She talked about getting married. To me, that's where her house could be a reality. Instead of a $400,000 house she can't afford in a $580,000 market, on two incomes now an actual $580,000 house is in reach. The trick is to put practicality over what you want. Don't get a house you shouldn't, and don't get married just because you want a house.
I LOVE this format, and agree with comments requesting a line item on CSP for pre-tax retirement situation (just because context would be so helpful in understanding the full picture).
I’ve never found other financial influencers helpful, I mean they were, but I knew in my gut that their tips weren’t their best. Yours are actively engaging and realistic. And doable without real practicality for a diverse range of average ppl. Thank you.
This was brilliant. I'm in the UK and sometimes the figures being discussed are wildly unachievable in my context. But these were all realistic and I took something from each of them.
The single mom actually sounds like a divorced mom. It's very different raising a child with no support from the father vs being divorced and getting child support and equal custody. Its no wonder she can travel when there is a whole other parents involved.
Solo parenting vs Single Parenting. I get what you’re saying. Likely her food and other items are so low because she splits them with the child’s father or doesn’t include child support in her household money (she’s only counting her food and personal items etc). If she shares custody she has minimal childcare costs when she travels.
Junk drawer is universal. I feel a little better knowing that on an income of 22k gross annually i have similar figures to somebody older who is on 70k.
Hey Ramit -- Why don't you add a question for them to provide their pre-tax retirement contribution amount per month? I bet it would make the assumptions and advice so much more solid. (This is coming from one of those binge-watching money nerds/fans!)
Love this video, Ramit! Huge public school fan here as well. Don't have to send my child to a public school but I choose to! Not into Silicon Valley private school culture down here in Los Gatos, just personally. Stay at home mom here about your age... a little older. Silicon Valley. Worked in the corporate world for a long time but now get to devote a ton of my time to volunteer work in our local public elementary school and I am LOVING it. Thanks for the props for public schools here in your video :)
i love this channel. Its really a cool insight to see how others are doing and sort of contrast with how my own family is doing. It seems so taboo to talk about money and finances with friends and family.
Great to see a single person review. I'm not sure that assuming she would buy the median home as her first home is a good assumption. First homes are usually smaller and more affordable to build up equity. I agree that maybe a house isn't the best idea for her
6:36 I never thought about it like that. I am low income due to disability and the vulnerability of a lower # in emergency savings makes lots of sense even though percentage-wise it seems like it’s enough but it actually isn’t. Thanks for this insight.
I'm in a similar situation to you - income extremely low due to disability. I hadn't thought about what Ramit said in those specific words, but something I've noticed is how incredibly anxious I always feel about money even though I have a good emergency fund. I've figured out that the feeling is due to housing insecurity - if my landlord ever evicts me I don't have a high enough income to get another rental due to the housing crisis in my country blasting rental prices into the stratosphere (even in tiny rural villages), and my emergency fund is not enough money to purchase a house/unit/apartment/whatever, so I will be homeless. It's very upsetting that despite being in the best financial position that I have ever been in, I'm still one arbitrary decision by my landlord away from complete destitution.
For #1, the only problem with getting a higher paying job is that you'll need to work all 12 months of the year and maybe get 2 weeks for vacation. Doesn't leave much time for traveling.
It's Temporary. You Will Either Earn A Better Position That Will Give You More Vacation Time OR You Will Save And Invest Your Money Probably Which Will Allow You To Retire Early OR Switch To Working Part-Time And Be Semi-Retired , Which Will Allow You To Have More Vacation.
It depends on how and where you travel. I often spend much less when traveling. If I began renting out my home while traveling I would break even or make money. I have never regretted any of my travels. I don’t do debt except for mortgage.
For me the obsession of travel is there because it’s nice to see the world but also it’s actually achievable to go on a trip rather than buying a house. Plus a vacation is not a monthly expense where as housing is
To get a wider stance maybe Casey the single mother could rethink and save her $6k monthly income amount instead of just her $2.3k monthly expenses? If I was her I’d focus on working to get rid of those debts ASAP.
I’m surprised that a single mother with debt and a child would think she could afford to travel. We cut all vacations and eating out while we had consumer debt.
At @30:39 @Ramit did the math wrong. He is only adding the after tax money ($410) but I’m pretty sure this couple is maxing out 401k pre tax plus a match that is likely around an additional $2.5k a month. So they will have $3.3M in 25 years and can withdraw >$120k a year.
yep, i did some math myself and they're investing over $30K in retirement each year. They *could* reduce pre-tax investments by $1K / mo and still be well on track to withdraw more than their current salary ($108K) in retirement. That $1K should go towards building up their EF massively before being applied to travel, though, and in the future all of their salary increases should go towards maxing out their retirement again.
I think you're right. how do you even account for pre-tax investing on the CSP? do you just subtract from the Gross income? and then Roth IRA which is not deffered would go in "investments"? Very convoluted to see the total monthly investments.
