There were two ridiculous instances when I purchased my home: 1. I was charged $45 to confirm my employment status and 2. We almost did not close because the dishwasher from previous owner did not pass inspection Not only do you have to check your wallet/bank account when buying a house, you also need to check your sanity😮
‘Your windows need to be replaced to double-glazing, EU energy standard’. That was the statement that made me sell instead of renting through local government.
I bought a house in Finland and there were no hidden costs. The number on the price tag is what we paid! It's a very simple system compared with the US or UK.
Bought our house in Australia. The costs associated to buy our home? $90,000. Taxes, legal fees, other fees. That's with a 60% deposit on the mortgage. Insane! I laughed at the $12,000 fees here.
About 7 months ago I had a major life change and essentially had to start life over in every way possible. Your channel has been so instrumental on the financial side of things and I really appreciate it. I don't have a large income (relatively speaking) at the moment, but I'm investing and saving and debt free and can pay for all of my needs so I'm pretty content for now. Your channel has helped me orient myself to get there. Just mentioning this to say thank you!
Ramith I can’t wait to come to your book tour in Chicago! Got my tickets and I’m so excited to be in a room full of like minded individuals! Your teachings on finances and budgeting has been the only one that has stuck with me long term. My finances have done a complete 180 and I’m super excited about what I can accomplish if I stay on track! See you in chi town 😊
@ nope! If there are tickets left go! Most of his online content does seem to be geared towards couples. I guest that is the demographics he is advertising to but everything in his book applies to anyone in any financial situation or relationships status!
I appreciate your point that we don’t all have to agree on money. Personally, I think buying a brand new car is one of the biggest wastes of money available to a consumer.
Glad to hear we agree on the car thing. I like to buy last year’s model in January. It’s still a new car, maybe a few hundred miles from test driving, but the dealer will give you discounts on it. Then I drive the car for 15 while saving money for the next one.
@@mykidsaresupercute that’s how I roll as well. I buy Certified Preowned Vehicles instead of new. My current vehicle is 8 years old and still works like a charm.
Yeah, I'm at the point where I don't ever want to work on my own car again, nor pay someone else to do it. I've been driving beaters for most of my life and the amount of time and energy spent stressing when there's a break is not worth the amount of money saved on the initial purchase.
Calling people out for "needing their money trapped" is literally so accurate. This is why CPP and Social Security are so important. People criticize these programs, but trust me we'd have seniors in abject poverty without them. In a few decades these kids watching TikTok finance gurus will put everything on "red" at age 50 and end up with zero savings and ZERO income. On their face because they didn't prepare and want to get rich quick.
Yup, I'm in Europe so thank god for penions. But I know a bunch of people who seem able to afford way more then I do with similar income levels. (I do not want to be them when an significant unexpected bill pops up).
3:20 my wife and are in the middle of moving house, have settled the new place and are about to settle on our old house. On the advice of our accountant (prompted from a question by us after watching your videos), we have an extra $65k for these kind of phantom costs. We also have a list of things we want to do to the new house. After we're done, whatever is left over will go back into the house
I learned about the house down payment + closing cost issues while I was looking for a house to buy. Be ready for an extra down payment (just in case) if the loan doesn't cover the full appraiser purchase value of the house you want. Always have a buffer of cash. Buy only what you can afford.
Also, you only get taxed on the amount you withdraw that year, not the total amount in your 401k. If you only withdraw $100k, you only get taxed on $100k. The withdrawal is counted as income; if you have less expenses as a retiree (paid off house, kids already out of college, less mouths to feed, etc.) you might withdraw less 'income' from retirement than your earned income from a job a decade previous. Lots of variables to consider.
@@darbymori350 true, but someone will pay income tax on it. They're not very good means of estate planning, because the person who receives it often is in a higher tax bracket. Better to leave Roth or regular taxable investments because your heirs get stepped up basis.
At a party a year ago a friend told me their goal was 2 million dollars of mortgage debt. When I reacted with shock they asked how I invested money then. "Index funds, bonds, anything else?"
Your friend sounds like one of the many lost disciples of Robert Kiyosaki lmao Hell bent on borrowing money to buy assets, then leverage that asset to buy another one, so on and so forth until you’re leveraged 10-1 but fuck it if you die it’s someone else’s problem, if you declare bankruptcy it’s the banks problem, and you don’t pay tax on borrowed money (but you’ll sure as hell pay interest)
I usually buy a car 2 to 3 years old and purchase the extended warranty usually covering 100k miles bumper-to-bumper. It still ends up cheaper than buying new and you still have a fairly new car.
I'm saving up $200k in cash before I buy my first condo. That'll cover my down payment, closing costs, earnest money, and 12 month emergency fund. Currently at $160k, should be there by the end of 2025.
Regarding the first video, I’ve worked in banking and mortgage lending and the “phantom costs” as you may put it are what people don’t factor in with the whole own vs rent debate. If you’re going to own a home the ever persistent and rising costs of insurance, property taxes, legal fees, financing fees and sheer upkeep and maintenance are ASTRONOMICAL when totalled up over decades and decades. I have seen way too many people consistently refinance, go into more debt, and eat away at the equity that they have in their real estate due to the fact they cannot afford to keep up with the cost of owning the home itself or they’re going into high interest consumer debt to keep it afloat…..which they eventually roll into their mortgage and re-amortize. Sad, but true.
0:30 As someone from the UK we genuinely have non of these extra fees. Obviously a Surveyor and Lawyer but that's not even a thousand for each for a first time house buyer. The other bank fees are normally waved and even then they are not high. Even if you didn't try to save the fees in total would be about 5 times lower than quoted in that first video. That's including lawyers and a Surveyor. It shows how unfortunately Americans pay for stuff nobody else does and how they just take it at face value as the price for doing business, when it's not.
capitalistic nature of america. wall street gold mine has taken over businesses these days. it has done significantly more harm than good in the last 15 years. every company is inventing new ways to get money from people.
Better than a variable rate mortgage. Because of that, people in all the other former british colonies are suffering like hell and going bankrupt. A fixed rate mortgage with consistent payments until the end of the term is more than enough to deal with the other hassles. Seeing your mortgage payment go from what you expect as 2K, and having it jump to 4K the next year because interest rates raised 3% is a bitch.
Renting might be sensible advice for the US, but it doesn’t necessarily apply to the UK. In the UK, tenants have minimal protections-no-fault evictions are common, and many landlords fail to maintain their properties adequately. Essential repairs, including heating during winter, can often take weeks to complete. So while renting might make sense in places like New York, it may not be as practical in other contexts. I wish Ramit made that caveat explicit.
Well, considering all of his videos are intended for people living in the US and not the UK (probably 90% of his audience is in the US), I don't really see why he needs to. I also don't see why he would need to learn UK real estate laws either.
