My buddy just got out of the military and recieved his back pay. He immediately bought the newest 2024 truck. 😔 i tried to convince him to watch you guys but no luck. I just put another $500 into my Roth IRA though 😎👍making my dollar bills work for me.
Former military officer here. Upon enlistment/commissioning to the military, all the military affiliated financial companies come in and pitch their products to the new servicemembers, loans, insurance policies, etc. I can’t tell you how many guys/gals drove off their first base/post in brand new cars bought with the low interest loans these companies offer. We called the new cars everyone bought after commissioning in the Navy “Ensign mobiles.” I had one Sailor tell me his car required more insurance because it’s worth more with the $6k rims he put on it. I told him he wasted his money putting $6k rims on a depreciating “asset”. The car was guaranteed to drop in value as soon as he started driving it. I could see the gears in his head turning. I told him my husband and I bought a house instead of paying for a big wedding and engagement ring. That is an investment because the value did increase. I think he actually understood what I was saying.
I got out in 2014 after 8 years. When I got out I had a lot of leave days that even after taking the full amount of terminal leave days, I still had a lot of days to sell back. On top of that, there was also the travel pay. On top of that, I made the huge mistake of taking all the money out of my TSP (Thrift Savings Plan) instead of keeping it or rolling it over into an IRA. I, as a single parent, was also receiving child support. All that money was gone in a few months. I was horrible with money, as most servicemen and women are. I am better now, but not where I feel I should be at my age.
I wonder if it’d be helpful for officers to require financial discipline as part of basic training, so that enlistees will be guaranteed to hear a decent amount of good financial advice and will associate good financial habits with the other positives they gain from their military (ex: discipline). It would honestly probably help the economy to have veterans be super financially literate and able to apply those skills to building wealth and starting businesses.
The wierdest realization was that my income was of the lower side of my friends, but I’m the wealthiest of them all by far. I was the only one that had any investing account other than 401k. One of my friends had a majority of his money in a savings account collecting less than .1% over a decade. Others spent more on going out to eat, brewery’s/bars, or multiple vacations in a year.
The only thing I’d ask you more about is the vacations. Spending time with my kids is the most valuable thing on earth to me. Taking vacations within your means that can leave your entire family feeling recharged and positive for another 6-12 months is a great use of resources in my opinion. To each their own. But in general yes I agree with you.
@@MindOverManaX I would agree, but it is by far nowhere in their means. 2 friends got married, bought a house the central air system needed to be replace instead they bought 2 window units, the overtop broke and it still not replaced. She was laid off and they still decided to go on a vacation. When she got another job they immediately started eating out more to the point that they know every spot in the area. He makes maybe 2/3 of the income, but they don’t give a match so he is putting nothing into retirement. She is doing a match, but outside that they have nothing in investments.
I once had a guy who took out a 401k loan mansplain to me that it’s a great financial move since he’s paying himself the interest that he would otherwise pay the banks. 🤦🏻♀️ Oh, and he also made fun of my old (and paid off) Toyota. 🤡
@@tk98jdI love having an old and paid off Toyota!! I still don’t fully understand the taking a loan out of the 401k process. If it means that I am withdrawing funds from participating in the market, then count me out. Those funds aren’t for me, they are for future me. The only grace I allow myself was to reduce my savings rate from the maximum allowed each year down to 15%. These extra dollars are giving me to ability to focus on paying my house off early
Our friends all drive new cars, renovate their homes every 5 years, go on lavish vacations, etc. Then you talk to them, and they are all broke! My one friend refinanced his home to go on a vacation and make a down payment on a Tesla. We are in the top 2% of income earners, and I drive an old minivan.
I drive a new car and go on vacations. The only reason I drive a new car is because I needed a reliable, comfortable car to drive long distances and that need arose during the inventory shortage as the pandemic was winding down. It made no sense to pay $35k for a used car with 100k + miles on it. I can afford the new car and plan to keep it until it dies. Our travel is covered by points/miles through travel hacking. I carry no credit card debt. A reliable car and travel (while I can) are important to me/us, but so is financial stability. I’ve found a way to balance it all without deprivation. My sister passed away at 39. I consider time more valuable than money.
I work with multiple individuals all with identical incomes. it is interesting too see the ones with a 300k+ house, a 60k car, credit debt etc while others live in 150k houses, drive 8k cars, and no credit debt.
@@Abraham.Lincoln22 google average home price by state you will find multiple states with an avg around 200k or less. You can pick a house that isnt turn key and DIY away. Pretty simple.
Thanks team for this video. I really needed this to realign myself. I live in the SF Bay Area and being surrounded by Teslas and BMWs, I always feel like I'm the poorest house in the richest area. But I make good money, my car is paid, my house is within my means, and I'm a financial mutant. I might not be the shiniest now, but in 30ish years, I'll be retired and retired well. Thanks again~
live in OC and feel the same. I keep getting tempted if i should upgrade every time i go to a friend's house and their house is double the price of mine.
Same in the suburbs outside Sacramento. Teslas, lifted trucks, huge SUVs, Mercs, BMWs...I feel "poor" in my 14 year old Porsche I bought for $25k cash 4 years ago. When you're putting 24.2% of your money away while half of the population is doing practically nothing, it hurts sometimes.
@@Jebidee I have some family down there and I totally know what you mean...there's a different caliber of Jones down there...the trends shift so much quicker too...
You know, I gotta admit I just love this channel I found it not all that long ago, but everything from vibes to advice is just top notch. I can't thank y'all enough.
The best thing my husband and I have ever done financially was start saving for retirement at age 22. We can’t believe what that “sacrifice” looks like now just in our early 40s, it takes off! It’s worth it!! Stick with it!
I have a few friends that make a ton more than me. They aren’t as focused on saving like my family is. Trying to be on track to pay off my house in 10 years from now (even if we never receive another pay raise). Found a way to live below our means while also truly living: concerts, travel, spending time with people
3:38 the math would actually make sense to be over 100%. The people who make over 500k also would be lumped in with the people who make over 100k and over 50k
Purely because I'm the only one in my close circle who budgets on a monthly basis, I am by far the richest of my three closest friends. We're all in our late 20s with comically low investments. I own a condo on a 30 year mortgage with about 40k equity as of last month, have 5k in savings and investments, own 2 garbage but paid off cars, and my only consumer debt is 27.8k in Student Loans. My net worth last month was 24k heavily weighed in the house. None of my friends have a 0 or higher net worth.
I completely believe that speaking as a dude in a somewhat similar age range, I'm astonished how many people I know that almost blow their entire paycheck every single month.