This is what I struggle with on the CSP too! Like okay yes it looks like I'm only contributing a tiny percent to my Roth IRA. But it doesn't factor in the 10% that's coming out already and getting 50% matched in 401k before it ever hits my bank account
@@camille744investments is for both pre and post tax. You know how much your company takes out of your paycheque to put in your 401k, so just add that
I appreciate Ramit's content, but I have a couple of questions. First, when reviewing investments, I’ve noticed Social Security income isn’t included, even though it can replace up to 64% of earnings. Is he assuming Social Security won’t be available in the future? Second, when assessing home affordability, why does he use the median home price instead of considering a person's current income? There’s often a lot of inventory available below the median price.
Love this, being realistic and running some basic numbers that get you 80% of the way to accurate could be life changing. Questioning whether you realisticaly want to sacrifice almost everything just to own a small, single house in a single location which is barely an investment is SO important in my opinion. Even worse here in New Zealand, people seem to trip and fall into a house purchase and will basically bid whatever their bank told them they could maximally borrow.
I like this a lot, in addition to that if you want to simplify your financial life keep debt to a minimum. Cut expenses. Develop healthy habits like consistently saving money at regular intervals for investments to help you build wealth. If you work on this, your financial potential will grow exponentially. There are numerous opportunities to make money on the financial market. With the assistance of my financial advisor Abigail Ann Ryan , I was able to earn my first million dollars through passive investment in a variety of assets and right now my friend is on his way to a million too with her help. Goodluck!
Looks like she really knows her stuff. I also found her online page and read through her resume, educational background, qualifications and it was really impressive.
Single woman in the first one. I get her ambition for travel and wanting a place to call home. But she doesnt make enough to afford both on her single income. She either sticks to the travel life while renting, or gives up the travel life to focus on being a homeowner. The only way she can do both would be if her income doubled from what it is now.
Love these videos, I've learned a lot from them, even seeing people with quite higher income than mine, being rich is definitely not about numbers but a mindset!
My opinion: No, to the house for now, especially since there is no down payment saved. She needs to save enough in case her landlord sells the house though. Pay off student loan and raise the emergency fund to 1 year of expenses.
Ramit, why did you completely ignore that the second couple is likely maxing out their 401k when you projected their retirement savings? I am confused why cutting that pre-tax savings rate was not considered. Assume your team missed this. Avid watcher, excellent content overall. Thank you
We had 3 junk drawers. I emptied and cleaned out 1 so for the last several months we’ve had 2 junk drawers and 1 empty drawer 😂. I don’t know what to do with the drawer space now! It’s been junk for 4 years! This is an analogy for my CSP. I need to send it in…
I’m 26, I have no debt, putting $1,200 in retirement a month, make $130k a year, but no house yet. I still feel guilty buying things I want. What is wrong with me? Feel like I’m doing everything right though.
This is just my 2 cents, but do you know exactly what you want to do with your money? If you make short term (yearly), long-term (5-10 years), and lifetime (retirement era) goals you can figure out what you need to get there- money-wise, mental health wise, relationships to establish, etc. Knowing this and having a plan with the right people in your circle to help you grow will probably make you feel more stable.
My guess? You might come from a family of extremely frugal people, probably you observed some financial strain on the family as a kid, and internalized the tension that came along with "unecessary" or unexpected expenses. It's hard to shed, but it really helped me to reflect on my long term goals, then set monthly targets for investing and saving- transfers executed the day I'm paid- and any excess is mine to spend as I want. It's harder to feel guilty when you're working toward a goal and you know you're doing a good job with money management. Basically, following Ramit's advice is very helpful lol
CSP3: high yield investments are really a way you can go, but: 1) There might be more risk involved then you realise 2) They're probably not going to grow as fast, making Ramit's general 7%/year growth calculation unfeasible.
Yeah.... the drawer problem... I believe it's the world's plague. I have one myself (mid-east Europe), I've seen one at my sister's house in England and even my auntie in Rome, Italy. Thank you for all the clues you give to people - it is always good to listen to you 😎
I was a teacher for 10 years.. took a calculated risk to get a masters degree for 25k and was able to pivot to a new career that doubled my salary. (Teachers with 10 years of experience in my area in Florida are making 47k)
He did it twice. In retirement your total income can come down by 30% cuz you no longer have to save for retirement. Going from 108k down to $75,000 is perfectly fine
At 5:03 that's actually an increase of one percentage POINT not an increase of one percent. When I first heard the suggestion in another video, I wasn't sure whether you were talking about the amount or the percentage point. Even though the term used in the video is incorrect, the visual graph makes it obvious for the viewer what is actually meant.
I want to compliment you, you have said it all. I am a little business owner and I really want to expand my business to the next level by making myself an investor but I really don't know how to go about it..