Since this is a very US-centric podcast, the caveat for a UK audience makes no sense, considering who his target audience is. Personally, I ran the numbers when I bought my flat in the Seattle area, it was cheaper to own, even with the phantom costs. When I bought in early 2021, I was saving $500/month over renting. That difference has grown to $1,000 per month, due to the market for flats being soft back then and interest on a 30 year fixed rate mortgage being less than 3%. If I was thinking about buying now, there’s no way that I would do it, since buying when considering repairs, maintenance, etc. along with PITI would be more expensive than renting. He’s never been against buying…he’s against blindly following the societal norm of “having” to buy a house in order to be an adult. He has said in other videos simply to run the numbers in order to see if renting or buying makes sense. He’s never been anti-home ownership; he’s been pro-EDUCATED home ownership.
10 years ago I rented an 700 sq foot apartment for $3200 in NYC and I could see the street through a crack in the wall. We asked the landlord to fix it and he basically stuffed it with that puffy yellow stuff that doesn't do anything to insulate. Landlords don't maintain stuff here either and NYC has some of the best renter rights in the country. Would still be a better deal than buying there though. NYC is out of control
His main point isn't not to buy, it's to actually do the math and make sure you're making a good choice. So it would still work in the UK you would just have different variables to include when doing the math to see if you want to rent or buy.
@@rebeltheharem7028 I’m not sure about the exact makeup of his audience, but he frequently appears in interviews with UK-based RUclipsrs, who primarily have a UK audience (that's how I discovered him). His book has a special edition for the UK and I think is a bestseller here. While he may not need to single out the UK specifically, it would be reasonable for him to include a caveat that his "rent, don’t buy" rule is advice tailored to the US and may not necessarily apply in other countries.
for my vehicle, I buy a new car and hold it for 10+ years. I'm 35 and I'm on my second car and 5 years in. My vehicle just needs to get me from point A to Point B safely and reliably.
@@donaldlyons17sure, but a 3-5 year old car isn't really "new" but most can last 10 years from that point. my Camry is 17 years old and runs great. most cars made in the past few years will easily last over a decade with basic maintenance (unless you have a BMW or something).
We got nailed with a 6k TAX STAMP nobody told us about when we bought our first home. My wife was so upset becasue she couldntd get hold of me because i was at a concert and coudlnt get a hold of me to tell me. thankfully at the time my parents were able to loan us that so we closed on the house and paid them back over the years.
I made the "mistake" of buying a brand new car in 2015. 43k it cost me, financed it over 4 years at 2%. But when I bought it I bought it with the intention to run it into the ground. I made sure it was a car that was going to grow with me (bought an SUV at 23). Now I'm 32 and it's still going. 290000 kilometers on it and I'm going to keep using it until it dies. So my not super well thought out plan at 23 actually didn't turn out to be too bad.
About the 401k. I have been blessed to max out my 401k every year. So now, after 27 years, I have a decent amount for retirement and hopefully in 10 years I will be in a great position.
true but theres a difference. some people can get roth 401ks and don't get taxed later, the default is traditional which isn't taxed now but is later. i'm sure you know but just spreading the info
@@litapd311 Traditional IRA is what I think you're referring to. Roth IRAs and Roth 401k receive post tax contributions and pay no taxes at distribution/withdrawal. Traditional IRAs receive pre-tax contributions and then pay tax at withdrawal.
Indian here, i bought my first apartment at 25 and repaid the loan by 32. It has since 3.5x in value. No debt so all my earnings go to my expenses and savings. I bought my car in 2010 and still use it cos i dont see a point in spending on an another car cos traffic has become horrible and post covid i work from home most of the time. And when i have to go out i take a cab or take the train. I rarely use my car in the last 2-3 years. And i have no interest in buying a car to show others that i have a new car. But i do spend some money on motorcycles cos thats my passion. Own house, some money in the bank and no worries of ever being evicted or being worried about rent etc. And i iever feel like moving out to some other city, i can out my apartment on rent or sell it.
After watching the first one, I can confirm the UK is nothing like the USA for buying your first home. You pay the deposit, solicitors fees and a surveyor that’s it. We have stamp duty but majority of first time buyers don’t pay it (including myself) My mortgage payment is £606pm ($739) and my next door neighbour pays £950 ($1159) to rent. Renters here also pay bills and taxes on the property, only maintenance is included But in 6 years in my house the boiler went (£1950) new one installed. And we replaced the dishwasher was £350. That’s all the maintenance we’ve paid in 6 years. Other home improvements have been recreational.
I think Ramit’s car buying advice makes more sense 15-20 years ago prior to so many vehicles being incentives to have cutting edge technology that tends to break or malfunction early-on. Nowadays it’s a great idea if you’re buying a car to buy a used with a decent track record, because you can check that track record of that make, model and year if it’s 3 or more years old. I personally like a car that’s more like 5-8 years old because there is even more data, depreciation and time for the vehicles with warts to present themselves. Warts are superficial issues like minor fender bender visuals or fades to the paint that don’t really matter towards the longevity of the vehicle running, but allow the vehicle to be sold for a bargain because a lot of people mistakenly judge a car by its exterior rather than the condition of the interior which matters. Always have a proper inspection for a used car mechanically obviously. Sometimes an ugly car outside is bad inside too. But plenty of times it’s just the outside with a problem. Similarly sometimes a car looks fine, but is awful under the hood. Also there is a big supply and lower demand for vehicles right after they exceed their warranty, which is usually around 5 years or 50-100k miles. Personally, I’d rather not have to deal with a dealership at all. And having 6 or more years of information on a vehicle is probably more useful than having a 3 year old vehicle with less information, but a year or two still under warranty. A lot of people just want to know what brand they can or cannot trust. But every brand makes bad cars. Some brands are more consistently problematic. But no brand is guaranteed to make a good car when the car is new. Even if it’s the last year of a generation of a vehicle that was good in year one and two which have a 3 plus year track record at the time of looking to buy the last year of that generation new. Manufacturers usually make a lot of changes between the first and last year of a car’s generation. Mid-generation refreshes are the norm now. Changes to the manufacturing location or procedure of a car mid generation is also normal. Another thing to consider is: are you the type of person who wants to drive the same car for 7 years? For me the answer is no. I couldn’t afford a new car every 7 years. So I buy older fun used vehicles that I expect to have to replace every 7 or so years anyway. Also, do you want more proven older technology which will cost you more at the gas pump? Or do you want to have a hybrid or PHEV or EV which can save you money every year of ownership on fuel costs if it doesn’t break down. Personally I think full EVs are for the future for most people (especially if you can’t charge at home). Full EVs make more sense as one of 2 or 3 vehicles for a couple rather than the one vehicle for a couple or individual. Hybrids and PHEVs IMO are great options for right now for anyone who has an emergency fund and drives. And grouping hybrids as ICE by the ultra progressives or hybrids as EVs by ultra conservatives is a mistake. EVs, PHEVs, hybrids and ICE vehicles are all different and have their own merits and risks.