Don't gamble with the emergency fund, dont place it in the tax free wrapper because that has restrictions. As long as you have a savings account that pays interest on it until it needs spending it is doing its job. Set forget, spend, replenish then leave until needed again.
I feel I am more wealthy than many/most people around me. I say wealthy because I want to include things like; a self of accomplishment, reduction in overall stress and anxiety about potential events that may occur, and an overall feeling that my financial wellbeing is/will be just fine in the end. by the way, I really enjoy listening to your podcasts (sadly I don't get to your RUclips videos much). From someone who is just getting their RIA/Financial Planning practice off the ground, I look to firms like yours for inspiration. Keep up the good work.
I agree with you. There’s a big difference between owning a million in assets, earned over many years and making $1 million salary in one year. I’m not sure how many people who were asked understood the question.
On a level, it scares me that I am well off compared to most of my friends and neighbors. I look around and realize how above their means most people are living. I don’t generally talk about finances outside of my peer group at work, but we have a few friends who are not financially competent even though they think they are. There is a lot of living for today with no 10y, 20y, or any sort long term plan. When the music stops is a terrifying thought.
That roth emergency fund question may have involved a Canadian who did not fully understand the difference between a TFSA and roth IRA. The TFSA is a phenomenal emergency vehicle if you still have contribution room.
Thanks for the nuanced answer on the whole life insurance. My friends family was encouraged to get one before he became an adult since he was high risk for a med condition (and I believe they can't deny minors based on medical conditions). He declined and now is unfortunately unable to get life insurance
I genuinely believe the whole "whole life insurance is the worst" thing assumes everyone will be rich. Whole life insurance may be right for someone just trying to bury themselves without being a burden to their family and will have no money to pass on. If you have a medical condition and have no money your family is screwed when you die. It's like 5k to be cremated now days. It's wild.
There's nothing more dangerous than comparing yourself to the "average person" when it comes to your financial health. It may give you a false sense of security and pride in your current position. Don't lose sight of the fact that the average statistics for debt, income and net worth typically include *EVERYONE* (welfare recipients, unemployed/underemployed individuals, non-working spouses, elderly people on fixed income, etc). It's also not very fruitful to compare yourself against your friends and peers because they may not have the same financial goals and drive as you. Set your own goals and compare performance against that.
I genuinely feel that this channel has changed the trajectory of the life of my family. We've always been financially okay, making a great joint income with an affordable mortgage and no other debt. But after finding this show, my curiosity for personal finances has exploded. We have made so many changes in our finances over the past 2 years that shifted us from "doing fine" to majorly setting ourselves up for success in our mid 50s with early retirement/next endeavor (Currently husband and I are 31). Thank you so much for your channel and providing this education to your audience! It's literally changing lives! 🎉
3:45 Sorry I think you got confused.. those numbers are not stupider to stay below 100% when summed, because the categories are not mutually exclusive A person that earns 1M a year is going to also earn more than 50k a year
I'm wealthier than most of my friends, yeah. My wife and I both work and have no kids. Most of our friends are single income households with children. Our friends were met in the workplace so we all know what we make.
Currently 23, at 18 i joined the Marine Corps. Initially put 10% of my base pay into a tsp roth ira with a 5% percent match and 1% agency match. For the first 3 years my funds were conservative. In 2022, I swapped 80 funds into the aggressive C fund and boosted to 25% along with the matches. This is putting 1100 a month into my ira and 300 into other personal investments. Very fortunate to have learned this young through the military and i am still active duty only debt is my car that is a year from paying off. Watching your channel definitely has helped me manage my money.
Roth capacity is limited, and as soon as you draw down that $6500 to cover an emergency, or whatever amount, you’ve just permanently lost that amount of your Roth capacity’. It’s similar to time in that respect.
3:45 I'm a newer viewer so excuse the criticism. But at this point I yelled "no you're bad a math!" because this type of survey doesn't have to add to 100%... you could say 99% of people make over $1 a year, and 63% make over $50,000. Both can be true, but you're well over 100%. You could take a measure increasing every $5 from 0-$1m and have a total percentage in the 5 or 6 digits!
Interesting data, but I believe a lot of the people that are rich are that way because of their businesses and it doesn’t register under their personal income per se
Well part of the thing too though is older people make more. If you started at 60k and get 3% raises for 20 years you're over 100k. So I'm not surprised that 1/3rd have reached that much.
@@chesspwn7457 High desnity, high population centres are also high expense economies, so wages in New York or LA would be higher than midwest for example. So there is likely a mix here between what you said and what I said.
Or, say most of California is dual income households due to the higher cost of living. If both partners make at least $50k, you're there. Note for reference, my cost of living (nice suburb 25 miles outside Sacramento) is quite similar to Franklin, TN, where the guys are located.
I always max HSA. It is basically my medical emergency fund. It's part of step 4... Or even 4.5 to me. I keep $2k liquid in HSA in cash and invest the rest.
Real state has never been that appealing to me. As a home owner, this year alone I had to get a new garage door and repair my furnace. Two years ago I installed new carpet and replaced the front door. Not to mention that taxes and insure went up since the houses are over evaluated in my town. There are tons of expenses associated with being a homeowner.
Being live may be the reason for the comment, but I don't understand the comment about > 100%. - To make > 100k, you also make > 50k; so, people should necessarily be counted more than once. After that, I am also surprised at how high people think the %'s are for 500k +
Regarding Roth 401(k) contributions, its not all or nothing. My plan allows me to split my contributions between pre-tax and Roth. So you can have 75% go to pre-tex (getting the deduction today) and also start to build Roth with 25% of your contributions. Not a financial advisor, just thoughts.
Depends on your income level. If you are avoiding 12% tax today by putting in a pretax 4O1K, but then when you retire you are losing 22% in tax because your retirement income is higher than your income while investing... You would be better to of just gone into roth and been taxed at 12% upfront, and avoid the 22% tax for withdrawals at retirement. So the choice heavily depends on your current income and the tax rate for that -- and then the expected retirement income and the tax you would incur at retirement.
LOL - #52:02 "hyperbolic discounting" which is an exaggerated behavioral bias of time - disscounting, favoring the present much more than the future ----- nerd-dom from Brian strikes again !!!! 🙂
Just want to say thank you. Investing more money than paying in income tax. Watching it grow from just my contributions is fun. Can’t wait till the market puts some work in
3:44 Those probabilities are allowed to sum to > 100% since the percentages are for X greater than some value. e.g. if the data were incomes of 25k, 55k,150k,600k,1.1million then those percentages would be 80%, 60%,40%, and 20%.
1 hour 12 min - woman saying her friends say she’s investing too much - those are the same friends that will be asking if she has a room for rent, when they retire!