Ms Sonia understanding of market indicators is impressive. She knows exactly when to enter and exit trades for maximum profit. her siignals are top notch
Wealth is built in both bull or bear market and also wealth transfers from the impatient to the patient. One of the best ways to succeed in crypto is by trading your assets with a good strategy..
I'm retired at 47, went from Grass to Grace. This here reminds me of my transformation from a nobody to good home, honest wife, $35k biweekly and a good daughter full of ❤ I’m forever grateful Sonia karen
Love the video! I just have a few questions related to investing that I would love to get your opinion on. Do you have any suggestions regarding dealing with 401ks? Do you suggest combining different 401ks from previous jobs into one account, or transferring into Roth or Roth IRA? Would you have or would you make a video about best ways to invest in regular brokerage account? For example, i personally dealt with cancer and I’m only in my 20s, and it’s likely that I will experience this issue continuously and won’t be able to treat it. Opening a retirement account and constantly only investing into it wouldn’t make sense for me because I’d have to take money out early regardless before I turn 50 even, so I’m just faced with penalties. But when it comes to investing in general everyone just seems to be talking about retirement accounts and nothing else..Thank you!
Loving this format as well as the couples too, already on waitlist for the new book, and waiting to see you live hopefully in Miami. Question: how to calculate how much you will have by retirement. Would love to play around with my own numbers . THANKS ❤
You can search for a compound interest calculator, enter how much you have invested now as the starting point, how much you plan to invest per month (pre-tax and post-tax accounts), enter the average annual return (Ramit recommends 7%), and how many years until you plan to retire (Ramit usually uses age 65). Once you get the ending number, multiply it by 4% (per Ramit's guidelines) to see how much money you can withdraw from your investments as income per year (before taxes).
nice to not see certain dark colored token being advertised or an elderly couple who happens to be in every finance video comments who are VERY worried about the price of gas in the future
For the spending plan #2, it’s interesting that you didn’t mention there’s $0 for debt, but they’re in $35,000 of debt. Did you miss that or was it intentional to not hit on it?
13:30 Yes, let's make a society where teachers aren't payed enough to have a good life, what could go wrong... I'm shure the best of the best will want to dedicate their lifes to the craft...
With the way some finances are throwing some shade to other channels, id love to see an AI version of Caleb, Dave Ramsey, Suze Orman wrestling. Caleb high pitch screaming at Dave and Dave using his mechanical shotgun firing stupid shells
Absolutely! Drives me crazy and makes his “are you on track for retirement” completely worthless. He also needs to have a note for categorizing the debt and assets!
I have a question when you talk about investments what do you mean by that and why kind of investments we can do. As I leave in Pakistan making good amout of money but cannot manage my finances and no saving, no investments. That's rising my blood pressure every day. Thanks
I love Ramit’s videos, as a UK resident I can see a lot of advice that is transferable across the pond, are there any examples of International csp’s as US wages seem really high for fairly average jobs! The one thing that irks me slightly is that mortgage costs are treated the same as rent in the fixed costs section, this is made up of interest and repayment, which is reducing the debt over time and giving the participant’s greater net worth (similarly with debt / loan payments) and making them richer over time. Would love to hear if you have any thoughts on this.
Hi Ramit, I love your content BUT I am based in Ireland where investing is really hard to do and is subject to gigantic tax of 41%, so really I would have to go very high risk to see results like this. Would you have any recommendations on how to grow your wealth in this situation?
In some state if you contribute to a 529 college fund you get a break on your state taxes. So you should take that into consideration before saying don’t put money into a college savings plan.
For the G&N, I absolutely agree on not trying to time the market. If you are in a same situation and let's say you have $50,000 in cash you want to invest... The most important decision is to NOT throw all $50k in one day or even one week. Buy small lots over several months or even a year. That will reduce your risk of market fluctuations and hopefully get you a cost basis that can make sure you stay in the positive long-term. If you are not into real estate, REIT index funds are great options.
I like your content. One thing to consider eliminating is the "typewriter" background audio when you are reading emails from guests. On headphones, it is distracting and hard to understand.
I’m assuming she’s not including child support or her child’s items if there’s shared custody. Even if her child is only with her 50% of the time they still need personal items and food for more than $400 a month.
I genuinelly want to see a breakdown/opinions on having most of your money in investments thats not a property. I come from a country where people hold majority of their net assets in properties, followed by cash savings, THEN investment in stocks etc. So as someone who has 100% as cash savings earning minimum interest rate, I want to hear your opinion on cash saving/investment
The couple doesnt want to buy into the stock market at the wrong time ...So they are considering buying into one of the most inflated housing markets in history
Love this, but curious why you don’t seem to consider Social Security at all for retirement income. Being able to withdraw half current income in retirement might be fine when social security is considered. Yes, benefits could take a haircut, but it's not likely to go to zero.