The other thing about retirement funds is that you don't HAVE to withdraw, until you are over 70 years old, then it's a small RMD (required minimum distribution). You are probably not working as much, your income is lower, so you will be in a lower tax bracket than when you were pulling in the wage$$.
One of my neighbors and I were chatting and he said to me he is retiring in 2025 and he will be pulling his tax-free money from his 401k and also claiming his Social Security at 62. He was adamant that I was wrong when I told him that the 401k was penalty free but not tax free at any age. I told him have a chat with his HR person because he was wrong.
Closing costs are not a "phantom cost." They're a known part of buying a house that you can and should budget and prepare for. If you're getting all the way to the closing table and just finding out about the existence of closing costs, someone (lender and/or real estate agent) has failed very badly at their job. The real phantom costs of buying a home are the ones that are harder to plan for: the costs of moving, furnishing, painting, decorating, fixing all the little (and big) things that you didn't (or did) realize were broken, or that always happen to break right after you sign on the dotted line. Those can cost thousands, on top of the $52K you need to bring to the closing table. And on top of all that, there's the 3-6 months of expenses you need to keep in a "what if I lose my job?" emergency fund. While you're saving for a house, your down-payment fund can double as a general-purpose emergency fund - but as soon as you make the down payment, you can't do that anymore. All told, to put a 10% down payment on a $400K house, you probably need close to $80K in savings.
I completely agree with the 3 year car used car idea. I have only purchased two used cars in my life and I am in my lower 50s. First car I bought 3 years old at 40% of MSRP. Audi A4. Paid it off in 4 years and kept it for 14 years. Then bought a 2013 BMW 328 Xdrive. I have had that car for 9 years purchasing it for 40% off MSRP. Both instances allowed me to save the money for the next 19 years which is great. We also decided to buy my parents outback...and have kept that car for 8 years. At my parents age, it now makes sense for them to lease so they don't have to deal with any cars issues. That said, I will probably do this later in life. I think Nisha is spot on with her advise. Lines up with what I have been doing. Ramit gives the right advice too if you are financially well off.
What a great question. If you ask people this, they'll give you a bunch of logical-sounding reasons ("they're not building land any more") but if you keep digging, the answer is almost always: "Because that's what successful people do"
Depends on your goals and dreams. For some a house represents stability for them & their family. It also represents a vehicle to pass on some wealth when they pass away (assuming its sold and shared among trustees).
@@Ocq4395 most people dont run the actual numbers and thats why most folks are house poor. so they look stable but they are not. having a house with no savings and no investments is nuts. the house is essentially a big purchase masquerading as an investment. i have a friend now who has a house valued 160 thous more than they paid. but she doesnt want to sell it anyway and she is in debt and going through a divorce. also when i brought up maintenance she just shrugged and took off a ton of money from what she perceived as profit lol
@@ramitsethimy reason is because I like to own things that I can do whatever I want with. I can paint my walls the color I want and mount things on them, do renos on my house, and know I won't get evicted so the landlord can move his kids in or whatever. This house had a rental water heater and furnace when I moved in and the first thing I did was to buy them out to be out of any stupid contracts. Renting is perfectly fine and better in a lot of circumstances, it's just not for us.
took me a long time.....way too long....to realize and understand the real estate buying and selling process has been conducted a certain way for a very long time but that doesn't mean you have to follow their rules. Sure, there are legalities involved that are mandatory but, after that, play by your own rules, set your own terms, because nothing is set in stone. Commissions, fees, closing costs, etc.,. - it's all negotiable. My biggest lesson has been to not over-commit, don't give away my leverage, don't be afraid to ask for what I want and don't be afraid to walk away from a deal
As a tax preparer I do not put any money in retirement funds. Seen way too many people get penalized for withdrawing their own money plus taxed. It's insane. Also, tax rates are generally trending up, which means there is a good chance you'll pay more taxes if you defer them to a future year. Trust me, the government did their homework before they rolled those retirement programs out. They wouldn't do them if it wasn't stacked in their favor.
I understand that it can be very shocking if you don't know about closing costs, but if you signed your LE, you would have seen your "estimated closing costs" and "estimated cash to close" at the bottom of page 1 in the "costs at closing" section. If you had an issue you should've addressed it at that time. Page 2 shows a further breakdown. Also, no one doing a mortgage transaction will ask you if you have your down payment, and then ask if you have your closing costs as a separate question. They will ask, "Where are the funds to close coming from? Your total cash to close is X, please wire the money." While I find the girl in the first clip is definitely entertaining, it moreso highlights that people will sign just about anything and everything without understanding what they are doing lmao.
This consumer society in the US is a modern day phenomenon. The reason u can easily buy into the idea that Americans are undisciplined spenders is bc ur family just got her in the last 30+ years so u don’t have grandma who saved under the mattress and I. Coffee pots and pulled it out for HS graduations college funerals and new babies
bought a house... struggled to sell it. spent 8k to get into it, monthly mortagage of 1300 a month at 125k in rural america, and owed 7k to sell it. its my own dang fault😢
When I got approved for my mortgage the loan agent walked me through all the costs up front right away so there were no surprises at closing. Is this not normal?
I was interested in the book tour but saw the $70 ticket price. Although I enjoy your videos and podcast, this seems steep for a book tour. Could you provide more detail about the event and what we’ll get out of it?
Phantom cost yes. But it saves the headache of keep finding new place when the rent increases. I have such a hard time listening whenever ramit brings up rent. I would not be able to be around both in laws and my own parents if i didnt purchase this home 12 years ago when i have yet been able to live in but had to rent it out. I never regret it. Now i can sell for 5 times the purchase price and “rent” if i want to. But stock investments do not help me much. Each to their own. But pls do understand not everyone can pick up and move to another state or are lucky with stocks etc.
I would love to not want to buy a house but my rich life is having a lot of land for my daughter and I to enjoy. Ride dirt bikes together, have horses. Unfortunately impossible when renting.
Why do people buy big ticket items by just bringing the down payment. You should walk in not only with a down payment and closing costs, but a huge sinking fund expecting something needs to be fixed that was missed from the inspection. Just have lots of cash otherwise don’t buy a house you can’t afford.
Hi Ramit, Love your content. I see you have an event nearby around my area. Although you have great content for couples in regards to financial education literacy, I was wondering if the event would also be beneficial for people who are not in any type relationship commitment.
Cardone is not correct. 401(k)s can contain Roth funds and he never asked if the funds were traditional or Roth. But even if they're traditional, most people's income tax rate in retirement will be lower than in their earning years and the taxes on these retirement funds are lower for many people for that reason alone.