Can you guys do an episode on car leases? I work at a dealership and get benefits for new leases like $1,000’s of dollars off the MSRP, GAP insurance and a residual right around $10,000 in 3 years I don’t think leases would be a great option for very many people but it seems like some of them might not be too bad especially since the rates on some leases are lower than APR’s on financing
Just do the math. What would be your monthly expenses for lease vs buying (or better yet buying a relatively recent used car) and what would be the approximate value/cost at the end of the lease period in each case? If you get special benefits for working at the dealership the lease might be a better option for you. Or it might not.
@@xJayhawkFANx Do you really though? Do you actually get satisfaction from the mere fact of owning the car? Or do you just want use of the car for as little money as possible, and owning is generally the best way to accomplish that? If I could lease my car for half the long term average cost of owning it I'd gladly do that, but it's usually not possible. If his employer offers him a heavily discounted leasing option it might be a better choice than buying, it just depends on the details.
Here's an interesting fact. Only 10% of individuals that earn over $1 million a year is through active income(job.). 90% earn mostly through passive income.
We were overseas missionaries for the first 5 years of our marriage and we had to raise our personal support. We didn't have any debt and we had a pretty comfy net of support, even had huge gifts when we really needed it. We never realized we should have been doing anything but just putting that money into our low yield savings account and now we're kicking ourselves. Thankfully we just went from earning a collective $50k with a young child in daycare to over 3x that within a year. Now we have the money we never had and it's really hard not to spend it on ourselves and our daughter. Especially because just a few years ago we were living in a place where it was 5x cheaper to eat out every day than it was to purchase good food to cook. I could eat out really well on $4 per day there.
Yep, Bo, as long as that money is invested in good quality companies with good fundamentals and a good CEO, even if that “money” goes down, you still own SHARES. And those shara will probably come back up. Having said that, yes, you have to look at stocks and see which ones may be overpriced, too huh valuations, etc…but o said good companies - making sure their technicals aren’t over their skis.
I’m retired with a 7 figure IRA. I want to buy a new car, but if I pay cash and take the money out of my IRA I’m subject to 20% taxes. What can I do to not have to pay an extra 20% for the vehicle?
One idea: if you do not have other taxable income, you could finance the car over more than 1 calendar year and split your withdrawals between years. The simplest would be to buy the car in December, pay off half of it, then pay off the rest in January. That should lower your taxable income and minimize finance charges.
I'm 1 of 2 successful people in the friends group. Most of my friends have had bad hands dealt too them in life, and they'll never get out of or recover from.
The beginning graph drives me crazy. They didn't ask people how many households make $50-100k. They asked how many households make over $50k. So all those people that make $100k-1M+ should also be counted in the $50k bucket too, based on how it it written. It doesn't mean they calculated over 100% of people. It probably means the data is distorted because people were answering the question under 2 different perceptions. This is why so many surveys are useless.
Yeah, so once you have the emergency fund and 5 years in Roth if you can’t otherwise max contribute, then you can hold your emergency in the Roth in conservative return funds (fed funds is 5% right?) so what’s tax savings on 5%.. it’s effectively a 1% boost).. if you are maxing anyway, then no
Coming up on age 60, I don't have any friends, and I'm cool with that. Every friend I've ever had has let me down. Just having the wife is fine with me.
That's some bad luck my friend. I am seeing that happen to too many of my friends too. Also, it's never too late to make friends. And at your age, it's actually much easier to make life long friends 😊
@@bellmattwebb I find that the less time you have left, the less willing you are to investing it in someone who may or may not let you down in various ways. You are supposed to learn from your mistakes, not get burned over and over and over.
@@bellmattwebb I've had it ever since my wife and I got together. Aside from some medical issues/chronic pain beyond my control, I have a very happy life.
What is your recommendation on how to pay for expensive "toys." For instance, my husband and I are thinking of purchasing a camper. Is it OK to take. a loan, or should we save up and pay cash for this? Thanks.
Toys are not needs and thus shouldn't dig yourself a hole to buy. Wait till you can afford the toy to buy the toy. To do elsewise is the path towards ruin.
I'm only 4 minutes in, so I'm not sure if they correct themselves, but those statistics arent supposed to add up to 100%. That data would claim that 50% make less than 50k, 12% make between 50/100k, 12% make between 100/500k, 6% make between 500/1000k and 20% make over 1mil which does equal 100%. An off-handed statement about the people that answered this survey is rude and blatantly incorrect.
@@artemkalinchuksomething I said upset you? I'm not saying 20% of people make over 1mil, obviously the data shows 0.1%. Calling average Americans naive based on their estimation of what other people make is fair. But calling average Americans dumb because you misread a graph is rude.
Technical question on the emergency fund in the Roth - let’s say you put $6,500 into a Roth on Jan 3rd. In May, you have an emergency and need to pull out $5,000. Do you have to wait until the next year to put that $5,000 back in? I think it’s, yes, you have to wait, because there is no claw back provision.
What are 'deductibles'? Doesn't tell much to someone from Finland. Something you can deduct from taxable income in taxation? What specifically? We have some numbers and systems so different here where e.g. education and health care is (almost) free. And pension systems are automatic and managed by pension funds.
Deductibles relate to insurance. If my house burns down, my home insurance will pay me money to build a new one, but I must first pay my deductible (ie, once I pay them $500, they will process my claim). Deductibles are a way to limit clients from filing numerous insurance claims for every little thing. For home insurance they are $500-$2500 usually (if you have a bigger one, your cost of the insurance is less), auto is $100-$500, a routine doctor's visit is $15-$30. So, step 1 of the FOO wants you to have the insurance you need and enough cash on hand to utilize it if you need to. If this still doesn't make sense, the general rule of thumb is have $1000 in your checking account.
There are specific cases where whole life insurance can be useful for estate planning, especially if bought early and paid off within a few years. It's a horrible investment for many people, but for some people, it can be very helpful.
8% auto loan... I went to test drive a slightly used Corolla as I wanted to buy one new for 3.99% but couldn't find one in the color I wanted. Go figure, dealership is very good at selling and I caved when I thought I was given a good price (they can read you like a book). I wanted to not pay cash for new, wanted to keep my cash more liquid for upcoming expected expenses, but pay off after 2 or 3 years on a new car. Waited for the loan paperwork to come in, listened to the the payoff figure. In less than a week it had grown by $50 and was growing at $4 per day for interest (they wouldn't let me put down a large downpayment). Wrote a check and mailed the same day for payoff. Maybe I'll pay less in the end and be more happy going this route (hey, the car came pre-dented and scratched, so I don't have to obsess over the first one). I kept my old car and handed down to my daughter--she just has to get across town, so a 24 year old car is ok for that. Me, I drive over 100 miles a day for commuting. I spent the last year searching in the rustbelt to find something that I thought I could use, but... the used market is awful. Just awful. Not convinced I'll keep this car for 10 years but if I don't, it'll be because I can drop the cash to move on (while still saving 20%). Used to love cars when younger, now they are just a tool that does something for me, while costing me money. No joy now in them.
haha, he starts off with that "Over 100%" but I didn't see in the data saying it excluded the higher tiers. So it saying 20% make 1mil, 6% make less than 1 mil and over 500k, and 12% make over 100k but less than 500k. Cause all of the 1 mill people make over 500k. and thus would be a part of that number.
