My unlicensed advice is to avoid taxes because they are in most cases the largest expense for most people. That being said if you max out all your tax advantaged accounts you can significantly reduce your tax burden. Have a emergency fund in a high interest earning account (usually the online banks pay the best) then with the excess money, spend with a purpose. Purchase a Prius instead of a gas guzzling truck, bring your lunch to work instead of going to the restaurant, learn to be a do it yourselfer. Change your own oil, shampoo your own carpets, mow your own lawn, etc. doing these things will make your net worth shoot up. Also, avoid bad debts. 👍🏽
Comment at 30:45 is incorrect. The deductible IRA is superior to a taxable brokerage because the investment gains are tax deferred. What the guest probably meant is that deductible IRA is equivalent to Roth IRA in cases where the tax rate doesn't change in retirement. Still, I'd argue that Roth IRA is superior. A $6k contribution to a Roth IRA achieves greater tax savings than a $6k deductible IRA contribution.
Yeah I think that's what he meant, comparing Reg IRA/401k vs the roth versions. Why do you say a roth is better though, assuming same tax bracket now vs retirement? It comes out exactly the same if the tax bracket stays the same. Furthermore, you'd anyways want to leave some taxable income for later due to the standard deduction.
One thing to consider - will the ambition and work ethic that lets you achieve independent financial means - 'retire' when you want to? Personal experience taught me the answer is "NO" I asked myself "what signs have I ignored about my discovery when I attempted retirement?" If you've ever taken a too-long vacation and towards the end of it, said to yourself "I can't wait to escape the 'novelty' of waking up and having nothing productive to do all day" Another sign: in college, there is a 5, 6, or 7 week break from early December to late January (depending on your school). If you felt like you were wasting time and couldn't wait to get back to your studies over that long break, this is an 'early warning sign' I tried to retire in my late 30s and discovered the motivation, ambition, and satisfaction of productive work did not want to 'retire' when I wanted to. Also, the people in our family who tried to retire passed away at relatively young ages. I've been working ever since. The advice is, set a target for attaining independent financial means (for example, by owning income-producing assets like a business, real estate, etc) then leave the door open for continuing to have a nice reason to get out of bed each day. Shalom!
R' Yitzchok, it was amazing. One of the best I heard on Kosher Money. Lot of Lomdus I have to listen 2 or 3 more times to this shiur to have it klor ;) Thank you Eli, thank you R' Yitzchok
Great episode, thank you! I'm surprised that you haven't touched even for once the fact that when following this same strategy but instead investing in blue chip DIVIDEND PAYING companies you can have the same or even better return (by reinvesting dividends) without having to sell a single stock at retirement age, simply by living off of dividends....
@koshermoney, can u talk to a professional about which line of work to choose so that later on when your in your 50's- 60's u have job security. Your not getting fired because of ur age being a liability to the company or the specific industry that your working in feels ur redundant/or just old.
I am pretty happy with my 50 / 50 strategy on the ira. Half goes to tax deferred half goes to non deferred. 50% roth, 50% traditional. The roth is good for sudden costs, dropping 100k on an investment or surgery or whatever, and having the traditional for draw.
12k is not the annual max for a individual. It’s 6k. Later in the video an example was given of a 25 year old retiring at 65 (40 years) and the guest gave numbers using a 12k annual max which is incorrect.
Or, you can retire in Playa del Carmen or Mazatlán and live off your social security income and let your money grow to leave it to your children. The average teacher or policemen in Mexico make maybe $600 dls a month. So, if as a couple you make $4000 a month in social security, if you are careful, you would still have money left at the end of the month.
Depends on having a paid off house or not. Many people only think "great" returns are 10%. Funds like XLK, QQQ return much more on average. There's also dividend funds now that pay 10-20% or more.
You can't put $1K a year into an IRA as an individual! I believe it's about $6K if your under 50. Maybe he's talking about both a husband & wife, each having a job, contributing to their individual IRA or joint. Passive income is not allowed to be invested into an IRA.
Impressive insights! For beginners like me, managing and staying updated can be overwhelming. Are you an experienced investor or do you have a strategic approach for staying informed??
I was able to pay up all my mortgages in two years while working with a Financial Advisor. I’m 48 and my husband 54 we are both retired with over $1.3 million in net worth and no debts. We got to realize that the secret to financial freedom is having a financial advisor who would guide you through the path of investment.
the canadian equivalent of an ira is the tfsa tax free saving account. 401k equivalent is rrsp
My unlicensed advice is to avoid taxes because they are in most cases the largest expense for most people. That being said if you max out all your tax advantaged accounts you can significantly reduce your tax burden. Have a emergency fund in a high interest earning account (usually the online banks pay the best) then with the excess money, spend with a purpose. Purchase a Prius instead of a gas guzzling truck, bring your lunch to work instead of going to the restaurant, learn to be a do it yourselfer. Change your own oil, shampoo your own carpets, mow your own lawn, etc. doing these things will make your net worth shoot up. Also, avoid bad debts. 👍🏽
Why are you against the roth?
@@thegreat9481 Where did you see me say that?
Glad you guys are back on MONEY!!!! Keep it up guys.
Comment at 30:45 is incorrect. The deductible IRA is superior to a taxable brokerage because the investment gains are tax deferred. What the guest probably meant is that deductible IRA is equivalent to Roth IRA in cases where the tax rate doesn't change in retirement. Still, I'd argue that Roth IRA is superior. A $6k contribution to a Roth IRA achieves greater tax savings than a $6k deductible IRA contribution.
