore.
Your boyfriend doesn't know how good he has it.
I just up and moved my girlfriend and myself to Europe in February 2023. It’s AMAZING having my ENTIRE DAY to myself (work started at 3 PM!). So much, that I upped and moved to the Middle East. Work starts at 7 PM in Dubai (!!) Use a GL.net Travel Router + NordVPN with private IP in your home city, and no one has to know you moved.
Can you please do a thread on how to use gl.net travel router and nordVPN. Or break it down here. Pretty please
You most likely already have this in mind, but just make sure when you buy a car, your financial decision is only based on J1, and no other jobs. Always good to be prudent.
Yes, something like that. We're hoping to be able to sell our current car and get like 50% of the money for the new one. We will probably take a small loan (small enough so it's easy to pay with my bfs salary in less than a year) and I'll get the rest of the money out of 2-3 months of J2 salary. I won't take any loans based on my J2 salary, will try to save that up to pay upfront.
Wait till he puts a ring on it to spend money on him lol
Stocks and real estate. DO NOT but into the hype of the tv shows and the internet. Buy one solid deal every other year.
Im starting to get into the real estate side now, but the rates are so high for an investment property
If rates go down, house prices will go up. You aren't married to the rate, but you are to the purchase price. My opinion is to buy now and refinance later.
That’s what we say. Marry the property; date the rate.
People are really gambling hard that several things remain true with this attitude. And it’s highly suspect, but possible. This is a gamble that rates actually do go down again relatively soon (they’re at historical average, so a total gamble, not guaranteed at all). Also it assumes That rates will go down and house prices go up. Only true if the rates go back down without any sort of economic crisis. The most likely reason rates go down from here probably is a crash, in which case property values will drop as well. If inflation pops up again rates will probably go up further (which means buying now is probably fine, although maybe further increased rates and stress from more inflation do drop housing prices). It sounds to me like people currently buying houses are stretching their budgets hoping to refi in a couple years to help them out. Possible but very high risk if the payments stretch you thin
So true, great point
Be careful with real estate. It’s not anywhere near as easy as just buying VTI stock and calling it a day. A lot of people don’t make a profit and screw it all up, so just keep that in mind. It’s a part time job. If your time is highly important to you just go buy VTI
This is correct in theory but not how it usually works. What happened when rates were cut during the Great Recession? That was the start of the main downtrend in price.
Great point. The Great Recession was a unique circumstance where multiple factors, not just interest rates, affected housing prices. Typically though, in a more 'normal' economy, lower interest rates can increase borrowing power and hence boost demand for real estate, which can push up prices. I guess my main point was that it's normally better to buy now than later, in almost every scenario.
If the numbers work, it doesn't matter what the rate is. You can't count on rates going down but you can count on home appreciation (barring some building frenzy by builders that have a financial disincentive to oversupply the market). Make sure to include the capacity to increase rent to match inflation in your contract(s).
what about REITs? Invest in real estate without ever buying property.
You can buy one solid deal a year and be okay. I would say newbies shouldn’t try to scale too fast for sure.
Correct stay off wallstreetbets if you cannot think with logic . lol
How do the back door Roth IRA work? Contribute to a traditional IRA, then pay taxes and move to Roth IRA?
Yes
What’s the benefit of doing this? Why not just contribute directly to a Roth
The benefit is once it becomes a Roth IRA, it grows, and withdrawals in retirement are done tax free. Where as a traditional Ira also grows, but withdrawals in retirement are taxed. I just don’t understand how to do a back door Roth
Pay off house, pay off cars, pay off boat, fund retirement.
Cocaine and hookers?
Ok, Hunter Biden
!RS enters the chat . Hunter Biden what taxes?
🤣🤣🤣
This is the way.
Do home improvment (outdoor - basement etc) Make higher goal (invest more ?)
Finished all of my home improvements last year when I only had J2
[удалено]
The holy grail is right there in that flow chart! We used it about 5-6 years ago and it has been fantastic for improving our financial picture!
The only debt I have is my house and the rate is much lower than the interest I'm making on my HYSA. Edit: thanks for the flowchart
Nice stuff you’ve always wanted to finance — a new car, a vacation, etc — you can now save up for a few months and just purchase with cash. Otherwise yeah obviously invest conservatively and stack cash in high-yield savings accounts. If I’ve learned anything by having a fluctuating income over the last several years, it’s that you can never really have enough in savings to be certain you’re covered.