Excellent question. SS should definitely be considered. I try to mention in every situation -- and I fully believe SS will continue to be funded and be available to retirees -- but it's typically not considered until you get closer to retirement. It can make a difference (especially for low incomes/low savings) but I want people to see how much their investments will produce for them. SS comes on top. I will continue to make sure to mention SS in the future so people know to add it on.
I think the fixed costs on the second review are inaccurate because they used the wrong net. If the net was only net after taxes and they included the pretax 401k in the investments section then the fixed costs would be a lower % and the investments would be higher %.
That's because there's not enough of it. If there were only 5,000 loaves of bread in the world, and they made 100 more, those loaves would be expensive...until they made 5,000 more, than 50,000 more, than 100,000 more. That's how prices come down: with supply
Ramit I love what you do, read your book, and watch most of your YT videos but damn I cannot believe you partner up Fabric who charge a fee just to use their platform. Aren't you the guy who is against paying advisor fees and that's why you recommend target date funds and ETF's in our investments. So how can you recommend using fabric who charges a "small" fee when years from now that small fee can cost thousands/ten of thousands of dollars.
One thing that occurred to me that hardly anyone brings up is the fact that inflation is not taken into account. In the teacher example where she is projected to retire with about $1m. Applying the 4% rule gets her about $40k. This is half of her TODAY’s income. Fast forward 37 years to her retirement, she would conceivably need to earn about $80K x (1.03^37) = $238K. Her $40K withdrawal is a drop in the bucket.
I think that is why they always use 7% returns. Because if you are invested in market tracking ETF's seeing on average 10% returns is somewhat realistic. so the 7% returns accounts for inflation.
But if your getting dule social security (and some people have a pension) that boosts your income during retirement. People live 72 years on average, so I would take out slightly more for retirement every year if they have over a million. That would get them closer to their current income. I also think they might have closer to 2 mil if they keep going this way.
I still dont understand how Ranit recommends 10% for investing, starting at 30y/o, investing 10% will only replace 70% of your income... Cuz he sure implied that wasnt enought for this Detroit couple.
Yay, finally evaluated a single person
She talked about getting married. To me, that's where her house could be a reality. Instead of a $400,000 house she can't afford in a $580,000 market, on two incomes now an actual $580,000 house is in reach. The trick is to put practicality over what you want. Don't get a house you shouldn't, and don't get married just because you want a house.
I like that his channel is geared toward couples, but certainly don’t mind the occasional single audit
He's done a single person in another of the Thursday videos. Also if you subscribe to his newsletter you will see more single people.
More single evaluations please!!
@TonyCox1351 I agree but I wish there was more average incomes and not the "American average"
Ramit, this is your best format of content. Amazing.
It’s my favorite
I agree with this, easily the most informative and interesting
Less ranting 😂
I agree 100%
1000%
i cannot tell you how much i look forward to these videos
I’m just
Even though you say basically the same thing every video, I love watching every single one of them
Man… that single mom. I appreciate and respect her having goals. But the realistic expectations and execution?? Good lord.
Yeah that's what I was thinking. Overall she is doing well but those goals are going to be very very hard unfortunately
I LOVE this format, and agree with comments requesting a line item on CSP for pre-tax retirement situation (just because context would be so helpful in understanding the full picture).
ISTG this series is so addictive. just got to know this channel a few days back and am now unable to stop binge-watching this.
I watch all your videos and love this format the most. Really appreciate all the work you do.
Just chiming in to say that these videos are my favorite!
I’ve never found other financial influencers helpful, I mean they were, but I knew in my gut that their tips weren’t their best. Yours are actively engaging and realistic. And doable without real practicality for a diverse range of average ppl. Thank you.
This was brilliant. I'm in the UK and sometimes the figures being discussed are wildly unachievable in my context. But these were all realistic and I took something from each of them.
Seriously that is so true!! UK salaries are pathetic..
29:45 The Dave Ramsey shade is much appreciated.
😂😂😂😂😂 spot on.
I like this series on your channel a lot. Keep up the great work!
The single mom actually sounds like a divorced mom. It's very different raising a child with no support from the father vs being divorced and getting child support and equal custody. Its no wonder she can travel when there is a whole other parents involved.
Solo parenting vs Single Parenting. I get what you’re saying.
Likely her food and other items are so low because she splits them with the child’s father or doesn’t include child support in her household money (she’s only counting her food and personal items etc).
If she shares custody she has minimal childcare costs when she travels.
Junk drawer is universal. I feel a little better knowing that on an income of 22k gross annually i have similar figures to somebody older who is on 70k.
Hey Ramit -- Why don't you add a question for them to provide their pre-tax retirement contribution amount per month? I bet it would make the assumptions and advice so much more solid. (This is coming from one of those binge-watching money nerds/fans!)
its going to happen
Love this video, Ramit! Huge public school fan here as well. Don't have to send my child to a public school but I choose to! Not into Silicon Valley private school culture down here in Los Gatos, just personally. Stay at home mom here about your age... a little older. Silicon Valley. Worked in the corporate world for a long time but now get to devote a ton of my time to volunteer work in our local public elementary school and I am LOVING it. Thanks for the props for public schools here in your video :)
This is the best type of content!!
i love this channel. Its really a cool insight to see how others are doing and sort of contrast with how my own family is doing. It seems so taboo to talk about money and finances with friends and family.
