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having a good business card too
Boys, one thing you have to rememba, is that step one to bein wealthy is wearin' clothes that are in proportion to your physique.
having a good business card too
Preferebly, with a watermark.
Or at least that's what I'd want!
I'm proud of the fact I have a decent NW. Both me and my wife have good paying jobs, so that certainly helps. On the other hand, I have three kids and live in NYC, so expenses run high.
Damn it!
PS: I wish my NW was close to my VBookie cash
I disagree. Overall, your 401(k) or IRA will be at a lower tax rate, especially compared to investing the money without the tax deferral. Sure, there are other ways to reduce your taxes, no doubt better if you know what you are doing.Today, workers who save money and invest in a 401(k) plan are the highest taxed people in America. Now, I can hear some of you asking, "Isn't saving money and investing in a 401(k) having your money work for you?"
No -- at least not according to the IRS. A worker's pay is taxed at the highest tax rate possible. So are your savings and income from your 401(k). In most cases, money goes into a 401(k) tax-deferred but comes out as highly taxed ordinary income.
And if I'm wrong, isn't Bush's Social Security "reform" based on IRAs in some form? I thought it was going to be good for us.
It certainly can be, especially if you are planning to retire on a significantly lower income level that you are currently earning (i.e., much lower tax bracket).
But your rate of return and tax benefits are actually higher in other things, like real estate or things that you can actually use to make you money (equipment, computers, education) and then write off/depreciate off your taxes. Ideally, I personally thing that you shouldn't put your eggs in one basket and should do some of both.
I must to explain to yall the nature of dollar cost averaging
No.
But the vIRS called. It seems that you did not declare your winnings as income and you are being audited.
LOL
well with the vPatriot Act they could check my vbank statements
They did!
RG's net worth is somewhere around -$70,000 at the moment. This is almost no assets and about that much in student loans and credit card debt from a year of unemployment.
This figure is projected to become positive in approximately 4 years, and is actually better than some people with 6 figure salaries who spend beyond their means.
The trick is to live well below your means, save and invest. No big secret.
The only way to really make a 100% certain buck on the stock market is to write a book about making money on the stock market.
Best book I have read yet on money. I recommend it highly. executive summary: live beneath your means and save 15% of your income.
I also read "Rich Dad, poor dad" and thought it waaay tooo preachy and outright wrong in a couple places, but I can see how people who like to think themselves better than others would like it.
As for avoiding taxes:
There are lots of ways to do that within the system.
Take for example maximizing your itemized/standard deductions:
(dates given are for instructional purposes)
Pay 2004 property taxes in Jan 05, then pay your 2005 property taxes in Dec 2005. Save up your charitable giving for a few years, and then give it in 2005 as well.
You take your itemized deductions all at once in one year with a little planning, then take the "standard" (read: minimum) in the next year. This maximizes the effect of those deductions.
BUT
Keep your receipts and good records.
Heh, this is the kind of advice that CPAs charge a lot of money for, and is surprisingly simple. shhhhhh.....
Actually, to maximize long term wealth, sometimes renting can make more money in the long term than buying.
If you can rent for a couple of hundred dollars less than buying, and take that money and invest it responsibly, you can end up with more net worth than buying a house with a 30 year mortgage.
The calculation is kind of a complex one, because one really has to consider the full opportunity costs of both options.
Keep in mind that for the first 20 years (approx) of your house payments on a 30 year mortgage you are paying more in interest than principle, and that interest is a "dead" to you in terms of net worth as the rent is.
(begin edit)
RG breaks out his MS excel and whips up an amortization table and finds this to support his thesis:
The first 10 years of a 7% mortgage on $100,000 will see you spending $65,648.68 on interest, and only having paid $14,187.62 on principal.
Theoretically, you do get an income tax deduction on that interest that makes that interest a bit "cheaper". You can also deduct the cost of property taxes from income taxes as well.
BUT
On the flip side, let's say you can find an apartment for $200 dollars cheaper than your house payment+property taxes+insurance+(everything else).
And you invest that $200 per month at 7%, a rather conservative rate.
After 10 years you will have $34616.96, and this is clearly more than the $14,187.62 worth of equity you would have had buying the house at 7%.
Fast forward another 20 years and you will have saved up $243,994.30 with the "rent" option. This is compared to the house buyer who has a house with $100,000 equity.
That said, houses do appreciate. Say 2% per year. The house will then be worth $181,136.16. This is STILL less than the "rent" option.
There are LOTS of things I have left out, bear in mind this is a simplified example. Not everyone is better off renting versus buying, and a house is a very legitimate long-term investment, and something I would recommend for anyone.
All that said: I personally will be renting for the next few years while I pay down some debt. If you have any credit card debt at all, you should pay it off before saving a single cent. This of course requires enough discipline not to buy more on credit.
Credit cards should be used ONLY for short term cash crunches, like your car's transmission exploding or something, and shoudl be paid off ASAP.
Last edited by RandomGuy; 10-15-2005 at 12:31 AM.
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