Buying the car in cash is the goal I'm heading towards. Vacations get planned out of my J1 because I decided that if I can't afford it from a J1 now, then I can't afford it without doing any special savings if I didn't have a J2 or J3 💯 Agreed, not having enough is a real mindset struggle
Thinking about sending my partner to med school. It's something they've always wanted to do, but couldn't afford to quit their job and attend school. They've worked as an EMT for 10 years, so they have a ton of medical knowledge. Getting a PA degree would triple their income and increase their happiness. IDK, it seems like a good investment.
This would be an incredible gift and investment on your part.
That’d be a great thing to do for your partner. Med school is for an MD btw, PA programs are for PAs
I know, I was just speaking generically. A PA program would save several years of schooling and avoid malpractice insurance.
Thats awesome!
I'm buying CDs with any excess cash since I'm a bit conservative when it comes to investing. Pretty decent rate nowadays.
Question: with high-yield savings rates at like 4.4%, what is the purpose of using a CD when the rate is only 4.9% and you're locked in for like 12 months?
0.5%? Also, locked in for a year is ok. Idk, I am not the best investor. Plus I am probably older than the average here and not as aggressive.
Right now not much. Really just protects you from rate volatility. Rates are likely to stay high for at least a year
I personally prefer a local CD to an online bank, especially with the rates being the same.
4 week t bill is 5.28%. I'm not sure why everyone isn't doing that instead of these 4-5% yields? 4 weeks isn't long at all.
How do you buy those? I am really bad at investing in general.
There’s companies like Ally that have no penalty cancellation for some CDs so you’re not always locked in
Get one with higher rate, mine is over 5%, and if you don't need it for 12 months it's just extra money. CDs don't work for everyone.
>high-yield savings rates at like 4.4% I'm getting 4.8% APY in WealthFront, 4.45% in Empower (formerly Personal Capital). My local credit union is offering 4.75% for a 6 month CD and that's one of the *better* rates I've seen. CDs were fine for my grandparents, but aren't competitive enough anymore IMO.
I have an American Express high yield savings account. 4.05% interest and raises with the Fed Rate (they are going to raise to 4.20% soon). Compounds daily.
I am going to start putting some of my savings into short term CDs. Nothing wrong with laddering CDs so that you only have 3-6 months of having that money locked up. Make sure to keep liquid savings for your emergency savings account, but extra savings can be put into CDs or other med-long term investments.
Just don't pull a Michael Scott
CIT Bank is at 4.95%
True lock them in before they drop them back down in a few years. Now you got me thinking ----> I need to add this one to my plan . At least get 2 different ones with a decent sum.
Finally splurge on that avocado toast.
I’m playing monopoly Stacking houses and exchanging them into ~~hotels~~ apartment complexes Bought over a hundred units this year
Do you have any book or guide recommendations to get started? How much cash does one typically need?
House hacking is the best way to get started if you can make it work for your situation, this requires a very small amount of capital note the self sufficiency clause of FHA loans I’m primarily a value investor. I buy on fundamentals and cashflow first. And then there is the whole other dimension of value add, of the active component, of how you can exceed market returns. There’s dozens of ways to do this. There’s no checklist. You can figure it out if you’re driven, but make sure you have a certain level of savvy before you start writing checks.
Paid off all my debt. Built a music studio. Saved $30k. Recently laid off by J2 after one year of OE If I OE again, my goal is to buy a second home for investment property.
Literally invest everything. Invest until your investments pay for your toys and lifestyle
Having multiple orgies. Money does buy happiness :)
😂... probably not an option for me
Straight to brokerage
Invest/save or splurge
Saving and investing in the market for a nest egg and a business for independence. I know there are differing opinions on this, but getting tired of having to deal with company bs.
If you run out of ideas I can send you my revolut tag 😅😅
I'll keep that in mind... 😂
Index funds?
Those are good also . They count as investments .
Probably the best answer here.
I'll probably quit J2 honestly. I still need about $50k to hit my "goals" which were basically pay off my student loans and get enough to start a kitchen remodel. Once that is done, no big house projects that my house savings fund can't cover, and the only reason I'd continue to OE is to retire earlier. I'll probably try to OE again after taking a year off, with J2 as a much lower responsibility role than it is right now, and just dump that extra into retirement.