Great to see a single person review. I'm not sure that assuming she would buy the median home as her first home is a good assumption. First homes are usually smaller and more affordable to build up equity. I agree that maybe a house isn't the best idea for her
6:36 I never thought about it like that. I am low income due to disability and the vulnerability of a lower # in emergency savings makes lots of sense even though percentage-wise it seems like it’s enough but it actually isn’t. Thanks for this insight.
I'm in a similar situation to you - income extremely low due to disability. I hadn't thought about what Ramit said in those specific words, but something I've noticed is how incredibly anxious I always feel about money even though I have a good emergency fund. I've figured out that the feeling is due to housing insecurity - if my landlord ever evicts me I don't have a high enough income to get another rental due to the housing crisis in my country blasting rental prices into the stratosphere (even in tiny rural villages), and my emergency fund is not enough money to purchase a house/unit/apartment/whatever, so I will be homeless.
It's very upsetting that despite being in the best financial position that I have ever been in, I'm still one arbitrary decision by my landlord away from complete destitution.
For #1, the only problem with getting a higher paying job is that you'll need to work all 12 months of the year and maybe get 2 weeks for vacation. Doesn't leave much time for traveling.
It's Temporary. You Will Either Earn A Better Position That Will Give You More Vacation Time OR You Will Save And Invest Your Money Probably Which Will Allow You To Retire Early OR Switch To Working Part-Time And Be Semi-Retired , Which Will Allow You To Have More Vacation.
This obsession with travel is crushing people.
Seriously. Travel is fun but holy shit it’s expensive. Especially if you’re talking about intercontinental travel.
True. I also feel like you get a lot of slack when you overspend on travelling versus on housing, cars or other stuff.
It depends on how and where you travel. I often spend much less when traveling. If I began renting out my home while traveling I would break even or make money. I have never regretted any of my travels. I don’t do debt except for mortgage.
For me the obsession of travel is there because it’s nice to see the world but also it’s actually achievable to go on a trip rather than buying a house. Plus a vacation is not a monthly expense where as housing is
go to LatAm and stay in hostels. More fun and more affordable than overpriced hotels in overrated western europe destinations 👍
To get a wider stance maybe Casey the single mother could rethink and save her $6k monthly income amount instead of just her $2.3k monthly expenses? If I was her I’d focus on working to get rid of those debts ASAP.
I’m surprised that a single mother with debt and a child would think she could afford to travel. We cut all vacations and eating out while we had consumer debt.
She is already traveling and saving.
@@paulinenjeru5980yeah that’s exactly the problem
She sounds like she is creating a joyous life.
@@CherieButler Really??? She’s in debt and she has a child to raise.
@@paulinenjeru5980 She's undersaving by quite a lot - for emergencies and her own retirement.
At @30:39 @Ramit did the math wrong. He is only adding the after tax money ($410) but I’m pretty sure this couple is maxing out 401k pre tax plus a match that is likely around an additional $2.5k a month. So they will have $3.3M in 25 years and can withdraw >$120k a year.
yep, i did some math myself and they're investing over $30K in retirement each year. They *could* reduce pre-tax investments by $1K / mo and still be well on track to withdraw more than their current salary ($108K) in retirement. That $1K should go towards building up their EF massively before being applied to travel, though, and in the future all of their salary increases should go towards maxing out their retirement again.
I think you're right. how do you even account for pre-tax investing on the CSP? do you just subtract from the Gross income? and then Roth IRA which is not deffered would go in "investments"? Very convoluted to see the total monthly investments.
Yeah CSP needs to be updated to include pre tax retirement which is how most people invest
This is what I struggle with on the CSP too! Like okay yes it looks like I'm only contributing a tiny percent to my Roth IRA. But it doesn't factor in the 10% that's coming out already and getting 50% matched in 401k before it ever hits my bank account
@@camille744investments is for both pre and post tax. You know how much your company takes out of your paycheque to put in your 401k, so just add that
I appreciate Ramit's content, but I have a couple of questions. First, when reviewing investments, I’ve noticed Social Security income isn’t included, even though it can replace up to 64% of earnings. Is he assuming Social Security won’t be available in the future? Second, when assessing home affordability, why does he use the median home price instead of considering a person's current income? There’s often a lot of inventory available below the median price.
Love this, being realistic and running some basic numbers that get you 80% of the way to accurate could be life changing. Questioning whether you realisticaly want to sacrifice almost everything just to own a small, single house in a single location which is barely an investment is SO important in my opinion. Even worse here in New Zealand, people seem to trip and fall into a house purchase and will basically bid whatever their bank told them they could maximally borrow.