Do you recommend maxing out a traditional 401K or should we break it up and contribute enough to get the max, and then max out our ROTH IRA’s, then put whatever is left into the trad 401K?
I think a lot of people (FIRE folks specifically) are starting to realize setting a goal with a specific number attached does not automatically yield happiness once it’s achieved. They may find that there’s still something missing once they achieve that goal. Being rich is worthless if it comes at the cost of your loved ones, health, or other values.
Absolutely. Being rich alone makes you miserable. We often forget social wealth, those who are around you. You have to invest in relationships. Also experiences makes you grow as a person, it is cheaper to judt stay at home your entire life. As long as you save for your retirement and put a percentage aside every month I don't see why you wouldn't spend the rest to live a happy and memorable life.
I’m confused of how much of the 25% savings i should keep as cash for short term sinking budget goals and how much should be the minimum investment amount. Should certain savings goals have a specific length of time if starting from 0?
I believe they’re referring to investing only with the 25% , I think they assume you already have cash emergency funds in place therefore you don’t need to save cash.
Did the dude on the left just claim people are bad math because the percentages don't add to 100%? You do realise people can fall into multiple brackets right? Households making over 100k automatically also make more than 50k.
This is household income, not single income, huge difference. Also its income, not net worth. Also huge difference if you spend more than you earn. Many have high net worth because 50% of that is their home value especially their primary home, which is overinflated as far as i am concerned. I always exclude this in my net worth calculation.
Then you are not going by the fixed formula of net worth and are making up your own definition. You are supposed to include your primary residence. It’s what you own minus what you owe. I can also make up my own net worth by excluding my mortgages.. why not? It’s not correct though…
@@IrisP989 Of course you can. My house is paid for but I am not interested in taking out any loans against it. To me it's not an asset, it's a liability cause you're responsible for everything when it breaks, property taxes etc. If you sell and downsize and keep the difference in profit then yes. Imagine your net worth is 1 million and your paid off house is worth 500k and another person has the same 1 million networth but his house is $300k with $700k in 401k or better yet Roth 401k/Roth IRA.
My friends make less than me and all live more luxurious lives than me. Pretty obvious they won't have any reasonable retirement. Then again, they all have wealthier parents so they never understood a savers mindset. I have one friend who spends hundreds on collector shoes and thousands on collector cards. It's bad spending and they just go into debt for everything. They bought a 2$k phone because it's all on credit anyway.
My buddy just got out of the military and recieved his back pay. He immediately bought the newest 2024 truck. 😔 i tried to convince him to watch you guys but no luck. I just put another $500 into my Roth IRA though 😎👍making my dollar bills work for me.
Sadly, this is wicked common in the military industry.
Most industries and social circles don't talk about good finance and retirement plans.
Former military officer here. Upon enlistment/commissioning to the military, all the military affiliated financial companies come in and pitch their products to the new servicemembers, loans, insurance policies, etc. I can’t tell you how many guys/gals drove off their first base/post in brand new cars bought with the low interest loans these companies offer. We called the new cars everyone bought after commissioning in the Navy “Ensign mobiles.” I had one Sailor tell me his car required more insurance because it’s worth more with the $6k rims he put on it. I told him he wasted his money putting $6k rims on a depreciating “asset”. The car was guaranteed to drop in value as soon as he started driving it. I could see the gears in his head turning. I told him my husband and I bought a house instead of paying for a big wedding and engagement ring. That is an investment because the value did increase. I think he actually understood what I was saying.
I got out in 2014 after 8 years. When I got out I had a lot of leave days that even after taking the full amount of terminal leave days, I still had a lot of days to sell back. On top of that, there was also the travel pay. On top of that, I made the huge mistake of taking all the money out of my TSP (Thrift Savings Plan) instead of keeping it or rolling it over into an IRA. I, as a single parent, was also receiving child support. All that money was gone in a few months.
I was horrible with money, as most servicemen and women are. I am better now, but not where I feel I should be at my age.
I wonder if it’d be helpful for officers to require financial discipline as part of basic training, so that enlistees will be guaranteed to hear a decent amount of good financial advice and will associate good financial habits with the other positives they gain from their military (ex: discipline).
It would honestly probably help the economy to have veterans be super financially literate and able to apply those skills to building wealth and starting businesses.
We are going to be doomed if Bo’s not excited for an episode
Hahahaha
Lol so true.
Love this 😂
I have been thinking this for a while lol
LOL
The wierdest realization was that my income was of the lower side of my friends, but I’m the wealthiest of them all by far. I was the only one that had any investing account other than 401k. One of my friends had a majority of his money in a savings account collecting less than .1% over a decade. Others spent more on going out to eat, brewery’s/bars, or multiple vacations in a year.
Nice
The only thing I’d ask you more about is the vacations. Spending time with my kids is the most valuable thing on earth to me. Taking vacations within your means that can leave your entire family feeling recharged and positive for another 6-12 months is a great use of resources in my opinion. To each their own. But in general yes I agree with you.
To add about vacays, is making sure it's within reason (budget) and not over doing it while on it
@@MindOverManaX I would agree, but it is by far nowhere in their means. 2 friends got married, bought a house the central air system needed to be replace instead they bought 2 window units, the overtop broke and it still not replaced. She was laid off and they still decided to go on a vacation. When she got another job they immediately started eating out more to the point that they know every spot in the area. He makes maybe 2/3 of the income, but they don’t give a match so he is putting nothing into retirement. She is doing a match, but outside that they have nothing in investments.
As you have discovered, it’s not what you make, it’s what you keep. 😁👍🏻
I have a co-worker that considers his 401k as his emergency fund. Some people really lack financial literacy.
I once had a guy who took out a 401k loan mansplain to me that it’s a great financial move since he’s paying himself the interest that he would otherwise pay the banks. 🤦🏻♀️ Oh, and he also made fun of my old (and paid off) Toyota. 🤡
@@tk98jdI love having an old and paid off Toyota!!
