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1. Go get yourself a Will.
2. Get term Life insurance.
3. Get yourself 6 months of expenses in a savings account.
4. Save 15% of your income for retirement.
5. Start investing in mutual funds.
6. Go have some fun(!!!!!!!) and randomly give to charity. Can even be just paying for the person behind you in the drive through. That can actually be a lot of fun.
6. Go have some fun(!!!!!!!) and randomly give to charity. Can even be just paying for the person behind you in the drive through. That can actually be a lot of fun.
7. Become a big tipper. Think 25% as a base, with 30% for good service. That will be bread cast upon the waters that comes roaring back to you in record time. Plus it helps support your local economy.
Don't read anyone exclusively. Dave Ramsey is not some financial magician. His notions of earning a 12% return on stocks-only portfolios are frankly nuts. Young investors are poorly advised to use anything more than 2% as an expected real annual net rate of return. 12% is simply a recipe for disaster.
Don't read anyone exclusively. Dave Ramsey is not some financial magician. His notions of earning a 12% return on stocks-only portfolios are frankly nuts. Young investors are poorly advised to use anything more than 2% as an expected real annual net rate of return. 12% is simply a recipe for disaster.
Over every 30-year period in history even including the Great Depression, the S&P 500 has returned between 8% and 15% annualized, with a median return of 11% annualized. Of course, stock index funds were not available until the mid 70s and probably no one knew about index funds until the 90s.
Those numbers are visions of sugar plums. They do not account for inflation, fees, taxes, or the fact that annualized returns tend to mask the effects of rather regularly losing at least 10% of your principal. Keep in mind as well that when talking about what future rate of return to expect, the past is of no aid or use to you whatsoever. Not one penny of your future earnings will come from the past. In the future, every error of over-optimism is indeed likely to leave you at least thousands of dollars short of your goals when the time comes. Every error of over-pessimism will meanwhile leave you all those thousands of dollars ahead of the game Which would you prefer? Assuming a 2% net real rate of return going forward should be cautious enough to leave you within a safe zone. Every tick beyond that level is simply skating out onto thin ice on a warm and sunny day. The choice is yours however.
Over every 30-year period in history even including the Great Depression, the S&P 500 has returned between 8% and 15% annualized, with a median return of 11% annualized. Of course, stock index funds were not available until the mid 70s and probably no one knew about index funds until the 90s.
When the history of the world is written in 1000 years the period from 1865 to 2000 in America will be regarded as one of the great golden ages in world history. Your expected returns are based off one country during an unprecedented period of prosperity. Expand your sample to include some other historic periods... how about Britain in the 100 years leading up to 1918, or Germany in the 50 years to 1945, or Japan in the 30 years to 2015. Looking through history, you'll find that sustained periods of losses are much more common than 10% returns spanning a period of multiple generations.
Just curious what yall think the smartest move is after completely paying off your mortgage, loans, and credit cards? Is saving $$ for the next market downturn the best option, or maybe buying a 2nd home and renting out the first to pay for the mortgage on the new one? Just curious what some of you savy folks would do. I have a plan to be debt free in less than 3 years from now. Any books to recommend?
If i was in your shoes i would buy income property. Save up a bit of capital for down payments and let the rent checks flow. I believe now is a phenomenal time to be a real estate investor because lending rates are low. Check out the author, Robert Kiyosaki. He is a wealth of knowledge. I recommend starting with his book "Rich Dad, Poor Dad" as i believe it is essential to building your knowledge of this industry. And on top of the all the info packed in between its covers, it is a very well written book that keeps you interested. Good luck!
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