Yeah I think that's what he meant, comparing Reg IRA/401k vs the roth versions.
Why do you say a roth is better though, assuming same tax bracket now vs retirement? It comes out exactly the same if the tax bracket stays the same. Furthermore, you'd anyways want to leave some taxable income for later due to the standard deduction.
Thanks!
One thing to consider - will the ambition and work ethic that lets you achieve independent financial means - 'retire' when you want to?
Personal experience taught me the answer is "NO"
I asked myself "what signs have I ignored about my discovery when I attempted retirement?"
If you've ever taken a too-long vacation and towards the end of it, said to yourself "I can't wait to escape the 'novelty' of waking up and having nothing productive to do all day"
Another sign: in college, there is a 5, 6, or 7 week break from early December to late January (depending on your school). If you felt like you were wasting time and couldn't wait to get back to your studies over that long break, this is an 'early warning sign'
I tried to retire in my late 30s and discovered the motivation, ambition, and satisfaction of productive work did not want to 'retire' when I wanted to. Also, the people in our family who tried to retire passed away at relatively young ages. I've been working ever since.
The advice is, set a target for attaining independent financial means (for example, by owning income-producing assets like a business, real estate, etc) then leave the door open for continuing to have a nice reason to get out of bed each day. Shalom!
R' Yitzchok, it was amazing. One of the best I heard on Kosher Money. Lot of Lomdus I have to listen 2 or 3 more times to this shiur to have it klor ;) Thank you Eli, thank you R' Yitzchok
guys! I've learnt a lot from you. thanks for the advises and effort. my greetings from Morocco
Love this podcast. Keep up the gud work guys 👍
Great episode, he is to the point.
Great episode, thank you!
I'm surprised that you haven't touched even for once the fact that when following this same strategy but instead investing in blue chip DIVIDEND PAYING companies you can have the same or even better return (by reinvesting dividends) without having to sell a single stock at retirement age, simply by living off of dividends....
That's true.
Dividends are overrated. A stock that pays a dividend is not *necessarily* a better choice than a stock that does not. It's all about growth.
@koshermoney, can u talk to a professional about which line of work to choose so that later on when your in your 50's- 60's u have job security. Your not getting fired because of ur age being a liability to the company or the specific industry that your working in feels ur redundant/or just old.
Wow! This is a great episode. Thank you!
I am pretty happy with my 50 / 50 strategy on the ira. Half goes to tax deferred half goes to non deferred. 50% roth, 50% traditional.
The roth is good for sudden costs, dropping 100k on an investment or surgery or whatever, and having the traditional for draw.
Fantastic interview. Thank you for the wisdom.
12k is not the annual max for a individual. It’s 6k. Later in the video an example was given of a 25 year old retiring at 65 (40 years) and the guest gave numbers using a 12k annual max which is incorrect.
i believe he meant 6k per spouse, which is 12k annually
6k per person. So a married couple can contribute 12k per year as long as there is 12k of earned income.
Another great video! ❤ can you please put the links about the life insurance he’s talking about? That will be helpful for us. Thanks 😊 I
Another brilliant money guy! Im gonna watch this one again! Eli u know anybody in the williamsburgh Brooklyn area? Thats where im at.
You were speaking about 'Medicaid'. I think you meant Medicare (@ 12 mins into the video).
Great podcast . Thanks so much. 👏👏
Or, you can retire in Playa del Carmen or Mazatlán and live off your social security income and let your money grow to leave it to your children. The average teacher or policemen in Mexico make maybe $600 dls a month. So, if as a couple you make $4000 a month in social security, if you are careful, you would still have money left at the end of the month.
better to retire at 55 with 1m
or 45 with 700k (yes, you can easily live a very nice life with that much!)
55. 1 mil? How?
45? Only 700k? Please explain.
Not enough
Depends on having a paid off house or not. Many people only think "great" returns are 10%. Funds like XLK, QQQ return much more on average. There's also dividend funds now that pay 10-20% or more.
I mean this whole comment section just make Ye look right about everything he Said
Excellent speaker.
Thanks for the great content
I been holding shares of stock for years in robin hood and made money. Others may not because since the pandemic it has become a casino
What if you live from dividents? Would that affect you when market is going negative?
Dividends*
Only if the company cuts them. You can research how long they’ve been paying it out though.
Invest we must
You can't put $1K a year into an IRA as an individual! I believe it's about $6K if your under 50. Maybe he's talking about both a husband & wife, each having a job, contributing to their individual IRA or joint. Passive income is not allowed to be invested into an IRA.
As long as there is $12k coming into the household (even by one partner) than each can contribute $6k
$6,500 for 2023.
Retire in El Salvador.
Buddy needs to learn the difference between exacerbates and exasperates
Impressive insights! For beginners like me, managing and staying updated can be overwhelming. Are you an experienced investor or do you have a strategic approach for staying informed??
None of this applies if you are a man in the US and ever been married. Wife gets to retire. Man works till death.
Lchaim!!!
But can't you have both an...IRA and a 401K?
You can. But if you have a 401k, you have to know how the deductibility of your IRA works.
I was able to pay up all my mortgages in two years while working with a Financial Advisor. I’m 48 and my husband 54 we are both retired with over $1.3 million in net worth and no debts. We got to realize that the secret to financial freedom is having a financial advisor who would guide you through the path of investment.
If youre planning on "retiring" youre not gna be rich lol
Is that George Costanza? 👀