You can't really compare UK and US housing markets. For example in the US the interest rate is fixed for the entire 15 or 30 year duration of the loan. The principal and interest payment will literally never change. That is not the case in the UK.
With the housing and rental costs in Canada and the inflation rate I think buying a house is more important. In the US you still have a productive economy. Basically the only thing anyone does to make money in Canada is invest in housing.
the first tiktok was funny but I refuse to belief that people go and buy a house (or anything else that's more than $500.00 really) and don't do their research on it first. when we were starting to look for a house I looked up every potential cost that could come up, had a buffer for every single category and wrote it all down. with the house price itself I made sure to run the numbers on everything, monthly mortgage, tax, insurance, monthly savings for reno's/maintenance, etc. to make sure we would still be able to afford it even if one of us lost their job / got sick for a long period of time or what else. All of that before we even went to showings. And when we found a house we liked, before putting an offer, the next round of research began where I looked up the neighborhood, amenities, property sale history for the house and surrounding properties. maybe I'm extreme but I could not sleep at night not knowing for sure what's going on.
I love these videos. Well done. Only thing I will say though, is be careful with the 1% yearly addition thing. It's probably fine if your getting great payrises, and have a really strong career. But if you start on 5% at 20, for example, you'll be at 45% when your 60. Which might be fine if your earning $200k, but if your still on $50k that's gonna be tough. You're probably more likely to top out around 25% I'd imagine, but that should be enough to still have a very nice retirement. You'll hit that number at around 45, should already have a decent portfolio, and potentially another 20 years at 25% contributions. I did none of that mind, only just hitting 45 now, and only recently started putting in around 25% (including employer contribution). Wish I had started sooner.
It's not very relevant to your point about saving for retirement, but I'm pretty sure the article that pops up at 6:28 is incorrect. The median household amount held in transaction accounts was around $8000 in 2022 according to the survey of consumer finances (a gold standard afaik), so half couldn't have less than $5000. I don't know where their survey numbers come from, but I suspect this is similar to the surveys polling which Americans are "paycheck to paycheck," ie based on surveys that don't share their methods and likely not well-sampled. Just thought I'd let you know, correct me if I'm wrong
If you save in a ROTH 401K, aren't the contributions NOT taxed when you withdraw after 59 1/2 years old? (I know that employer contributions will be taxed because they are traditional).
The phantom costs apply to funerals as well, I know this is not a good topic, but this happened yrs ago, when my brother passed away. The Funeral Director quoted us one price, and when we got to the funeral home to sign the papers it was additional costs added on. They know you are grieving, and they take advantage. I was not surprised because I looked it up on the net before I went, so I was prepared for the 'phantom' costs, which for a funeral is a pretty low life thing to do, but every body is a A-hole trying to get you no matter what the situation is. Bottom line, business people are the scum of the earth in more ways than one, regardless of what business they are in-you are just the VICTIM, period end of sentences.
Grand cardone is still wrong because the tax rate might be higher in future but tax burden might be lower in future because you are not actively earning and withdrawing from tax deferred account on the same year in retirement. GC sucks as always.
It’s okay to be in apartment too but make sure you at least saving 35%-40% of household income and invest.. So you never feel like owning home..or if do so you can pay cash when you are in 40s..
"My landlord is greedy" says every renter who have never had to pay phantom costs on a house before. The landlord earns 5% net return on the house, ie less than a zero effort index fund, but he's greedy. He should sell the house and make the renter homeless instead.
There were two ridiculous instances when I purchased my home:
1. I was charged $45 to confirm my employment status and
2. We almost did not close because the dishwasher from previous owner did not pass inspection
Not only do you have to check your wallet/bank account when buying a house, you also need to check your sanity😮
‘Your windows need to be replaced to double-glazing, EU energy standard’. That was the statement that made me sell instead of renting through local government.
I bought a house in Finland and there were no hidden costs. The number on the price tag is what we paid! It's a very simple system compared with the US or UK.
I don't remember many extra costs when I bought in Canada either. Just the lawyer fee which was $1200 CAD.
We bought second home in Italy and it was 2000EUR for notary and translator and that is it.
Bought our house in Australia. The costs associated to buy our home? $90,000. Taxes, legal fees, other fees. That's with a 60% deposit on the mortgage. Insane! I laughed at the $12,000 fees here.
About 7 months ago I had a major life change and essentially had to start life over in every way possible. Your channel has been so instrumental on the financial side of things and I really appreciate it. I don't have a large income (relatively speaking) at the moment, but I'm investing and saving and debt free and can pay for all of my needs so I'm pretty content for now. Your channel has helped me orient myself to get there. Just mentioning this to say thank you!
Ramith I can’t wait to come to your book tour in Chicago! Got my tickets and I’m so excited to be in a room full of like minded individuals! Your teachings on finances and budgeting has been the only one that has stuck with me long term. My finances have done a complete 180 and I’m super excited about what I can accomplish if I stay on track! See you in chi town 😊
See you in Chicago!
In Chi too! Is this only for couples? Don’t want to look weird showing up solo.
@ nope! If there are tickets left go! Most of his online content does seem to be geared towards couples. I guest that is the demographics he is advertising to but everything in his book applies to anyone in any financial situation or relationships status!
"Grant Cardone accidentally makes a good point" LOL
Its a rare thig indeed ;-D
The immediate eye roll when Grant Cardone opens his mouth 😂
Grant doesn't even know what the 55 rule.
Me too I can’t stand him either.like a drill to the face 😂
I try to avoid his posts online.😊
I appreciate your point that we don’t all have to agree on money. Personally, I think buying a brand new car is one of the biggest wastes of money available to a consumer.
Glad to hear we agree on the car thing. I like to buy last year’s model in January. It’s still a new car, maybe a few hundred miles from test driving, but the dealer will give you discounts on it. Then I drive the car for 15 while saving money for the next one.
@@mykidsaresupercute that’s how I roll as well.
I buy Certified Preowned Vehicles instead of new. My current vehicle is 8 years old and still works like a charm.
Yeah, I'm at the point where I don't ever want to work on my own car again, nor pay someone else to do it. I've been driving beaters for most of my life and the amount of time and energy spent stressing when there's a break is not worth the amount of money saved on the initial purchase.
@ I don’t trust used cars anymore. I know too many people who have had issues and have to dump thousands into their used car.
Calling people out for "needing their money trapped" is literally so accurate. This is why CPP and Social Security are so important. People criticize these programs, but trust me we'd have seniors in abject poverty without them. In a few decades these kids watching TikTok finance gurus will put everything on "red" at age 50 and end up with zero savings and ZERO income. On their face because they didn't prepare and want to get rich quick.
Yup, I'm in Europe so thank god for penions. But I know a bunch of people who seem able to afford way more then I do with similar income levels. (I do not want to be them when an significant unexpected bill pops up).