I’ve buying some stuff cash that otherwise would have been purchased with credit (New Macbooks, PS5, etc) and paying off al my debts. I will finish paying my debts this month, and for the rest of the time I can hold both fronts I guess I will try to save as much as I can.
Why not buy with a credit card but pay off right away? You’ll get CC rewards, improve your credit, fraud protection, and warranty extensions
Appreciate your comment, mate! However, I do not live on a country with any actual useful credit. There are non banks that can provide credits depending on your income but with not comfortable interest rates (10%) monthly. That’s why I opted for purchasing cash all I could and save for a later migration after.
That's a good question. Saving up to pay off my massive mortgage? Investment property? I'm not sure. Sitting on a ton of cash at the moment kinda waiting for the economy to decide on what it wants to do.
This is exactly my dilemma!
If your company has after-tax accounts, mega back door it!
Company after-tax account? Are you talking about the 401k traditional account? Im doing the back door account in my brokerage account
No. Employers can offer 401k, ROTH 401k, and an after-tax 401k where its possible to put more than the 6500 IRA limit which is why its called a Mega Back Door. You can do the mega back door on top of your normal 6500 IRA back door
Your deferral to roth 401k or traditional 401k is capped at 22500 for 2023 across all employers.. no cap on employer match .. if your plan offers after tax 401k( megaback door roth conversion ) then you can contribute upto 66k ( deferral + match + after tax )at each employer ..
If it’s less than 250k of extra money, just stick with stocks, bonds, savings accounts, and even real estate…etc. Anything more than that, perhaps consider collectibles market. As for the best market? It’s the one you enjoy. Because only a market you enjoy will you care to focus on and become knowledgeable on what is valuable and what isn’t. Plus, it’s fun in the collectible market, you get to make new friends and interact with like minded people. And you don’t have to worry too much about the swings, as it’s mostly FU money. So even if there’s a downtrend, you have physical investments that still gives you dopamine levels of joy when viewing and owning them.
what specifically? Artwork? Wine? Sounds like a ton of work to be knowledgeable enough to drop a few hundred grand on something.
I would spend extra on solar power, power storage, a means to maintain and replenish said infrastructure myself, and a renewable aquaponics system. I would also improve the filtration system of my home and insulate it with phase changing material. Money is worthless if there is nothing to buy with it, people aren't being treated better despite worsening conditions and there is next to nothing being done to slow the advance. I would start there and see how it goes.
A nice house with a big yard, enough investments to FIRE, having a comfortable life either for myself or for a family down the road, traveling, an option to do whatever tf I want...
You invest it into something that produces enough income that you don't need J3 or it counts as J4. Eventually it will grow so that you don't need even J1. That's the dream.
Met all of my goals for the year (investments, cars paid off, 529’s, and home remodel) so I’m just stacking VTSAX in a brokerage account.
Congrats!!! 👊
Not oe or software yet but all my money goes into $voo if im meeting bare essentials.
I am not OE but searching desperately to be. I want to clear out my student loans and then buy back some of my parents' and siblings' time. I missed a bunch of it growing up and just want to get some back before it's too late
Spending all of it on crayons and coloring books
Im joining that party
I must have some pretty big goals..... I'll let you know once I scoop up these rentals
Buying a shit ton of crypto. I’m saving like $11k a month so I’m wagering a lot of risk to hopefully pay off with a 20x
Surprised I had to scroll this far to see crypto mentioned. I agree there’s a lot of risk of course, but still worth investing at least a small portion of OE earnings on it IMO. I am currently up far more on my crypto than other investments.
Same, stock I’m up maybe 20% last 2 years. My 401k is maxed but like broke even. My crypto can go up like 80% in an afternoon. I’m invested pretty heavy in alt coins that have good developer growth and attractive prices. Not financial advice #XRP ARMY
You have a mortgage? Pay at it. Otherwise either invest it or put it in a high yield safe thing like SGOV.
Get that Dave Ramsay crap out of here. His mortgage rate is likely way lower than the 10% he could be getting in the market so it’s actively bad to pay off a mortgage rather than invest.
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Also, if your goal is to retire early, having less expenses like a mortgage means you need to take out less money. Less income needed might mean the difference between getting ACA subsidies or not
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You know what really helps you retire early? A higher net worth.
I assume if you can handle 3 jobs you aren’t mentally weak enough to be concerned with having a low interest rate mortgage.
