Want to be a millionaire? Finance advice inside..

[2WD_NISMO]

Originally Posted by agtitan06

They have expense ratios of 0.10% and 0.09%, respectively. Minimum investment is $10,000 each. .

That's what I figured. Too rich for my blood. I do have a Vanguard 500 with a .15 ratio. The minimum to invest was $3,000.

[agtitan06]

Oh, and here is some food for thought...$2,500 per year...if you think that is not possible to save that much...think again. $2,500 divided by 365 days in a year equates to only $6.85 per day. Just reduce your daily spending by $6.85 per day, and that will equate to $2,500 savings per year. Put that savings in your investment account from age 18-26, and you could easily never contribute any more again and still have $1 million at retirement. Of course, once you're used to saving money every month, you would likely want to continue saving, and then you'll have even more at retirement.

[CT_Nismo]

Everyone should keep in mind that inflation will eat away at the $1 Mil. In 40 years, it will be worth $0.5 Mil. This equates to an endless stream of $2,000 per month in 2008 dollars. Still not bad.

I am going to add to Agititan's fine treatise. To underscore how important it is to start early, if a person wanted to save to $1 Mil but started at age 50, he would have to put in a lump sum of $240k. This is the amount when compounded at 10% yields $1 Mil.

To add more fire to this brimstone; within the next ten years, Congress will get off their duff and fix Social Security. You know what is going to happen. Something will be taken out of your pocket, either in more taxes or lower benefits.

[FitzIngarage]

Great posts! Financial ignorance seems to be the norm; sometimes I think people don't want to know the truth because it might interfere with the joy they find in high living.

It used to be that people's spending was limited by what they earned, but now it's limited by what they can borrow and the amount often seems infinite. We live in a nation that rewards consumerism of big houses, new vehicles, cutting-edge electronics and exotic vacation destinations and it's all made possible by spending more than is earned. The average American household has $9,000 in credit card debt alone. Even the Federal government can't contain itself, having amassed a debt of $9 Trillion. That's $30,000 for each person in the U.S., and the debt and spending grow larger each year because Congress wants to help us with our problems. Go figure.

Live simply, save and don't worry with what the neighbors think.

[agtitan06]

One thing I forgot to mention...don't even bother investing in the stock market if you have credit cards with outstanding balances. You won't find any stock or mutual fund that will yield you the amounts you will pay in interest on your credit cards. You will be far better off paying off credit cards first to get rid of the very high interest charges. Don't get me wrong..credit cards are a great thing...but you have to use them wisely. I've had credit cards since I was 18...I use them as cash..in fact, I rarely have cash on me...I charge everything....BUT I pay everything off as it comes due. I've never paid a dime in finance charges. Credit cards are basically an interest-free 30-day loan...Use it, but pay it off every month or those finance charges will eat away your investment earnings.

[2WD_NISMO]

Originally Posted by agtitan06

. I've never paid a dime in finance charges. Credit cards are basically an interest-free 30-day loan...Use it, but pay it off every month or those finance charges will eat away your investment earnings.

I do that too and link it to a bank account and schedule it for auto pay so the cost is truly zero.

[roc_my_tims]

thanks for the post, I'm 23 i have a roth IRA i invest in, I cant really afford the 4k per year. so i never really used my company 401k ( what i shame i work for a huge company ) i'm going to start it up very soon.

what do you guys think is better a roth ira or more $ in 401 k.

[Pea-Ta]

Good info guys! And thanks much =)

[MateoTheWombat]

Originally Posted by Pea-Ta

Good info guys! And thanks much =)

X2 thanks agtitan, very interesting and motivating read

[agtitan06]

Originally Posted by roc_my_tims

thanks for the post, I'm 23 i have a roth IRA i invest in, I cant really afford the 4k per year. so i never really used my company 401k ( what i shame i work for a huge company ) i'm going to start it up very soon.

what do you guys think is better a roth ira or more $ in 401 k.

For someone under 40 or so, I would rank them like this:

1)Roth 401k
2)Regular 401k
3)Roth IRA
4)Regular IRA