3:20 my wife and are in the middle of moving house, have settled the new place and are about to settle on our old house. On the advice of our accountant (prompted from a question by us after watching your videos), we have an extra $65k for these kind of phantom costs. We also have a list of things we want to do to the new house. After we're done, whatever is left over will go back into the house
I learned about the house down payment + closing cost issues while I was looking for a house to buy.
Be ready for an extra down payment (just in case) if the loan doesn't cover the full appraiser purchase value of the house you want.
Always have a buffer of cash. Buy only what you can afford.
Nischa is soooo good she is my fav on my advice!
Cardone is correct on this rare occasion...but let's be honest, so is a broken clock twice a day.
Also, you only get taxed on the amount you withdraw that year, not the total amount in your 401k. If you only withdraw $100k, you only get taxed on $100k. The withdrawal is counted as income; if you have less expenses as a retiree (paid off house, kids already out of college, less mouths to feed, etc.) you might withdraw less 'income' from retirement than your earned income from a job a decade previous. Lots of variables to consider.
Guy could have defeated him by uttering the magic word "Roth"
@@darbymori350 true, but someone will pay income tax on it. They're not very good means of estate planning, because the person who receives it often is in a higher tax bracket. Better to leave Roth or regular taxable investments because your heirs get stepped up basis.
@@TonyCox1351 that guy didn't seem to know much about what he was taking about in that snippet
LOL! Facts though!
At a party a year ago a friend told me their goal was 2 million dollars of mortgage debt. When I reacted with shock they asked how I invested money then. "Index funds, bonds, anything else?"
Sounds like he's on the Robert kiyosake plan lol.
Your friend sounds like one of the many lost disciples of Robert Kiyosaki lmao Hell bent on borrowing money to buy assets, then leverage that asset to buy another one, so on and so forth until you’re leveraged 10-1 but fuck it if you die it’s someone else’s problem, if you declare bankruptcy it’s the banks problem, and you don’t pay tax on borrowed money (but you’ll sure as hell pay interest)
I usually buy a car 2 to 3 years old and purchase the extended warranty usually covering 100k miles bumper-to-bumper. It still ends up cheaper than buying new and you still have a fairly new car.
Grant Cardone completely forgot to mention a Roth 401(K) where the taxes are already paid and the funds are withdrawn tax free.
I'm saving up $200k in cash before I buy my first condo. That'll cover my down payment, closing costs, earnest money, and 12 month emergency fund. Currently at $160k, should be there by the end of 2025.
Good for you!!!!!!!!!!
Awesome video! We love your help and information! We make all our kids, nephews and nieces watch your videos! 👍🏻🎄👍🏻
I've been putting my increase into my 401k every year for a decade. We are set to retire in 10 years at 45.
May I ask what you’re number to retire on? That’s great news!
@@Dynastyproductions94probably 2.5 mil
🙌 Awesome!! By your name, I'm guessing you're the type who doesn't spend on material goods, but experiences? I bet that helps!
@Dynastyproductions94 it's 2.5 mil
Regarding the first video, I’ve worked in banking and mortgage lending and the “phantom costs” as you may put it are what people don’t factor in with the whole own vs rent debate. If you’re going to own a home the ever persistent and rising costs of insurance, property taxes, legal fees, financing fees and sheer upkeep and maintenance are ASTRONOMICAL when totalled up over decades and decades.
I have seen way too many people consistently refinance, go into more debt, and eat away at the equity that they have in their real estate due to the fact they cannot afford to keep up with the cost of owning the home itself or they’re going into high interest consumer debt to keep it afloat…..which they eventually roll into their mortgage and re-amortize.
Sad, but true.
Omg my two gurus on the thumbnail picture attracted me to the video like a fly to a muffin 😂❤
it always feels validating when they agree with the other
Grant Cardone? Really? You probably, like many, want to parallel his money, not his life...but the two are very inexorably intertwined.
@ They have changed the thumbnail. When I clicked earlier it was Ramit and Nischa, I’d swear
@@mercheg.8397same!
I saw Nischa, too
0:30 As someone from the UK we genuinely have non of these extra fees. Obviously a Surveyor and Lawyer but that's not even a thousand for each for a first time house buyer. The other bank fees are normally waved and even then they are not high. Even if you didn't try to save the fees in total would be about 5 times lower than quoted in that first video. That's including lawyers and a Surveyor. It shows how unfortunately Americans pay for stuff nobody else does and how they just take it at face value as the price for doing business, when it's not.
I’d rather pay those fees than not have the option to have a fixed rate mortgage.
Really? They are paying tens of thousands each year on top of whatever rate they have. I prefer the UK system thanks
capitalistic nature of america. wall street gold mine has taken over businesses these days. it has done significantly more harm than good in the last 15 years. every company is inventing new ways to get money from people.
Uk has stamp duty that first time buyers would need to pay next year.
Better than a variable rate mortgage. Because of that, people in all the other former british colonies are suffering like hell and going bankrupt.
A fixed rate mortgage with consistent payments until the end of the term is more than enough to deal with the other hassles.
Seeing your mortgage payment go from what you expect as 2K, and having it jump to 4K the next year because interest rates raised 3% is a bitch.
Renting might be sensible advice for the US, but it doesn’t necessarily apply to the UK. In the UK, tenants have minimal protections-no-fault evictions are common, and many landlords fail to maintain their properties adequately. Essential repairs, including heating during winter, can often take weeks to complete. So while renting might make sense in places like New York, it may not be as practical in other contexts. I wish Ramit made that caveat explicit.
Well, considering all of his videos are intended for people living in the US and not the UK (probably 90% of his audience is in the US), I don't really see why he needs to. I also don't see why he would need to learn UK real estate laws either.
Since this is a very US-centric podcast, the caveat for a UK audience makes no sense, considering who his target audience is.
Personally, I ran the numbers when I bought my flat in the Seattle area, it was cheaper to own, even with the phantom costs.
When I bought in early 2021, I was saving $500/month over renting. That difference has grown to $1,000 per month, due to the market for flats being soft back then and interest on a 30 year fixed rate mortgage being less than 3%.
If I was thinking about buying now, there’s no way that I would do it, since buying when considering repairs, maintenance, etc. along with PITI would be more expensive than renting.
He’s never been against buying…he’s against blindly following the societal norm of “having” to buy a house in order to be an adult.
He has said in other videos simply to run the numbers in order to see if renting or buying makes sense. He’s never been anti-home ownership; he’s been pro-EDUCATED home ownership.
10 years ago I rented an 700 sq foot apartment for $3200 in NYC and I could see the street through a crack in the wall. We asked the landlord to fix it and he basically stuffed it with that puffy yellow stuff that doesn't do anything to insulate. Landlords don't maintain stuff here either and NYC has some of the best renter rights in the country. Would still be a better deal than buying there though. NYC is out of control
His main point isn't not to buy, it's to actually do the math and make sure you're making a good choice.