I still don’t fully understand the taking a loan out of the 401k process. If it means that I am withdrawing funds from participating in the market, then count me out. Those funds aren’t for me, they are for future me. The only grace I allow myself was to reduce my savings rate from the maximum allowed each year down to 15%. These extra dollars are giving me to ability to focus on paying my house off early
Yikes!
My best friend (38 F) plans to completely rely on SS for retirement, no savings, no 401k, nada so…I feel your pain 😩💔
@@tk98jd you mean explain?
Our friends all drive new cars, renovate their homes every 5 years, go on lavish vacations, etc. Then you talk to them, and they are all broke! My one friend refinanced his home to go on a vacation and make a down payment on a Tesla.
We are in the top 2% of income earners, and I drive an old minivan.
Time for some more friends with similar aspirations as yourself.
I drive a new car and go on vacations. The only reason I drive a new car is because I needed a reliable, comfortable car to drive long distances and that need arose during the inventory shortage as the pandemic was winding down. It made no sense to pay $35k for a used car with 100k + miles on it. I can afford the new car and plan to keep it until it dies. Our travel is covered by points/miles through travel hacking. I carry no credit card debt. A reliable car and travel (while I can) are important to me/us, but so is financial stability. I’ve found a way to balance it all without deprivation. My sister passed away at 39. I consider time more valuable than money.
Yep checks out to me.
I work with multiple individuals all with identical incomes. it is interesting too see the ones with a 300k+ house, a 60k car, credit debt etc while others live in 150k houses, drive 8k cars, and no credit debt.
Where can I get a $150k house? Please advise.
@@Abraham.Lincoln22 google average home price by state you will find multiple states with an avg around 200k or less. You can pick a house that isnt turn key and DIY away. Pretty simple.
The midwest and the south has some houses like that
@@Abraham.Lincoln22 Just start doing crack. You'll find the houses.
Kankakee, Illinois.
Thanks team for this video. I really needed this to realign myself. I live in the SF Bay Area and being surrounded by Teslas and BMWs, I always feel like I'm the poorest house in the richest area. But I make good money, my car is paid, my house is within my means, and I'm a financial mutant. I might not be the shiniest now, but in 30ish years, I'll be retired and retired well. Thanks again~
You are doing it correctly. 👍🏻
live in OC and feel the same. I keep getting tempted if i should upgrade every time i go to a friend's house and their house is double the price of mine.
Same in the suburbs outside Sacramento. Teslas, lifted trucks, huge SUVs, Mercs, BMWs...I feel "poor" in my 14 year old Porsche I bought for $25k cash 4 years ago. When you're putting 24.2% of your money away while half of the population is doing practically nothing, it hurts sometimes.
@@Jebidee I have some family down there and I totally know what you mean...there's a different caliber of Jones down there...the trends shift so much quicker too...
@@Lucky008aauoof I'm sorry for all of the transplants from the Bay...you're definitely doing it right though!
You know, I gotta admit I just love this channel I found it not all that long ago, but everything from vibes to advice is just top notch. I can't thank y'all enough.
Most of the people I know, that are my age, still think 401ks aren’t worth it because they “want their money now”! I’m 26 years old.
"It's my money and I need it now!"😂
Same for me in late 30’s…it’s terrifying
The best thing my husband and I have ever done financially was start saving for retirement at age 22. We can’t believe what that “sacrifice” looks like now just in our early 40s, it takes off! It’s worth it!! Stick with it!
I'm 27, and concur. I have friends with a mortgage and a car note (or 2) that don't save shit because "my home will beat the market"
@@laurenm.6320I’m 22 and my boyfriend and hairdresser led me to check out these topics.. just opened my Roth! Hopefully it pays off like it did u
I have a few friends that make a ton more than me. They aren’t as focused on saving like my family is. Trying to be on track to pay off my house in 10 years from now (even if we never receive another pay raise). Found a way to live below our means while also truly living: concerts, travel, spending time with people
3:38 the math would actually make sense to be over 100%. The people who make over 500k also would be lumped in with the people who make over 100k and over 50k
Live show and Bo has more grace because it was obvious I got sideways 🤷♂️ - tune in next week 👍
Purely because I'm the only one in my close circle who budgets on a monthly basis, I am by far the richest of my three closest friends. We're all in our late 20s with comically low investments. I own a condo on a 30 year mortgage with about 40k equity as of last month, have 5k in savings and investments, own 2 garbage but paid off cars, and my only consumer debt is 27.8k in Student Loans. My net worth last month was 24k heavily weighed in the house.
None of my friends have a 0 or higher net worth.
Your snowball is small, but you are rolling it correctly. In 10-15 years, it'll be rolling itself.
Keep it up, kiddo, you’re going places! 🎉
I completely believe that speaking as a dude in a somewhat similar age range, I'm astonished how many people I know that almost blow their entire paycheck every single month.
LOL 20% of households make $1M??? Holy crap, people genuinely have no clue. It explains a lot though.
I couldn’t believe the last two guesses on the survey. Indeed clueless LOL
Social media sure makes you think every other person you meet is worth 1 to 20 mil 😂
Avoiding a car payment made me so much money
1:13:05 Not a huge fan of Dave Ramsey but I've always loved his response to this. "Tell them, my finances are not a democracy. You don't get a vote."
Ageee about Dave!
I like Dave, but I don’t follow each of his rules strictly
Don't gamble with the emergency fund, dont place it in the tax free wrapper because that has restrictions. As long as you have a savings account that pays interest on it until it needs spending it is doing its job. Set forget, spend, replenish then leave until needed again.
I feel I am more wealthy than many/most people around me. I say wealthy because I want to include things like; a self of accomplishment, reduction in overall stress and anxiety about potential events that may occur, and an overall feeling that my financial wellbeing is/will be just fine in the end. by the way, I really enjoy listening to your podcasts (sadly I don't get to your RUclips videos much). From someone who is just getting their RIA/Financial Planning practice off the ground, I look to firms like yours for inspiration. Keep up the good work.
I loved this Q&A.... and we need more Rebie!
thanks for leaving the live stream up!
People in the survey were mixing net worth with income.
That would make much more sense. No way that many people actually think 20% of households make $1M per year
I agree with you. There’s a big difference between owning a million in assets, earned over many years and making $1 million salary in one year. I’m not sure how many people who were asked understood the question.
On a level, it scares me that I am well off compared to most of my friends and neighbors. I look around and realize how above their means most people are living. I don’t generally talk about finances outside of my peer group at work, but we have a few friends who are not financially competent even though they think they are. There is a lot of living for today with no 10y, 20y, or any sort long term plan. When the music stops is a terrifying thought.
hoping you can get Ramit Sethi on your show!