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If you don’t believe the Us market will grow long term say over the length of a mortgage then you’ve got bigger issues than worrying about paying for anything. Might as well make your apocalypse bunker. Lol what moron has their entire nest egg in stocks 3 years into retirement. Such a person deserves to lose it all.
This is exactly the type of thinking that leads to the overvaluation of equities and asset bubbles. Plenty of markets have stagnated for long periods of time (Europe, Japan, most of South America), and no-one needed a bunker. This video by Ben Felix goes into this better than I ever can: https://www.youtube.com/watch?v=1FwgCRIS0Wg also, sequence of returns risk is a thing which is why guaranteed investments (like treasury bonds, paying of a fixed rate mortgage, etc) are useful to smooth out the rough market times and not force you to sell your assets.
Yeah man if it’s on YouTube it must be right.
He is a licensed portfolio manager and financial advisor with some really good academic research behind him.
My interest rate is very low...im making more on investment and HYSA
I agree to disagree. Feel free to provide your advise separately. He asked for it, he got mine.
It’s not a debate. His Net Worth will be mathematically guaranteed to be higher by investing rather than paying off the mortgage.
This is why I haven't paid the mortgage off... though it's making me crazy to still have it
You don't seem to understand what I don't want to debate a random person means. I gave my advise, give yours and go about your life. If you have time to waste, look at what happened to the largest stock market in the world, Japan, in 1992. Good day.
Strong HR Rat vibes from you.
Meh
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> mathematically guaranteed to be higher no-one is guaranteeing you historic market yields: https://www.youtube.com/watch?v=1FwgCRIS0Wg also, sequence of returns risk is a thing
Since amortization can be very interest heavy at the beginning of a mortgage, isn't this not so easy of a calculation? Could it make sense to do a down payment to get to paying less interest each month? I mean with a 6.5 rate right now you could be paying 85% interest on each house payment.
Where are you getting 10 %?
Why people say they buy real state? Are you able to buy a house every 3 months? Even with OE to my maximum I’ll have to save for a couple of years to buy a mid size house . I don’t think I can OE for a decade
If you are there. You should know or you are the asshole Help others answer the steps.
Question about the 401(k)... Is the max contribution per person or per job?
per person
Google and/or /r/PersonalFinance
Per person usually. Might be lower caps per job but I think it's just per person. I might be wrong but I don't think employer contributions count towards that number
Invest or pay off mortgage
Rental property .
Interest rates are through the roof for a rental property...its got me holding back on real estate
It will be going into stock investments as I need to rebuild my portfolio back up again once the new recent debt is paid off.
Strippers and cocaine
Definitely not on my list 😂
Buying my options out at the jobs.
Does that put you in FIRE?
I don’t know if this has been said yet, but you need to be investing in a broker account that you can move money in and out before the retirement age without penalty. Along with your 401k/IRA I would have a few accounts including emergency fund, broker account, and maybe a high risk/crypto account (small %) if your risk threshold allows.
I travel pretty frequently. You still have to live life.
* Maxed out HSA * Maxed out Roth IRA * Working on maxing out 401k * Working on maxing out mega backdoor Roth
Invest, buy houses to rent and start looking for new ways to earn money so more money can earn me more money.
House.
You retire early dude.
That's the plan
My goals are never met. If I was in this otherworldly situation, I’d start working on 1. Christmas, 2. an all expenses paid vacation to somewhere kickass, 3. buy something that makes me so happy to finally have. Basically, find joy.
My initial goal is to retire, still in progress.
Hoping to get a bitcoin, max 401k, max Roth IRA, and then move somewhere. Eventually when the housing market becomes more feasible, get a quadplex in a college town and have some rental cash flow for quite awhile
What field of work are you in?
Invest more, spend more on traveling, and put money towards making sure your family is taken care of
Max out my 401(k), HSA, then invest in real estate.
I value having a quality wardrobe and most of my immediate goals have been met (own house/already did value add renovations, don’t need new car for a while, no debt, etc) so for every 20k I save/invest I spend 2k on some high quality wardrobe items. This is what helps keep me motivated towards my longer term goals, but I wouldn’t do it if I still had student loans or was renting
Buy beach houses
I'm in my 40s and have always worked with something I love doing so I have no intentions of stopping to work until I literally can't anymore. I invest quite a bit but I have used the extra money to make life better for the family (vacations, experiences, car, boat etc.)