So it would still work in the UK you would just have different variables to include when doing the math to see if you want to rent or buy.
@@rebeltheharem7028 I’m not sure about the exact makeup of his audience, but he frequently appears in interviews with UK-based RUclipsrs, who primarily have a UK audience (that's how I discovered him). His book has a special edition for the UK and I think is a bestseller here. While he may not need to single out the UK specifically, it would be reasonable for him to include a caveat that his "rent, don’t buy" rule is advice tailored to the US and may not necessarily apply in other countries.
for my vehicle, I buy a new car and hold it for 10+ years. I'm 35 and I'm on my second car and 5 years in. My vehicle just needs to get me from point A to Point B safely and reliably.
Yeah but to get a car with low or no maintenace that would more the likely not be 10 years old too right?
@@donaldlyons17sure, but a 3-5 year old car isn't really "new" but most can last 10 years from that point. my Camry is 17 years old and runs great. most cars made in the past few years will easily last over a decade with basic maintenance (unless you have a BMW or something).
Thanks for the video Ramit
We got nailed with a 6k TAX STAMP nobody told us about when we bought our first home. My wife was so upset becasue she couldntd get hold of me because i was at a concert and coudlnt get a hold of me to tell me. thankfully at the time my parents were able to loan us that so we closed on the house and paid them back over the years.
I totally relate to the phantom costs part! Just like RIT Sati mentioned, my wedding had so many unexpected expenses.
Wasting money on a huge wedding. I don't get it
I made the "mistake" of buying a brand new car in 2015. 43k it cost me, financed it over 4 years at 2%. But when I bought it I bought it with the intention to run it into the ground. I made sure it was a car that was going to grow with me (bought an SUV at 23). Now I'm 32 and it's still going. 290000 kilometers on it and I'm going to keep using it until it dies. So my not super well thought out plan at 23 actually didn't turn out to be too bad.
About the 401k. I have been blessed to max out my 401k every year. So now, after 27 years, I have a decent amount for retirement and hopefully in 10 years I will be in a great position.
Let’s
Correct Grants comment. All Roth accounts ARE tax free
true but theres a difference. some people can get roth 401ks and don't get taxed later, the default is traditional which isn't taxed now but is later. i'm sure you know but just spreading the info
@@litapd311 Traditional IRA is what I think you're referring to. Roth IRAs and Roth 401k receive post tax contributions and pay no taxes at distribution/withdrawal.
Traditional IRAs receive pre-tax contributions and then pay tax at withdrawal.
THANK YOU!! I HAVE BEEN USING YOUR FOUR CATEGORIES TO HELP ME BREAK IT UP. NICE
Indian here, i bought my first apartment at 25 and repaid the loan by 32. It has since 3.5x in value. No debt so all my earnings go to my expenses and savings. I bought my car in 2010 and still use it cos i dont see a point in spending on an another car cos traffic has become horrible and post covid i work from home most of the time. And when i have to go out i take a cab or take the train. I rarely use my car in the last 2-3 years. And i have no interest in buying a car to show others that i have a new car. But i do spend some money on motorcycles cos thats my passion. Own house, some money in the bank and no worries of ever being evicted or being worried about rent etc. And i iever feel like moving out to some other city, i can out my apartment on rent or sell it.
In Wisconsin I paid $1,100 in closing costs through my local credit union.
After watching the first one, I can confirm the UK is nothing like the USA for buying your first home.
You pay the deposit, solicitors fees and a surveyor that’s it. We have stamp duty but majority of first time buyers don’t pay it (including myself)
My mortgage payment is £606pm ($739) and my next door neighbour pays £950 ($1159) to rent. Renters here also pay bills and taxes on the property, only maintenance is included
But in 6 years in my house the boiler went (£1950) new one installed. And we replaced the dishwasher was £350. That’s all the maintenance we’ve paid in 6 years. Other home improvements have been recreational.
I think Ramit’s car buying advice makes more sense 15-20 years ago prior to so many vehicles being incentives to have cutting edge technology that tends to break or malfunction early-on.
Nowadays it’s a great idea if you’re buying a car to buy a used with a decent track record, because you can check that track record of that make, model and year if it’s 3 or more years old. I personally like a car that’s more like 5-8 years old because there is even more data, depreciation and time for the vehicles with warts to present themselves. Warts are superficial issues like minor fender bender visuals or fades to the paint that don’t really matter towards the longevity of the vehicle running, but allow the vehicle to be sold for a bargain because a lot of people mistakenly judge a car by its exterior rather than the condition of the interior which matters.
Always have a proper inspection for a used car mechanically obviously. Sometimes an ugly car outside is bad inside too. But plenty of times it’s just the outside with a problem. Similarly sometimes a car looks fine, but is awful under the hood.
Also there is a big supply and lower demand for vehicles right after they exceed their warranty, which is usually around 5 years or 50-100k miles.
Personally, I’d rather not have to deal with a dealership at all. And having 6 or more years of information on a vehicle is probably more useful than having a 3 year old vehicle with less information, but a year or two still under warranty.
A lot of people just want to know what brand they can or cannot trust. But every brand makes bad cars. Some brands are more consistently problematic. But no brand is guaranteed to make a good car when the car is new. Even if it’s the last year of a generation of a vehicle that was good in year one and two which have a 3 plus year track record at the time of looking to buy the last year of that generation new. Manufacturers usually make a lot of changes between the first and last year of a car’s generation. Mid-generation refreshes are the norm now. Changes to the manufacturing location or procedure of a car mid generation is also normal.
Another thing to consider is: are you the type of person who wants to drive the same car for 7 years? For me the answer is no. I couldn’t afford a new car every 7 years. So I buy older fun used vehicles that I expect to have to replace every 7 or so years anyway.
Also, do you want more proven older technology which will cost you more at the gas pump? Or do you want to have a hybrid or PHEV or EV which can save you money every year of ownership on fuel costs if it doesn’t break down. Personally I think full EVs are for the future for most people (especially if you can’t charge at home). Full EVs make more sense as one of 2 or 3 vehicles for a couple rather than the one vehicle for a couple or individual.
Hybrids and PHEVs IMO are great options for right now for anyone who has an emergency fund and drives. And grouping hybrids as ICE by the ultra progressives or hybrids as EVs by ultra conservatives is a mistake. EVs, PHEVs, hybrids and ICE vehicles are all different and have their own merits and risks.
The other thing about retirement funds is that you don't HAVE to withdraw, until you are over 70 years old, then it's a small RMD (required minimum distribution). You are probably not working as much, your income is lower, so you will be in a lower tax bracket than when you were pulling in the wage$$.
