Thanks! I did try, nothing came up that was totally useful but I'll try again !
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My big bright goal is to buy a house outright. (Though the government makes it hard to do that.)
I've got a couple years before the house I want will be available so until then I am just investing and saving. Hoping to pull together $200,000 in 3 years. (Totally doable though a little ambitious.) I figure that if I have a house, instead of the bank having my house, I will have a lot less to worry about in the future.
I'm also putting money together to start up a good reliable business that will increase my general earnings.
After that is done I'll just put everything into investment, like IRA account, etc. Maybe I'll buy myself something pretty too, like a '79 corvette. :-)
for those who want to understand where the gov't sanctioned retirement account 'fear factor' comes from, here's a new tidbit ...
(snip)"40l(k)/IRA Nationalization Quietly Moves Forward
The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.
They want to "get people to invest their 401k's and IRA's into annuities, or likely into U.S. T-Bonds, which are in the biggest overvalued bubble the world has ever seen.
They are doing this because they will have $2 Trillion Dollars in bonds to sell this year, and foreign buying is drying up. China doesn't want them.... Do you?
Who's behind it? The White House and a powerful network of Congressional activists, and the highly-influential Ford and Rockefeller Foundations.
They are engineering a new regulatory and tax-incentive. The purpose is to herd and ultimately force Americans to convert their 40l(k)s and IRAs into government-directed retirement accounts.
The 40l(k)/IRA de-privatization plan is the brain-child of Teresa Ghilarducci of the Schwartz Center for Economic Policy Analysis " "SCEPA", who is funded by the Rockefeller Foundation.
The extreme tactics used to ram Nationalized Health care down the country's throat are a blueprint for what could be the biggest asset grab in history.
This is exactly what took place in Argentina. Yes, Argentina was once a powerful nation; the 3rd wealthiest nation until the 20th Century. Another reason as to why our government needs to nationalize retirement accounts...
Is reported by the New York Times, "This year, the system will pay out more in benefits than it receives in payroll taxes, this important threshold was not expected to cross until at least 2016, according to the Congressional Budget Office." The trickle of red ink will soon become a flood under the pressure of 78 million retiring Baby Boomers....
Less money going into the system! Who will you need to Trust in the Handling of your money?
The March 9 edition of Business Week notes that new federal regulations designed to "promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams" would help drive cash into government-controlled entities such as American International Group (AIG), which was bailed out to the tune of $182.3 billion.
You Do Trust AIG.. right? The Real Question Is.. Is there a safe haven for retirement accounts?
from
Before anybody goes off the deep end, the source for this tidbit is admittedly 'far from objective'. However, that does not subtract from the factuality of their excerpts. There have already been 'discussions' about creating (dis)incentives that would pressure IRA / 401k account holders to shift their retirement assets into US Treasury bonds and/or other gov't approved annuities. The new round of 'public comment' simply attempts to resurrect the issue.
The premise behind these 'discussions' is that 'Joe Sixpack' isn't smart enough to avoid experiencing major IRA / 401k market value losses during market downturns ... supposedly increasing the 'burden' placed on the Social Security system. Thus the premise goes that 'Joe Sixpack' must be protected from his own greed / bad judgement in regard to his retirement savings by the gov't 'forcing' Joe's retirement assets to be placed in 'secure' investment vehicles ... like US Treasury bonds and/or guaranteed payout annuity contracts through AIG. Of course, both of these pay extremely low rates of interest, arguably resulting in IRA / 401k account holders involuntarily subsidizing US gov't debt !
And this latest resurrection of the US Treasury bond / guaranteed annuity contract issue is just one aspect of a much larger principle ... that when you choose to put money into an IRA / 401k account you begin playing a 'game'. Much like 'Jumanji' it's a 'game' where you are effectively locked in until the bitter end i.e. you reach official retirement age ( enforced via early withdrawl penalties / high lump sum distribution taxes etc. ) whereas the gov't is free to change the rules of the 'game' in its own favor at any time !!!
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I don't. I'm hopeless with money. I do budget for pet care and other necessities, but if I have a spare dollar, I'll spend it. Sometimes I reason that at least I'm good for the economy, in a Keynesian kind of a way ;P.
LOL ! Well, at least you are actually earning the money you are spending, as opposed to borrowing it !Quote:
Sometimes I reason that at least I'm good for the economy, in a Keynesian kind of a way
if establishing trusts is saving money, then that's what mine goes for these days.
-down payment for a house
-eventually, mortgage payments and the rest of it, too
-remainder of student loans, which should not be more than $20,000 total
-early retirement? nervous about the whole IRA-uncertainty thing. I want to max out my Roth deposits this year but I don't even know WHEN I will find out whether or not the coast is clear
^^^ Roth IRA accounts, while still potentially subject to future gov't rule changes, would appear to be far less at risk for 'surprises' than SEP IRA's, 401k's, conventional IRA's etc. The reason of course is that the money contributed to a Roth IRA will already be taxed in the year it is contributed ... such that only the dividend / interest / cap gain earnings on money contributed to Roth IRA accounts receives gov't sanctioned tax preferred treatment. Thus from a logical standpoint, the gov'ts 'right' to dictate conditions on Roth account moneys should be limited to the dividend / interest / cap gain earnings portion. This is a different story than SEP, 401k, conventional IRA etc. moneys where both the contributed money and the dividend / interest / cap gain money have received gov't santioned tax preferred treatment.
