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Without debts save at least 10% but with debts what is the minimum?
Does Automatic investment towards mutual funds, bonds, stocks also count or savings should be limited to interest bearing saving accounts.
There are two kinds of debt:
1. Bad debt and
2. Not so bad debt.
Bad debt= credit cards etc.
Not so bad debt= home mortgage.
As a previous poster commented; by all means if you have credit card debt-pay it off first before anything else and dont charge any amount ever again on the card that you cant pay off at the end of the month. If you can pay cash for a home-great-not many can. A mortgage is not the worst debt you can have. You have to live somewhere and over time a home has been shown to be a good investment. There are ups and downs in real estate but in the long haul you are better off owning. In the next few years there will be a very good buyers market presenting itself.
Now to the savings: Automatic investment counts toward your "pay yourself first" philosophy. Also fully fund any 401 your company offers you. If you save 15% of your gross in a company sponsered 401-you have already met your "pay yourself first" obligation. If you start the 401 in your early years of employment,say 25years old, fund it fully and diversify the investment; there is a good chance you will retire a millionaire.
By the way-this is what worked for me and what I have taught my daughter-your mileage may vary
-Educate yourself on bubbles, manias. Go back a few years and look at all the people that got swept up in the latest real estate bubble. Lots of stories about, "it's different this time", "there's no new supply", "you can't sell a house like a stock or bond", just terrible logic and very dangerous to your finances.
Even big "experts", authors, college professors..alot of people got fooled.
I'd be very careful about getting into deals that rely on where interest rates are going to go, or where some asset (stock, bond, house) is going to be in 6 months. Some people risked alot of things...their down payment, credit score, you have to think about what you're risking.
Read about the internet bubble, stocks that everyone thought were "sure things" went down 95%...very hard to recover after those kinds of declines. If you own something that goes down by 67%, you have to triple your money to break even.
-Penny wise, pound foolish thinking gets people in trouble, I've seen it first hand. Being overly worried about the small things (coupons, freebies, saving a few dollars on something) while not focusing on the bigger picture (debt, mortgage debt like in the example above, making 4% but paying 9%).
This advice thread is turning out better than I thought it would! I consider myself financially sound, but I've learned a lot from you all! Thanks so much for contributing!
no student loans.
military service a must.
go into a vocational program not academic
e.g. nursing RN
dont look at job titles and positions
look at the W-2 that is what you should focus on
buy real estate and do not sell it, pay it off. then buy more.
divorce is 50% nationwide 75% in LA.
20% of people are married after 25 years
dont go there. do not marry without a written contract.
marriage is a legal experience masquerading as a romantic experience.
live in your own place, dont have people move in with you or move in with them.
listen to dave ramsey talk radio host auterity guru.
Last edited by Huckleberry3911948; 12-05-2007 at 12:10 AM..
Reason: typo
Bunky, well no student loans here, but no military service. I also went into education. I guess I'm in trouble already! I like "buy real estate and do not sell it, pay it off. then buy more.
no student loans.
military service a must.
go into a vocational program not academic
e.g. nursing RN
dont look at job titles and positions
look at the W-2 that is what you should focus on
buy real estate and do not sell it, pay it off. then buy more.
divorce is 50% nationwide 75% in LA.
20% of people are married after 25 years
dont go there. do not marry without a written contract.
marriage is a legal experience masquerading as a romantic experience.
live in your own place, dont have people move in with you or move in with them.
listen to dave ramsey talk radio host auterity guru.
Nursing is an academic major for an RN, it's a 4 year degree. Vo-tech is fine for some, academic majors are better for others. You can't make blanket statements like that. Not everyone is cut out to be a plumber.
There is nothing wrong with using credit cards if you use them responsibly. We have a points credit card, balance paid off every month but those points are going to pay for our vacation this summer so we use the card. It's free money for us.
Are you really sure it's free?
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I like "buy real estate and do not sell it, pay it off. then buy more.