One of my neighbors and I were chatting and he said to me he is retiring in 2025 and he will be pulling his tax-free money from his 401k and also claiming his Social Security at 62. He was adamant that I was wrong when I told him that the 401k was penalty free but not tax free at any age. I told him have a chat with his HR person because he was wrong.
Closing costs are not a "phantom cost." They're a known part of buying a house that you can and should budget and prepare for. If you're getting all the way to the closing table and just finding out about the existence of closing costs, someone (lender and/or real estate agent) has failed very badly at their job.
The real phantom costs of buying a home are the ones that are harder to plan for: the costs of moving, furnishing, painting, decorating, fixing all the little (and big) things that you didn't (or did) realize were broken, or that always happen to break right after you sign on the dotted line. Those can cost thousands, on top of the $52K you need to bring to the closing table.
And on top of all that, there's the 3-6 months of expenses you need to keep in a "what if I lose my job?" emergency fund. While you're saving for a house, your down-payment fund can double as a general-purpose emergency fund - but as soon as you make the down payment, you can't do that anymore.
All told, to put a 10% down payment on a $400K house, you probably need close to $80K in savings.
I completely agree with the 3 year car used car idea. I have only purchased two used cars in my life and I am in my lower 50s. First car I bought 3 years old at 40% of MSRP. Audi A4. Paid it off in 4 years and kept it for 14 years. Then bought a 2013 BMW 328 Xdrive. I have had that car for 9 years purchasing it for 40% off MSRP. Both instances allowed me to save the money for the next 19 years which is great. We also decided to buy my parents outback...and have kept that car for 8 years. At my parents age, it now makes sense for them to lease so they don't have to deal with any cars issues. That said, I will probably do this later in life. I think Nisha is spot on with her advise. Lines up with what I have been doing. Ramit gives the right advice too if you are financially well off.
i have no desire whatsoever to own property. idk why everyone is obsessed with buying a house.
What a great question. If you ask people this, they'll give you a bunch of logical-sounding reasons ("they're not building land any more") but if you keep digging, the answer is almost always: "Because that's what successful people do"
Depends on your goals and dreams. For some a house represents stability for them & their family. It also represents a vehicle to pass on some wealth when they pass away (assuming its sold and shared among trustees).
I would rent my way out of this sh** hole
@@Ocq4395 most people dont run the actual numbers and thats why most folks are house poor. so they look stable but they are not. having a house with no savings and no investments is nuts. the house is essentially a big purchase masquerading as an investment. i have a friend now who has a house valued 160 thous more than they paid. but she doesnt want to sell it anyway and she is in debt and going through a divorce. also when i brought up maintenance she just shrugged and took off a ton of money from what she perceived as profit lol
@@ramitsethimy reason is because I like to own things that I can do whatever I want with. I can paint my walls the color I want and mount things on them, do renos on my house, and know I won't get evicted so the landlord can move his kids in or whatever.
This house had a rental water heater and furnace when I moved in and the first thing I did was to buy them out to be out of any stupid contracts.
Renting is perfectly fine and better in a lot of circumstances, it's just not for us.
took me a long time.....way too long....to realize and understand the real estate buying and selling process has been conducted a certain way for a very long time but that doesn't mean you have to follow their rules. Sure, there are legalities involved that are mandatory but, after that, play by your own rules, set your own terms, because nothing is set in stone. Commissions, fees, closing costs, etc.,. - it's all negotiable. My biggest lesson has been to not over-commit, don't give away my leverage, don't be afraid to ask for what I want and don't be afraid to walk away from a deal
As a tax preparer I do not put any money in retirement funds. Seen way too many people get penalized for withdrawing their own money plus taxed. It's insane.
Also, tax rates are generally trending up, which means there is a good chance you'll pay more taxes if you defer them to a future year. Trust me, the government did their homework before they rolled those retirement programs out. They wouldn't do them if it wasn't stacked in their favor.
So you save in a regular investment account right?
Tax preparers are not enrollment agents or CPAs who are special in Taxation with credentials.
Awesome 👌
We are renting. Just paid off all of our vehicles. Thanks for all the advice
I’m sure you give some good advice but I immediately don’t trust anyone who in one single video is trying to sell their book, planner and tour.
Whoever was talking to Grant Cardone sounded so confident in what they were saying.. while also not knowing wtf they’re talking about.
I understand that it can be very shocking if you don't know about closing costs, but if you signed your LE, you would have seen your "estimated closing costs" and "estimated cash to close" at the bottom of page 1 in the "costs at closing" section. If you had an issue you should've addressed it at that time. Page 2 shows a further breakdown. Also, no one doing a mortgage transaction will ask you if you have your down payment, and then ask if you have your closing costs as a separate question. They will ask, "Where are the funds to close coming from? Your total cash to close is X, please wire the money." While I find the girl in the first clip is definitely entertaining, it moreso highlights that people will sign just about anything and everything without understanding what they are doing lmao.
Nischa is next level 😄
Our banking apps in South Africa do what rocket money does , except the subscription things.
Which banks are they? All? Moving to CT soon ❤
What phantom costs? I've bought two properties and both of the loan you sign lists an itemizes the costs. Read the contracts.
He’s saying people don’t get that, people also forget about house insurance, maintenance costs, property tax, etc. . .
I bought a new and plan to keep it for at least 8/10 years.
This consumer society in the US is a modern day phenomenon. The reason u can easily buy into the idea that Americans are undisciplined spenders is bc ur family just got her in the last 30+ years so u don’t have grandma who saved under the mattress and I. Coffee pots and pulled it out for HS graduations college funerals and new babies
These are my favorite videos
TIPS:
1. Always plan for a buffer.
bought a house... struggled to sell it. spent 8k to get into it, monthly mortagage of 1300 a month at 125k in rural america, and owed 7k to sell it. its my own dang fault😢
When I got approved for my mortgage the loan agent walked me through all the costs up front right away so there were no surprises at closing. Is this not normal?
Just read every line in the bloody document and write questions down. It's pretty straight forward.
Penalty tax versus income tax. Income tax always. Words have meaning and they know we don’t listen clearly. 😂😂😂😂
I definitely agree with Ramit on owning a house vs rent
Fun fact: Nisha is the one who made me discover you 😊
I was interested in the book tour but saw the $70 ticket price. Although I enjoy your videos and podcast, this seems steep for a book tour. Could you provide more detail about the event and what we’ll get out of it?
Phantom cost yes. But it saves the headache of keep finding new place when the rent increases. I have such a hard time listening whenever ramit brings up rent. I would not be able to be around both in laws and my own parents if i didnt purchase this home 12 years ago when i have yet been able to live in but had to rent it out. I never regret it. Now i can sell for 5 times the purchase price and “rent” if i want to. But stock investments do not help me much. Each to their own. But pls do understand not everyone can pick up and move to another state or are lucky with stocks etc.