Also, in regard to your desire to save up for and purchase a home, there are similar gov't 'rule changes' on the horizon as well. From
(snip)"Abolishing the mortgage-interest deduction, enjoyed by some 75 million homeowners, is a way to “end the subsidization of too much debt,” which was at the crux of the financial meltdown, a Cato Institute official told CNBC Friday. (snip)
(snip)"Congress is considering eliminating the deduction as a way to raise revenue and close the budget gap. This move would add an estimated $120 billion to the Treasury coffers.
“I’m not in favor of it to raise taxes,” added Calabria. “You need it to get rid of it in a budget-neutral way. You could use it to offset marginal taxes on income.”
Calabria conceded the deduction could be kept in place for those who have, for instance, at least 30 percent of equity in their homes, but not those who have less."(snip)
Thus, much like entering into a 30+ year 'game' with gov't sanctioned retirement accounts, these days buying a home also constitutes entering into a 30 year 'game' where the gov't could also change the 'rules' after the 'game' has already started. In this case, for middle class earnings level home buyers, abolishment of the home mortgage interest tax deduction could effectively make monthly mortgage payments far more expensive in net dollar terms ... and especially so during the early years of the mortgage where interest payments exceed principal repayments. Put another way, the gov't abolishing the home mortgage interest tax deduction would not directly increase your monthly mortgage payment, but it would directly decrease the amount of after-tax dollars you have remaining to make the mortgage payment with !!! The gov't abolishing the home mortgage interest tax deduction would also result in more potential home buyers failing to qualify for new mortgages, and as a result fewer homes being sold, and as a second result even lower real estate market prices / valuations.
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I think it's just wise to save money when you have it, whether it be for a particular goal or not...this is the key to saving money!
Case-in-point:
I was attending college earlier this year, and received a decent amount of student loan money along with income tax refund. So I saved as much of it as I could for no "reason" really, just to have it. Good thing I did, I got sick and had to withdraw from college, then got laid off from my job. The money I "saved" is what I have been getting by on for the past three months to pay my rent! My point, you just never know...
My personal opinion, if one cannot be disciplined with money, other things in their life will be messed up.
Before I lost my job:
Paying bills and paying off debts.
Saving for a rainy day.
Saving for a condo.
As it turned out I lost my job before I could pay off my debts, which sucked. When I get another job these are my goals:
Paying off my car.
Paying off my credit cards.
Paying my student loans.
Paying off relatives who helped me.
Saving to buy the house I wanted and almost had when I lost my job.
Saving for a rainy day.
And if things go well 2-3 years:
Saving for a nice wedding and money to have a family.
I second what someone else asked- you always give such great money advice- what do you do with your money/savings? I only started dancing a little while ago, but just bought my new car (nothing fancy, but still brand new), still have to pay off student loans, trying to save for an apartment/condo, and was considering investing-but I know NOTHING of that. I just bought "personal finances for dummies" but its like 700 pages, and haven't gotten too far with that, not to mention I'm not 100% sure what I'm reading. One thing I DO know- is that when someone says that education doesn't matter as much as financial independence/intelligence, is totally true..I just need to learn HOW to become financially smart :-\
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How did you do that?
well, I attacked things in priority order based on the assumption that anything that costs you extra money is a 'negative' investment of your current income.Quote:
I only started dancing a little while ago, but just bought my new car (nothing fancy, but still brand new), still have to pay off student loans, trying to save for an apartment/condo, and was considering investing-but I know NOTHING of that
The worst 'negative' investments are those which require YOU to PAY OUT the highest rates to some lender. So the first things that I did after I got divorced and started full time dancing was to ...
- pay down my old bills and credit cards to zero as fast as I could
- pay down my auto loan to zero as fast as I could
- pay down my student loans as fast as I could
... especially in today's economic environment where the interest rates that banks will pay to YOU for depositing your savings are near zero, the best 'investment' use of any extra earnings you have available is to pay down your existing debt !!!
And it still amazes me that most people don't realize how much extra money they wind up spending when they purchase things with credit as opposed to cash. In the case of credit card purchases, the additional 'cost' is obvious because monthly interest charges are listed on the bill. But with car loans or other consumer loan purchases, the true additional cost is often embedded in the transaction rather than listed as a true interest rate.
In other words, buying a new car with a near zero percent vendor financed auto loan may look like a good deal, but in point of fact if you had negotiated the purchase with a wad of cash in your purse the sale price would probably have been at least $1000 lower ! In order to 'earn' this much investment income by other means, you would actually need to earn $1150 or $1200 from a taxable investment in order to have $1000 'left over'.
So yeah, and especially so in today's stagnant economy, the best risk free 'investment' available is to pay off existing debts !
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Only thing left is student loans - walking into that dealership and smacking down cash demanding my car was pretty damn awesome lol :D
I want to start investing (but not high risk stocks) ..I"m guessing with the economy that doing an IRA isn't a good idea? Thanks for your help :)