Yes, by far. But most of them don’t know by how much and I like it that way.
That roth emergency fund question may have involved a Canadian who did not fully understand the difference between a TFSA and roth IRA. The TFSA is a phenomenal emergency vehicle if you still have contribution room.
11/10 video editing today! Love the video graphics give the editor a raise!
Thanks for the nuanced answer on the whole life insurance. My friends family was encouraged to get one before he became an adult since he was high risk for a med condition (and I believe they can't deny minors based on medical conditions). He declined and now is unfortunately unable to get life insurance
I genuinely believe the whole "whole life insurance is the worst" thing assumes everyone will be rich. Whole life insurance may be right for someone just trying to bury themselves without being a burden to their family and will have no money to pass on. If you have a medical condition and have no money your family is screwed when you die. It's like 5k to be cremated now days. It's wild.
There's nothing more dangerous than comparing yourself to the "average person" when it comes to your financial health.
It may give you a false sense of security and pride in your current position. Don't lose sight of the fact that the average statistics for debt, income and net worth typically include *EVERYONE* (welfare recipients, unemployed/underemployed individuals, non-working spouses, elderly people on fixed income, etc).
It's also not very fruitful to compare yourself against your friends and peers because they may not have the same financial goals and drive as you.
Set your own goals and compare performance against that.
I think it is fair to compare / gauge but have the discipline to not get comfortable and complacent.
I genuinely feel that this channel has changed the trajectory of the life of my family. We've always been financially okay, making a great joint income with an affordable mortgage and no other debt. But after finding this show, my curiosity for personal finances has exploded. We have made so many changes in our finances over the past 2 years that shifted us from "doing fine" to majorly setting ourselves up for success in our mid 50s with early retirement/next endeavor (Currently husband and I are 31). Thank you so much for your channel and providing this education to your audience! It's literally changing lives! 🎉
3:45
Sorry I think you got confused.. those numbers are not stupider to stay below 100% when summed, because the categories are not mutually exclusive
A person that earns 1M a year is going to also earn more than 50k a year
I'm wealthier than most of my friends, yeah. My wife and I both work and have no kids. Most of our friends are single income households with children. Our friends were met in the workplace so we all know what we make.
Currently 23, at 18 i joined the Marine Corps. Initially put 10% of my base pay into a tsp roth ira with a 5% percent match and 1% agency match. For the first 3 years my funds were conservative. In 2022, I swapped 80 funds into the aggressive C fund and boosted to 25% along with the matches. This is putting 1100 a month into my ira and 300 into other personal investments. Very fortunate to have learned this young through the military and i am still active duty only debt is my car that is a year from paying off. Watching your channel definitely has helped me manage my money.
I love the show guys and I am so much better with retirement now because of channels like yours.
Roth capacity is limited, and as soon as you draw down that $6500 to cover an emergency, or whatever amount, you’ve just permanently lost that amount of your Roth capacity’. It’s similar to time in that respect.
3:45 I'm a newer viewer so excuse the criticism. But at this point I yelled "no you're bad a math!" because this type of survey doesn't have to add to 100%... you could say 99% of people make over $1 a year, and 63% make over $50,000. Both can be true, but you're well over 100%. You could take a measure increasing every $5 from 0-$1m and have a total percentage in the 5 or 6 digits!
Interesting data, but I believe a lot of the people that are rich are that way because of their businesses and it doesn’t register under their personal income per se
Brian is always excited 🎉 🎉🎉
I am constantly reminded of the song "Back Porch" by the Presidents of the United States whenever I watch this channel.
That...old man is meeeee
A $4k engagement ring bought 25 years ago was a lot of money. I'm sure $4k bought a really nice ring
If roughly 1/3rd of households are $100k in earnings it makes me think that some places have extreme cost of living.
Well part of the thing too though is older people make more. If you started at 60k and get 3% raises for 20 years you're over 100k. So I'm not surprised that 1/3rd have reached that much.
@@chesspwn7457 High desnity, high population centres are also high expense economies, so wages in New York or LA would be higher than midwest for example. So there is likely a mix here between what you said and what I said.
Or, say most of California is dual income households due to the higher cost of living. If both partners make at least $50k, you're there. Note for reference, my cost of living (nice suburb 25 miles outside Sacramento) is quite similar to Franklin, TN, where the guys are located.
50k isn't too hard to reach these days. Two people making that is a 100k household.
Later in life 25 percent is small, once your debt is gone and your life style doesn’t go up, guess where your debt payment goes? To your investments
I always max HSA. It is basically my medical emergency fund. It's part of step 4... Or even 4.5 to me. I keep $2k liquid in HSA in cash and invest the rest.
Real state has never been that appealing to me. As a home owner, this year alone I had to get a new garage door and repair my furnace. Two years ago I installed new carpet and replaced the front door. Not to mention that taxes and insure went up since the houses are over evaluated in my town. There are tons of expenses associated with being a homeowner.
I do our household net worth every quarter. I love looking forward to getting our quarterly statements in the mail.
Being live may be the reason for the comment, but I don't understand the comment about > 100%.
- To make > 100k, you also make > 50k; so, people should necessarily be counted more than once.
After that, I am also surprised at how high people think the %'s are for 500k +
Regarding Roth 401(k) contributions, its not all or nothing. My plan allows me to split my contributions between pre-tax and Roth. So you can have 75% go to pre-tex (getting the deduction today) and also start to build Roth with 25% of your contributions. Not a financial advisor, just thoughts.
Depends on your income level. If you are avoiding 12% tax today by putting in a pretax 4O1K, but then when you retire you are losing 22% in tax because your retirement income is higher than your income while investing... You would be better to of just gone into roth and been taxed at 12% upfront, and avoid the 22% tax for withdrawals at retirement.
So the choice heavily depends on your current income and the tax rate for that -- and then the expected retirement income and the tax you would incur at retirement.
LOL - #52:02 "hyperbolic discounting" which is an exaggerated behavioral bias of time - disscounting, favoring the present much more than the future ----- nerd-dom from Brian strikes again !!!! 🙂
That ship course explanation was a d@mn wisdom diamond….good analogy!!!
Just want to say thank you. Investing more money than paying in income tax. Watching it grow from just my contributions is fun. Can’t wait till the market puts some work in
3:44 Those probabilities are allowed to sum to > 100% since the percentages are for X greater than some value. e.g. if the data were incomes of 25k, 55k,150k,600k,1.1million then those percentages would be 80%, 60%,40%, and 20%.
1 hour 12 min - woman saying her friends say she’s investing too much - those are the same friends that will be asking if she has a room for rent, when they retire!
Happy B-day, Bo!