I see Nischa, I click
I would love to not want to buy a house but my rich life is having a lot of land for my daughter and I to enjoy. Ride dirt bikes together, have horses. Unfortunately impossible when renting.
After watching this reaction video, I have made the very difficult decision to fire DJ Vlad as my personal finance advisor.
Why do people buy big ticket items by just bringing the down payment. You should walk in not only with a down payment and closing costs, but a huge sinking fund expecting something needs to be fixed that was missed from the inspection. Just have lots of cash otherwise don’t buy a house you can’t afford.
Hi Ramit, Love your content. I see you have an event nearby around my area. Although you have great content for couples in regards to financial education literacy, I was wondering if the event would also be beneficial for people who are not in any type relationship commitment.
How can people go for months without seeing a recurring $36 transaction? I'd go nuts with worry if I didn't reconcile accounts at least weekly.
Cardone is not correct. 401(k)s can contain Roth funds and he never asked if the funds were traditional or Roth. But even if they're traditional, most people's income tax rate in retirement will be lower than in their earning years and the taxes on these retirement funds are lower for many people for that reason alone.
If your 401k is a Roth, then you don't have to pay taxes when you withdraw from it.
If you do not have kids then it probably make sense to rent as you do not have to worry about schools.
My costs were like £2500 on top of the house price and as for the mortgage, the rate is lower than my cash ISA returns.
You can't really compare UK and US housing markets. For example in the US the interest rate is fixed for the entire 15 or 30 year duration of the loan. The principal and interest payment will literally never change. That is not the case in the UK.
When did you buy your house?
Where do you get your clothes? They look so nice!😎
Great video. Just dust off the mic 🎤 LOL!!!
On the Grant Cardone thing, I have my 401k set up as a Roth 401k, do I still need to pay taxes on that? That's something that wasn't mentioned.
Nope if you’re set up as a Roth, no taxes. Your contribution was already post-tax, same benefit as a Roth IRA.
@@aas55 Awesome, I'm glad I opted for that option. Thank you!
Grant has no clue about 401k and just uses myths and exaggerated myths of 401k’s
He always conveniently fails to mention Roth 401k's and depreciation recapture. Probably because they totally destroy is narrative.
@@longview3k69 same we use Roth option for 401k
With the housing and rental costs in Canada and the inflation rate I think buying a house is more important. In the US you still have a productive economy. Basically the only thing anyone does to make money in Canada is invest in housing.
Grand cardone😂
For cars, simply buy a low mileage approved used from a premium brand.
It's much logical that way and financially sensible
Inspection per house and we had to do two because of some law about flippers.
the first tiktok was funny but I refuse to belief that people go and buy a house (or anything else that's more than $500.00 really) and don't do their research on it first.
when we were starting to look for a house I looked up every potential cost that could come up, had a buffer for every single category and wrote it all down. with the house price itself I made sure to run the numbers on everything, monthly mortgage, tax, insurance, monthly savings for reno's/maintenance, etc. to make sure we would still be able to afford it even if one of us lost their job / got sick for a long period of time or what else. All of that before we even went to showings.
And when we found a house we liked, before putting an offer, the next round of research began where I looked up the neighborhood, amenities, property sale history for the house and surrounding properties.
maybe I'm extreme but I could not sleep at night not knowing for sure what's going on.
If you get your financial advice from TikTok then you deserve everything that’s coming your way.
Ramit and other good people are on TikTok, don’t blame the app, there are fake gurus on every app and platforms.
I love these videos. Well done. Only thing I will say though, is be careful with the 1% yearly addition thing. It's probably fine if your getting great payrises, and have a really strong career. But if you start on 5% at 20, for example, you'll be at 45% when your 60. Which might be fine if your earning $200k, but if your still on $50k that's gonna be tough. You're probably more likely to top out around 25% I'd imagine, but that should be enough to still have a very nice retirement. You'll hit that number at around 45, should already have a decent portfolio, and potentially another 20 years at 25% contributions.
I did none of that mind, only just hitting 45 now, and only recently started putting in around 25% (including employer contribution). Wish I had started sooner.
It's not very relevant to your point about saving for retirement, but I'm pretty sure the article that pops up at 6:28 is incorrect. The median household amount held in transaction accounts was around $8000 in 2022 according to the survey of consumer finances (a gold standard afaik), so half couldn't have less than $5000. I don't know where their survey numbers come from, but I suspect this is similar to the surveys polling which Americans are "paycheck to paycheck," ie based on surveys that don't share their methods and likely not well-sampled. Just thought I'd let you know, correct me if I'm wrong
Ramit, when are you coming to Toronto, Canada?
another reason to lease a car would be.. if its electric.. that category is changing so fast that you dont want to buy an electric car.. lease it IMHO
If you save in a ROTH 401K, aren't the contributions NOT taxed when you withdraw after 59 1/2 years old? (I know that employer contributions will be taxed because they are traditional).
"Seller to pay closing costs."
Can you talk about a 403B?
The phantom costs apply to funerals as well, I know this is not a good topic, but this happened yrs ago, when my brother passed away. The Funeral Director quoted us one price, and when we got to the funeral home to sign the papers it was additional costs added on. They know you are grieving, and they take advantage.
I was not surprised because I looked it up on the net before I went, so I was prepared for the 'phantom' costs, which for a funeral is a pretty low life thing to do, but every body is a A-hole trying to get you no matter what the situation is. Bottom line, business people are the scum of the earth in more ways than one, regardless of what business they are in-you are just the VICTIM, period end of sentences.
The problem is mosat people will spend it instead of buying the house and end up with nothing.
Can't trust someone that saves ten years for a wedding, biggest rip off next to funerals
I believe it a cultural thing, he is not wrong or right on the house thing. I wish he would frame it correctly.
How can someone who saved for a wedding give any good financial advice to anyone. Saving up for a wedding is like borrowing money for a wedding. 😂😂😂
Saving is not borrowing. I have a very simple introductory book on personal finance that I can recommend for you.
You don’t pay taxes on a Roth 401k though!
Well, you pay income tax upfront...
out of all social media. I think banning tiktok would be best for better for mankind
Grand cardone is still wrong because the tax rate might be higher in future but tax burden might be lower in future because you are not actively earning and withdrawing from tax deferred account on the same year in retirement. GC sucks as always.
It’s okay to be in apartment too but make sure you at least saving 35%-40% of household income and invest..
So you never feel like owning home..or if do so you can pay cash when you are in 40s..
"My landlord is greedy" says every renter who have never had to pay phantom costs on a house before.
The landlord earns 5% net return on the house, ie less than a zero effort index fund, but he's greedy. He should sell the house and make the renter homeless instead.
Did nobody else notice that it’s an AI version of Ramit?
Thanks for sharing this video. I was wondering what you thought of financial advice coming from Porter Stanberry. Is he legit or a fear warrior?