I like this a lot, in addition to that if you want to simplify your financial life keep debt to a minimum. Cut expenses. Develop healthy habits like consistently saving money at regular intervals for investments to help you build wealth. If you work on this, your financial potential will grow exponentially. There are numerous opportunities to make money on the financial market. With the assistance of my financial advisor Abigail Ann Ryan , I was able to earn my first million dollars through passive investment in a variety of assets and right now my friend is on his way to a million too with her help. Goodluck!
Truly these are the best investment decision you can make both short term and long term for steady money flow. Kudos
recently started saving for retirement and I don't mind investing a substantial sum, i'd like to know your advisor ?
Look her up, she’s not hard to find.
The thoughts and ideas here are remarkable
Looks like she really knows her stuff. I also found her online page and read through her resume, educational background, qualifications and it was really impressive.
Single woman in the first one. I get her ambition for travel and wanting a place to call home. But she doesnt make enough to afford both on her single income. She either sticks to the travel life while renting, or gives up the travel life to focus on being a homeowner. The only way she can do both would be if her income doubled from what it is now.
Wow out here in Seattle a lot of HOA fees are more than that Michigan mortgage payment!
Love these videos, I've learned a lot from them, even seeing people with quite higher income than mine, being rich is definitely not about numbers but a mindset!
I love this format. Also very educational learning from various situations. Thank you!
My opinion:
No, to the house for now, especially since there is no down payment saved. She needs to save enough in case her landlord sells the house though.
Pay off student loan and raise the emergency fund to 1 year of expenses.
People need to understand the power of compound interest
Ramit, why did you completely ignore that the second couple is likely maxing out their 401k when you projected their retirement savings? I am confused why cutting that pre-tax savings rate was not considered. Assume your team missed this. Avid watcher, excellent content overall. Thank you
We had 3 junk drawers. I emptied and cleaned out 1 so for the last several months we’ve had 2 junk drawers and 1 empty drawer 😂. I don’t know what to do with the drawer space now! It’s been junk for 4 years! This is an analogy for my CSP. I need to send it in…
I’m 26, I have no debt, putting $1,200 in retirement a month, make $130k a year, but no house yet. I still feel guilty buying things I want. What is wrong with me? Feel like I’m doing everything right though.
This is just my 2 cents, but do you know exactly what you want to do with your money? If you make short term (yearly), long-term (5-10 years), and lifetime (retirement era) goals you can figure out what you need to get there- money-wise, mental health wise, relationships to establish, etc. Knowing this and having a plan with the right people in your circle to help you grow will probably make you feel more stable.
Talk to a therapist in case there’s something deep rooted making you feel guilty for spending your own money.
My guess? You might come from a family of extremely frugal people, probably you observed some financial strain on the family as a kid, and internalized the tension that came along with "unecessary" or unexpected expenses. It's hard to shed, but it really helped me to reflect on my long term goals, then set monthly targets for investing and saving- transfers executed the day I'm paid- and any excess is mine to spend as I want. It's harder to feel guilty when you're working toward a goal and you know you're doing a good job with money management. Basically, following Ramit's advice is very helpful lol
I love these videos so much, thanks Ramit, please keep them coming!
CSP3: high yield investments are really a way you can go, but:
1) There might be more risk involved then you realise
2) They're probably not going to grow as fast, making Ramit's general 7%/year growth calculation unfeasible.
The junk drawer expands to all types of people 😂
Yeah.... the drawer problem... I believe it's the world's plague. I have one myself (mid-east Europe), I've seen one at my sister's house in England and even my auntie in Rome, Italy. Thank you for all the clues you give to people - it is always good to listen to you 😎
I love this format thank you for sharing
Yes this format is his best one
I was a teacher for 10 years.. took a calculated risk to get a masters degree for 25k and was able to pivot to a new career that doubled my salary. (Teachers with 10 years of experience in my area in Florida are making 47k)
Why do we look focus on gross monthly income instead of net?
He did it twice. In retirement your total income can come down by 30% cuz you no longer have to save for retirement. Going from 108k down to $75,000 is perfectly fine
At 5:03 that's actually an increase of one percentage POINT not an increase of one percent. When I first heard the suggestion in another video, I wasn't sure whether you were talking about the amount or the percentage point. Even though the term used in the video is incorrect, the visual graph makes it obvious for the viewer what is actually meant.
Waking up every 14th of each month to $210,000 it’s a blessing to I and my family… Big gratitude
I want to compliment you, you have said it all. I am a little business owner and I really want to expand my business to the next level by making myself an investor but I really don't know how to go about it..
Ms Sonia understanding of market indicators is impressive. She knows exactly when to enter and exit trades for maximum profit. her siignals are top notch
Wealth is built in both bull or bear market and also wealth transfers from the impatient to the patient. One of the best ways to succeed in crypto is by trading your assets with a good strategy..
I'm retired at 47, went from Grass to Grace. This here reminds me of my transformation from a nobody to good home, honest wife, $35k biweekly and a good daughter full of ❤ I’m forever grateful Sonia karen
Best signal provider in the market.
Knowledgeable, level headed (no loss like some other traders who recently jumped on the bandwagon).
I desperately need Ramit to review my CSP 😊
Subscribed. I’ve watched too many of these over the last few days to not have.
Love the video! I just have a few questions related to investing that I would love to get your opinion on. Do you have any suggestions regarding dealing with 401ks? Do you suggest combining different 401ks from previous jobs into one account, or transferring into Roth or Roth IRA? Would you have or would you make a video about best ways to invest in regular brokerage account? For example, i personally dealt with cancer and I’m only in my 20s, and it’s likely that I will experience this issue continuously and won’t be able to treat it. Opening a retirement account and constantly only investing into it wouldn’t make sense for me because I’d have to take money out early regardless before I turn 50 even, so I’m just faced with penalties. But when it comes to investing in general everyone just seems to be talking about retirement accounts and nothing else..Thank you!
Love this style and content. Great stuff. Junk drawer is universal brother.
Loving this format as well as the couples too, already on waitlist for the new book, and waiting to see you live hopefully in Miami. Question: how to calculate how much you will have by retirement. Would love to play around with my own numbers . THANKS ❤
You can search for a compound interest calculator, enter how much you have invested now as the starting point, how much you plan to invest per month (pre-tax and post-tax accounts), enter the average annual return (Ramit recommends 7%), and how many years until you plan to retire (Ramit usually uses age 65). Once you get the ending number, multiply it by 4% (per Ramit's guidelines) to see how much money you can withdraw from your investments as income per year (before taxes).
Use a compound interest calculator, there are many available online.
Then play with variables (rate of return, monthly/annual contributions, etc).
This has been very insightful
Even small side gigs can help you reach your goals faster without sacrificing your current lifestyle.
For the first one finally a normal person who don’t make 500k plus
These are my favorite videos!
I like how your comments aren't filled with bots
nice to not see certain dark colored token being advertised or an elderly couple who happens to be in every finance video comments who are VERY worried about the price of gas in the future
@@sarahallen8739 Or that someone has $300k+ in liquid and does not know where to put all their cash. Then someone pops up and says to use their FA
For the spending plan #2, it’s interesting that you didn’t mention there’s $0 for debt, but they’re in $35,000 of debt. Did you miss that or was it intentional to not hit on it?
I think it is the mortgage because they said they were almost done paying it off
13:30 Yes, let's make a society where teachers aren't payed enough to have a good life, what could go wrong... I'm shure the best of the best will want to dedicate their lifes to the craft...
With the way some finances are throwing some shade to other channels, id love to see an AI version of Caleb, Dave Ramsey, Suze Orman wrestling. Caleb high pitch screaming at Dave and Dave using his mechanical shotgun firing stupid shells
This template needs to include info on how much pre-net is being invited into 420k/hsa
Absolutely! Drives me crazy and makes his “are you on track for retirement” completely worthless.
He also needs to have a note for categorizing the debt and assets!
I can relate to this one!
Hey Ramit, do you look at people from outside the US?
I know he’s done couples from Canada.
The first one is a regular person. The second and third are among the immortal top 5 percent.
The junk drawer is universal Ramit😂
I have a question when you talk about investments what do you mean by that and why kind of investments we can do. As I leave in Pakistan making good amout of money but cannot manage my finances and no saving, no investments. That's rising my blood pressure every day. Thanks
Loved this video!!!
Love the shot at Dave Ramsey
I love Ramit’s videos, as a UK resident I can see a lot of advice that is transferable across the pond, are there any examples of International csp’s as US wages seem really high for fairly average jobs! The one thing that irks me slightly is that mortgage costs are treated the same as rent in the fixed costs section, this is made up of interest and repayment, which is reducing the debt over time and giving the participant’s greater net worth (similarly with debt / loan payments) and making them richer over time. Would love to hear if you have any thoughts on this.
Hi Ramit, I love your content BUT I am based in Ireland where investing is really hard to do and is subject to gigantic tax of 41%, so really I would have to go very high risk to see results like this. Would you have any recommendations on how to grow your wealth in this situation?
In some state if you contribute to a 529 college fund you get a break on your state taxes. So you should take that into consideration before saying don’t put money into a college savings plan.
😂😂😂😂😂 CSP #3 When Ramit says "Where did I get that number??? I don't know! Fix your shit!!" 🤣🤣🤣🤣🤣🤣
Holy cow.
I. DIED.
For the G&N, I absolutely agree on not trying to time the market. If you are in a same situation and let's say you have $50,000 in cash you want to invest... The most important decision is to NOT throw all $50k in one day or even one week. Buy small lots over several months or even a year. That will reduce your risk of market fluctuations and hopefully get you a cost basis that can make sure you stay in the positive long-term. If you are not into real estate, REIT index funds are great options.
I think the junk drawer is a universal phenomenon hahaha right down to the oven mits thrown on top 😂
According to the chart, this is excellent.
Ramit the thumbnail for this video shows a BOA account and rent for somebody at $26,930 which is kinda wild lol
I like your content. One thing to consider eliminating is the "typewriter" background audio when you are reading emails from guests. On headphones, it is distracting and hard to understand.
Please do more of these videos!
CSP #1 is weird. Is there child support or a roommate not mentioned? The numbers just don’t make sense
I’m assuming she’s not including child support or her child’s items if there’s shared custody. Even if her child is only with her 50% of the time they still need personal items and food for more than $400 a month.
I think it would be helpful if the participants listed how they spend their guilt free spending
I genuinelly want to see a breakdown/opinions on having most of your money in investments thats not a property. I come from a country where people hold majority of their net assets in properties, followed by cash savings, THEN investment in stocks etc. So as someone who has 100% as cash savings earning minimum interest rate, I want to hear your opinion on cash saving/investment
Cash = emergency fund + money you think you will need in the next 5 years.
The rest should be in the market so it can grow.
The couple doesnt want to buy into the stock market at the wrong time
...So they are considering buying into one of the most inflated housing markets in history
Love this, but curious why you don’t seem to consider Social Security at all for retirement income. Being able to withdraw half current income in retirement might be fine when social security is considered. Yes, benefits could take a haircut, but it's not likely to go to zero.
Excellent question. SS should definitely be considered. I try to mention in every situation -- and I fully believe SS will continue to be funded and be available to retirees -- but it's typically not considered until you get closer to retirement. It can make a difference (especially for low incomes/low savings) but I want people to see how much their investments will produce for them. SS comes on top. I will continue to make sure to mention SS in the future so people know to add it on.
@@ramitsethi Thanks!
Middle of video shade thrown towards a certain Dave XD
Love these
I think the fixed costs on the second review are inaccurate because they used the wrong net. If the net was only net after taxes and they included the pretax 401k in the investments section then the fixed costs would be a lower % and the investments would be higher %.
Will we be getting a new netflix show any time soon 👀
Sure hope so.
I am all for building more housing, but in my area, the new housing is NOT affordable for the average person.
That's because there's not enough of it. If there were only 5,000 loaves of bread in the world, and they made 100 more, those loaves would be expensive...until they made 5,000 more, than 50,000 more, than 100,000 more. That's how prices come down: with supply
@@ramitsethi good point. I just wish they didn't start out these housing developments or apartment complexes at 350K-400K.
Why do you think they start the pricing there? (There's a reason. It's not just "greed.")
@@ramitsethi no idea. I know it is not what folks in the area can afford, though, based on conversations.
Try to reason it out. It's important
72,000 usd a year, but that income won't buy a house. Wow.
I bought a house making 65k in Dallas as a single mom. she can try to buy a house with one of her parents or move to a cheaper city
Ramit I love what you do, read your book, and watch most of your YT videos but damn I cannot believe you partner up Fabric who charge a fee just to use their platform. Aren't you the guy who is against paying advisor fees and that's why you recommend target date funds and ETF's in our investments. So how can you recommend using fabric who charges a "small" fee when years from now that small fee can cost thousands/ten of thousands of dollars.
See you in DC bro!
One thing that occurred to me that hardly anyone brings up is the fact that inflation is not taken into account.
In the teacher example where she is projected to retire with about $1m. Applying the 4% rule gets her about $40k. This is half of her TODAY’s income. Fast forward 37 years to her retirement, she would conceivably need to earn about $80K x (1.03^37) = $238K. Her $40K withdrawal is a drop in the bucket.
What if....inflation is already taken into account
I think that is why they always use 7% returns. Because if you are invested in market tracking ETF's seeing on average 10% returns is somewhat realistic. so the 7% returns accounts for inflation.
37:30 ramit still pissed AND the edit. so cold lol
The Michigan couple had to have inherited a house and that is their property tax.
I have A pension and a 457b. Just opened a Roth IRA. Should I open a taxable brokerage too?
But if your getting dule social security (and some people have a pension) that boosts your income during retirement. People live 72 years on average, so I would take out slightly more for retirement every year if they have over a million. That would get them closer to their current income. I also think they might have closer to 2 mil if they keep going this way.
I still dont understand how Ranit recommends 10% for investing, starting at 30y/o, investing 10% will only replace 70% of your income... Cuz he sure implied that wasnt enought for this Detroit couple.
How does someone add a pension to the CSP?
Doesn't apply to the CSP. When calculating what you need for retirement, use the pension to decrease how much your nest egg needs to cover.
@@arh1234 thanks!
The junk drawer is universal but not the $2k miscellaneous budget lol!