Can you guys do an episode on car leases? I work at a dealership and get benefits for new leases like $1,000’s of dollars off the MSRP, GAP insurance and a residual right around $10,000 in 3 years
I don’t think leases would be a great option for very many people but it seems like some of them might not be too bad especially since the rates on some leases are lower than APR’s on financing
The Two Cents channel just did an eposide on leases - great timing!
Thank you both, I had never considered this and will check out Two Cents.
Just do the math. What would be your monthly expenses for lease vs buying (or better yet buying a relatively recent used car) and what would be the approximate value/cost at the end of the lease period in each case? If you get special benefits for working at the dealership the lease might be a better option for you. Or it might not.
I like owning my car personally
@@xJayhawkFANx Do you really though? Do you actually get satisfaction from the mere fact of owning the car? Or do you just want use of the car for as little money as possible, and owning is generally the best way to accomplish that? If I could lease my car for half the long term average cost of owning it I'd gladly do that, but it's usually not possible. If his employer offers him a heavily discounted leasing option it might be a better choice than buying, it just depends on the details.
The categories are not mutually exclusive, so they don't have to add up to 100%
I was thinking the same. Thanks for this comment. I thought maybe I was confused.
Live show and Bo has more grace because it was obvious I got sideways 🤷♂️ - tune in next week 👍
Watching you from Europe.
Here's an interesting fact. Only 10% of individuals that earn over $1 million a year is through active income(job.). 90% earn mostly through passive income.
Source?
If you work for your money, you become rich. If your money works for you, you become wealthy.
😂
😊
Ill pay less taxes in retirement than i do right now, ill take my chances and do a roth conversion when my income drops when im older.
Are you contributing to traditional IRA?
401k and backdoor roth
We were overseas missionaries for the first 5 years of our marriage and we had to raise our personal support. We didn't have any debt and we had a pretty comfy net of support, even had huge gifts when we really needed it. We never realized we should have been doing anything but just putting that money into our low yield savings account and now we're kicking ourselves. Thankfully we just went from earning a collective $50k with a young child in daycare to over 3x that within a year. Now we have the money we never had and it's really hard not to spend it on ourselves and our daughter. Especially because just a few years ago we were living in a place where it was 5x cheaper to eat out every day than it was to purchase good food to cook. I could eat out really well on $4 per day there.
Yep, Bo, as long as that money is invested in good quality companies with good fundamentals and a good CEO, even if that “money” goes down, you still own SHARES. And those shara will probably come back up. Having said that, yes, you have to look at stocks and see which ones may be overpriced, too huh valuations, etc…but o said good companies - making sure their technicals aren’t over their skis.
I’m retired with a 7 figure IRA. I want to buy a new car, but if I pay cash and take the money out of my IRA I’m subject to 20% taxes. What can I do to not have to pay an extra 20% for the vehicle?
One idea: if you do not have other taxable income, you could finance the car over more than 1 calendar year and split your withdrawals between years. The simplest would be to buy the car in December, pay off half of it, then pay off the rest in January. That should lower your taxable income and minimize finance charges.
Get a job.
I'm 1 of 2 successful people in the friends group. Most of my friends have had bad hands dealt too them in life, and they'll never get out of or recover from.
The beginning graph drives me crazy. They didn't ask people how many households make $50-100k. They asked how many households make over $50k. So all those people that make $100k-1M+ should also be counted in the $50k bucket too, based on how it it written. It doesn't mean they calculated over 100% of people. It probably means the data is distorted because people were answering the question under 2 different perceptions. This is why so many surveys are useless.
I'm about 15 minutes in. Can you do a similar video for net worth or savings & debt? I'm income-poor right now
It really sucks if you have to pull out your Roth for your emergency because you can't put it back
Yeah, so once you have the emergency fund and 5 years in Roth if you can’t otherwise max contribute, then you can hold your emergency in the Roth in conservative return funds (fed funds is 5% right?) so what’s tax savings on 5%.. it’s effectively a 1% boost).. if you are maxing anyway, then no
For the survey at the beginning of the video, did they only ask people who never had to work for their money?
You also have, at least, one viewer from Canada.
Is that $1 beer a Busch light
Yes
Before actually numbers show, my guesses:
$50k: 60%
$100k: 20%
$500k: 1%
$1m: 0.5%
Coming up on age 60, I don't have any friends, and I'm cool with that. Every friend I've ever had has let me down. Just having the wife is fine with me.
That's some bad luck my friend. I am seeing that happen to too many of my friends too. Also, it's never too late to make friends. And at your age, it's actually much easier to make life long friends 😊
@@bellmattwebb I find that the less time you have left, the less willing you are to investing it in someone who may or may not let you down in various ways. You are supposed to learn from your mistakes, not get burned over and over and over.
@nicodimus2222 sorry for your losses. People can be really crappy sometimes. I hope you find contentment
@@bellmattwebb I've had it ever since my wife and I got together. Aside from some medical issues/chronic pain beyond my control, I have a very happy life.
What is your recommendation on how to pay for expensive "toys." For instance, my husband and I are thinking of purchasing a camper. Is it OK to take. a loan, or should we save up and pay cash for this? Thanks.
Cash-ola.
Toys are not needs and thus shouldn't dig yourself a hole to buy. Wait till you can afford the toy to buy the toy. To do elsewise is the path towards ruin.
Cash, with enough cash afterwards to afford using and maintaining it.
I'm only 4 minutes in, so I'm not sure if they correct themselves, but those statistics arent supposed to add up to 100%. That data would claim that 50% make less than 50k, 12% make between 50/100k, 12% make between 100/500k, 6% make between 500/1000k and 20% make over 1mil which does equal 100%. An off-handed statement about the people that answered this survey is rude and blatantly incorrect.
I’m guessing you were the one that answered this survey?
@@artemkalinchuksomething I said upset you? I'm not saying 20% of people make over 1mil, obviously the data shows 0.1%. Calling average Americans naive based on their estimation of what other people make is fair. But calling average Americans dumb because you misread a graph is rude.
@@Shedderdude1 I’m not sure why you think I’m upset. I asked a simple question.
@@artemkalinchukI did not answer the survey. Was just correcting an incorrect statement.
Live show and Bo has more grace because it was obvious I got sideways 🤷♂️ - tune in next week 👍
Technical question on the emergency fund in the Roth - let’s say you put $6,500 into a Roth on Jan 3rd. In May, you have an emergency and need to pull out $5,000. Do you have to wait until the next year to put that $5,000 back in? I think it’s, yes, you have to wait, because there is no claw back provision.
Sadly, I don't think you can ever put the money back in. You can withdraw contributions, but you can only make the contribution once per year.
Some people are just in more debt than you
True! Many people would rather look rich buying expensive stuff with their cc. 😂
I drew this conclusion a long time ago….I see neighbors with boats and go on elaborate vacation and I’m like how? Answer = debt
my guesses were 70, 40,10,
Social media.
well cause 1/5 of their tiktok feed is people saying they make 1 mil and you can too if you buy their program.
@@chesspwn7457😂
What are 'deductibles'? Doesn't tell much to someone from Finland. Something you can deduct from taxable income in taxation? What specifically?
We have some numbers and systems so different here where e.g. education and health care is (almost) free. And pension systems are automatic and managed by pension funds.
Deductibles relate to insurance. If my house burns down, my home insurance will pay me money to build a new one, but I must first pay my deductible (ie, once I pay them $500, they will process my claim). Deductibles are a way to limit clients from filing numerous insurance claims for every little thing. For home insurance they are $500-$2500 usually (if you have a bigger one, your cost of the insurance is less), auto is $100-$500, a routine doctor's visit is $15-$30.
So, step 1 of the FOO wants you to have the insurance you need and enough cash on hand to utilize it if you need to. If this still doesn't make sense, the general rule of thumb is have $1000 in your checking account.
I’m weak off the new terms and phrases 😂😂😂
The engagement ring slip made me laugh haha
🎱 It is certain!
I am VERY surprised that 1 in every 1000 people in the US is making $1M a year!!! That's wild!
Does it make financial sense to buy a new car and keep it for 10 years or more?
Why not buy a year or two old with 15k miles and keep it 10 years?
There are specific cases where whole life insurance can be useful for estate planning, especially if bought early and paid off within a few years. It's a horrible investment for many people, but for some people, it can be very helpful.
What are you guys writing down when listening to these questions?
3:45 “this is well beyond 100%”
Someone in 1m+ group would also be in $50k+ group. So it shouldn’t add to 100%.
8% auto loan... I went to test drive a slightly used Corolla as I wanted to buy one new for 3.99% but couldn't find one in the color I wanted. Go figure, dealership is very good at selling and I caved when I thought I was given a good price (they can read you like a book). I wanted to not pay cash for new, wanted to keep my cash more liquid for upcoming expected expenses, but pay off after 2 or 3 years on a new car. Waited for the loan paperwork to come in, listened to the the payoff figure. In less than a week it had grown by $50 and was growing at $4 per day for interest (they wouldn't let me put down a large downpayment). Wrote a check and mailed the same day for payoff. Maybe I'll pay less in the end and be more happy going this route (hey, the car came pre-dented and scratched, so I don't have to obsess over the first one).
I kept my old car and handed down to my daughter--she just has to get across town, so a 24 year old car is ok for that. Me, I drive over 100 miles a day for commuting. I spent the last year searching in the rustbelt to find something that I thought I could use, but... the used market is awful. Just awful.
Not convinced I'll keep this car for 10 years but if I don't, it'll be because I can drop the cash to move on (while still saving 20%). Used to love cars when younger, now they are just a tool that does something for me, while costing me money. No joy now in them.
Is a 8% HELOC considered high interest debt?
Definitely. 8% on its own is high and my understanding is that many, if not all, of those loans are adjustable ⬆️
Is the face value of a term life insurance considered part of your net worth?
lol no only if you dead
haha, he starts off with that "Over 100%" but I didn't see in the data saying it excluded the higher tiers. So it saying 20% make 1mil, 6% make less than 1 mil and over 500k, and 12% make over 100k but less than 500k. Cause all of the 1 mill people make over 500k. and thus would be a part of that number.
Live show and Bo has more grace because it was obvious I got sideways 🤷♂️ - tune in next week 👍
Do you recommend maxing out a traditional 401K or should we break it up and contribute enough to get the max, and then max out our ROTH IRA’s, then put whatever is left into the trad 401K?
The FOO says get employer match, max out Roth IRA, then if you still have money put more into 401k.
Time to sign up for some free deliverables
I second the other two responders.
I think a lot of people (FIRE folks specifically) are starting to realize setting a goal with a specific number attached does not automatically yield happiness once it’s achieved. They may find that there’s still something missing once they achieve that goal.
Being rich is worthless if it comes at the cost of your loved ones, health, or other values.
Absolutely. Being rich alone makes you miserable. We often forget social wealth, those who are around you. You have to invest in relationships. Also experiences makes you grow as a person, it is cheaper to judt stay at home your entire life.
As long as you save for your retirement and put a percentage aside every month I don't see why you wouldn't spend the rest to live a happy and memorable life.
It's actually not over 100% because it didn't say "over but less than"
Is it up to 50,000? I was not sure if you were putting people who make less than 50,000 with the 50,000 group
I’m confused of how much of the 25% savings i should keep as cash for short term sinking budget goals and how much should be the minimum investment amount. Should certain savings goals have a specific length of time if starting from 0?
I believe they’re referring to investing only with the 25% , I think they assume you already have cash emergency funds in place therefore you don’t need to save cash.
Did the dude on the left just claim people are bad math because the percentages don't add to 100%?
You do realise people can fall into multiple brackets right?
Households making over 100k automatically also make more than 50k.
This is household income, not single income, huge difference. Also its income, not net worth. Also huge difference if you spend more than you earn. Many have high net worth because 50% of that is their home value especially their primary home, which is overinflated as far as i am concerned. I always exclude this in my net worth calculation.
Then you are not going by the fixed formula of net worth and are making up your own definition. You are supposed to include your primary residence. It’s what you own minus what you owe.
I can also make up my own net worth by excluding my mortgages.. why not? It’s not correct though…
@@IrisP989 Of course you can. My house is paid for but I am not interested in taking out any loans against it. To me it's not an asset, it's a liability cause you're responsible for everything when it breaks, property taxes etc. If you sell and downsize and keep the difference in profit then yes. Imagine your net worth is 1 million and your paid off house is worth 500k and another person has the same 1 million networth but his house is $300k with $700k in 401k or better yet Roth 401k/Roth IRA.
But is Bo excited about this episode?
I'm a huge fan but 8% is not high in 2023 for a used auto loan.
Are you serious?
@@I_NoahGuy I said USED car loan.
@@AnalyticalMenace Very.
My friends make less than me and all live more luxurious lives than me.
Pretty obvious they won't have any reasonable retirement.
Then again, they all have wealthier parents so they never understood a savers mindset. I have one friend who spends hundreds on collector shoes and thousands on collector cards. It's bad spending and they just go into debt for everything. They bought a 2$k phone because it's all on credit anyway.
Bo Hansen = Bo Handsome 😂