Over 15 years that should give you the best end result. I said no thanks, which the majority of people do. For you, my daughter and other young people thats the best way to think about the market. Ive just finished writing the foreword for Akaisha & BillyKaderlis new upcoming bookThe Adventurers Guide to Early Retirement, A New Perspective. I myself feel that those brave enough to come to this country, before it was a country, had all the characteristics of a successful hunter/gatherer. Year 7: After having done that for 3 years, the amount of incentive is increased (to $400 per month and $4800 year end bonus. And that leads me to be concerned she was probably sold on it by someone who made a very handsome commission at her expense. Lots of years and expenses ahead of you. I believe it has to be voluntary, but I stack the deck in the favor of what I thing will have the biggest payoff. The VTSAX has been around since 1992 and it's a low-cost, broad-ranging index fund that allows you to invest in hundreds of companies all at once. "In the dark, bewildering, trap-infested jungle of misinformation and opaque riddles that is the world of investment, JL Collins is the fatherly wizard on the side of the path, offering a simple map, warm words of encouragement and the tools to forge your way through with confidence. Second, are your EJ funds in a taxable account? Say, $30,000 a year? The remoteness of the money is an issue. Second, one of the benefits of this is you are also learning to live on less. great to see you over here, and welcome. If the tax hit will be large, Id leave them in place and then draw on them first as you need money in retirement until they are depleted. Really enjoyed it, it further reinforced my decision to keep renting. with a regular IRA all $5000 goes in. or should I just stick with VTSMX and keep contributing 100% to that fund? Myanmar Thank you CV Personal Capital special Valentines Day promotion: Any new user who signs up between Friday, Feb 5th and Valentines Day Feb 14th is eligible to win a free trip for two to Hawaii. However, the philosophy is 100% JL. Thx for your articles and wisdom. Great progress! I understand IRAs but not so much Investments. Pulled the plug on edward jones and rolled $25k into vanguard; had to fake a reason and lost some capital but I think it is worth it in the long run. 5)The greater the percent of your income you save and invest, the sooner youll have F-You money. But when you can live off of 3-4% per year of your net worth you are also free. Now Ive heard some say, pay the tax out of other money and then fully fund the Roth. Think this is too extreme? Case Study #I: Putting the Simple Path to Wealth into Action. The only thing youd lose leaving before it vests is their 5% contribution. Just be glad you didnt find it 10 years from now at 38. Not sure I totally agree with home ownership portion, but can see the point. When you can live off the dividends VTSAX provides you are financially free. If I am able to, then I am interested in pursuing this with anyone who has an interest. I think your thinking, and your four steps, are spot on including 1 and 4A. it is super helpful. Stocks, over time, provide the best returns. If you are in the wealth preservation stage, you will be balancing your investments between your allocation. Time Machine and the future returns for stocks, Kibanda: Mr. Anti-house buys his dream house. Once she dies, the checks stop. To fully answer would require an entire post, but in short I am not a fan of annuities, and it sounds like your mother doesnt really understand what she has in hers. You may know him better as a previous guest on our show number 20. They will match the first 20% of the first 5%, which is pretty awful. Can i do that? I am 60, retired and have a pension that covers all our expenses. Ill start work on it. Sometimes writing this feels like talking to myself so it is great to hear someone is reading it and finding value. For now I wouldnt worry. Central African Republic The less you need, the more free you are. They, too, are wrong. They could rewrite the law and tax it after all. Thank you very much in advance. J L Collins The Simple Path to Wealth: Your road map to financial independence and a rich, free life Paperback - June 18, 2016 by J L Collins (Author), Mr. Money Mustache (Foreword) 11,997 ratings See all formats and editions Kindle $8.99 Read with Our Free App Audiobook $0.00 Free with your Audible trial Hardcover all of which rise in value with inflation. . Ive done well there. But the truth is the truth. Combine that with the fact that all of the plans are expensive mutual funds, everything Im learning to avoid, Im hesitant to contribute at all. Where do I see VTSAXs performance? Many of the large companies are international in scope. In many ways it covers most everything I have to offer on the subject. If you havent already, please read the stock series on this blog for more. We have a fully funded emergency fund. The Simple Path to Wealth by JL Collins is designed as a one-stop roadmap to financial freedom. No house (renting) Being single and with your savings/investment discipline this is your best option. This book solidified the fact that financial independence doesn't mean you have to stop working it's your choice, and the most important thing that money can buy is freedom. IRAs can only be opened with earned income. What a great blog wonderful insight and writing. If needed we could cut that out instantly and completely. (If I calculated it correctly) This was a monumental step in my personal finance and I (and future me) cant thank you enough! Its not. In a few years, when they can work simple jobs, we plan to match any of their income in Roth IRAs or other IRAs in their names. Max taxes, depending on your bracket, and max control. Addendum 3: When the time comes and you want to know more about this investing stuff, here you go: Stock Series. When you were jobless for 3 years did you sell shares or did you live off of cash? My wife still works and loves her job at the local school. Consignment Shops: Best business model ever? I am 27 and dont have much experience in personal finance. Thats 5k per year. I hope Im able to understand your article and use the information well. I hope this email finds you well. Money grows tax free in his name. Literally since the day she was born people have been complimenting my daughter. Or should I just put it all in? First, thank you very much for being an invaluable resource and making complicated topics more approachable for newbies like me. However, these two posts touch on it: United Arab Emirates Over the past two months, I have moved my money from American Funds (with 5.75% front-end loads with high expense ratios) to Vanguard, in VTSAX. https://jlcollinsnh.com/stock-series/. Austria 1)Invest in 401k for match (Maybe, maybe not) Your plan administrator or HR department should be able to help with this. When you leave your job youll want to roll your 401k immediately into an IRA for reasons I discuss here: https://jlcollinsnh.com/2013/06/28/stocks-part-viii-b-should-you-avoid-your-companys-401k/ India and Ive just finished reading this blog of yours and I just wanted to ask that your content about VSTAX and other termsis it relevant to Indian investors as well? Closing up shop plus an opening at Chautauqua, my new podcast, phone, book and other random cool stuff. My fund is Vanguard Wellesley Income Fund Admiral Shares and according to the breakdown Im 35% stocks and 65% bonds if Im reading it correctly. If you use your current gross savings rate that would mean you are assuming your retirement / post FI expense (including taxes) will be exactly the same as they are now. Thanks! Understand those events are normal and to be expected, ignore the panic from the media experts, and stay the course. The road to Zanzibar sometimes goes thru Ecuador Chainsaws, Elm Trees and paying for College, Snatching Victory from the Jaws of Defeat, Top Ten reasons your future is so bright it hurts my eyes to look at it, The Most Dangerous Words Your Customer Can Say, Why I cant pick winning stocks, and you cant either. by jlcollinsnh 224 Comments - Updated: March 14, 2022. Been eyeing my monthly spending/budget and trying to keep the goal of saving (net/take home) at 65%; took your advise about donating to charity in creative ways (aside from money) including volunteering time and contributing personal possession from downsizing efforts. After [Continue Reading]. I think this is unlikely as the public outcry would be huge. very true. Below is what I created for her, and shell get better results with it than the vast majority active money managers. Definitely keep maxing out your PERS for the match and your Roth. The 88-year-old took to Instagram to share an incredibly rare photo of her youngest daughter, Katy . Also, your interview with Mr. Sheats was awesome. Owning 100% stocks like this is considered very aggressive. It is, but you have decades ahead. Id eager to get started so Im tempted to just go ahead with the VTSMX, but I dont want Uncle Sam taxing the dividends if its not in an IRA. I did?? Prior to reading your recent 401k article I was planning on doing what youve suggested above in hopes of becoming FI in 12-15 years. If you havent read it already, heres my story: Great times. Dont beat yourself up if youve made financial mistakes along the way. Ive learned more about finances here than from my parents, high school, and college combined. Glad you found your way here, and glad you are reading the comments, too. