Do you ever add up what you should have by retirement and almost find it hard to believe? I came from an average middle class american family, and by the time I retire and the rate I save and have been building my businesses I should have on the low side, mid 8 figures, even factoring in inflation that will be a good size chunk of change. I would like nothing more then a 997 right now, I absolutely love them and I had the chance to drive one a few weeks ago and was even more impressed. I could afford that now, but it would mean minimal saving for retirement, but then I think of what I will have and what it will allow me to do in the future and then I am happy with my TSX.

This came to my mind because of the $5000 thread, that much money invested at age 20 is almost a half million dollars at age 60, making 12% annually. That same $5k invested at 18 is 1.031 million at age 65. I started saving at 17 and got serious by 18 and am almost taken back by how much it will be as I age.

Anyone else in a similar situation? To those younger members here, if you want a lot of money as you age, live with in your means(drive a cheaper car then you can afford) and start saving now!

 

If I dare speak for most of us on this forum, who amongst us wouldn't love to park an F430 in our garage? But since most of us probably haven't won the gene pool lotto ala Paris Hilton ( ), we'll probably have to earn our riches the hard way.

Unless you plan on living with the 'rents indefintely, you can purchase and drive a cool car at a young age. Otherwise, planning and saving is the long route to wealth building.

Scrib and NSXNEXT have pretty good advice on this subject, I'd stick closely to their advice.

 

12% annually from what investments?

 

Unfortunately, most young adults don't understand the time value of money.

I won't lie... My wife and I have it pretty good. But we're not bringing in the bucks people may think. Yes, we both work. And no kids (yet). But we have no debt (outside the mortgage). We max out the IRAs and 401ks. And still manage to head out to dinner, splurge on a weekend shopping.

How?

I think it simply comes down to having a budget and sticking to it. It kills me to see people going with variable-rate mortgages, or a 60-month car loan with nothing down. Live within your means and have fun with what you can afford, not with what you can go into debt with.

 

I plan, but not too far in advance. If everything goes to plan Ill be making 500% more salary but have a student loan comparable to my mortgage.

Then again, I may not.

For sure, I do try to move towards a general financial goal, which people should have at the least.

 

PRW out of Braintree MA. He got the 12% from my thread. It was 8-12% per year on average...

 

For the past 2 years I have been working full time and I save a minimum of half of my monthly income no matter what. Put it straight into my ING then i transfer it from ING to PRW where the majority of my money is. Figure that was a good plan why I am young. Still have fun and still save up plenty of money when compared to other guys my age. I love all the suggestions though. Learning alot reading round through threads, getting good ideas about what to do with my money. Thanks..

 

Let's see you average 12% over the entire lifetime of your investment!

Seriously though, I plan for retirement by assuming a very pessimistic 6% gain for my company matched 401k. I averaged above 14% last year, but the markets always has it's ups and downs.

Regardless, I still max out my 401k at 16% pre tax income and I am an extreme saver (cheap).

 

I could produce a laundry list of funds that over there lifetime average 12% in annual returns - search Vanguard and American Funds - hell the S&P500 is probably 10-11% with a few pretty bad years recently(someone correct me if I am wrong, I don't have the time to look up exactly what it is right now).

 

Never said id average 12% over a lifetime. Just said thats what I have averaged past 5 years

 

The Vanguard Energy Fund requires a min. investment of $25k.
I'm looking at the American Funds right now. What do you guys recommend for someone who wants to invest about $6000 for 10 years? Here's the list:
https://www.americanfunds.com/funds/...abetically.htm

 

At your age, its safe to say that you will average that by retirement. 6% is like buying a fucking CD, your beating inflation by 2-3%, its going to take a LONG time for that to make any difference.

Also as you build wealth you have access to higher return funds that require huge minimum initial deposits to purchase - in that realm 20% is not uncommon to average, long term.

 

I am heavy with Capital World Growth and Income, The Growth Fund of America and in the last few years they have put me heavy with Europacific(previously they were only investing 10% into that) - I also am invested with Fundamental Investor's, New Perspective and New World.

If you think Vanguard is bad with there minimum's, Russell investment requires 7 figure deposits to get in to there really good funds - but then you are investing with the BEST.

 

I wouldn't count on 12%

While the S&P 500 Index fund has a 12% fund lifetime performance the last 10 years have only averaged 8.8%. YTD is currently 3.25. Not many of the other Index funds are doing much better.

Whenever I run number I put in 8% and hope to hit it.

 

Might as well scoop up some sirius radio 3.80 per share.. take the shot...if sirius and xm merge it could be big...

 

I couldn't agree with you more. I'm a big fan of the saying, 'Do the big things right, and you won't have to worry about the little things.' or another variation on the saying 'Don't be pennywise and pound foolish'.

The basics of savings and investing really isn't rocket science, more than anything it involves discipline in balancing future wants with current needs and vice versa.

I always bought used cars and resisted the temptation to buy a brand new car until I could pay cash. Tell you what, it's very gratifying to write a check for a car. Salespeople give you a funny look like you're almost crazy -- What you mean you don't need financing?

 

The easiest advice for long-term retirement is:

1) If you have a matching 401K program at work, invest to take advantage of the maximum match
2) Open a Roth IRA - even if you only put $20 a month in it.

Find a certified financial planner that you trust and stay close to them.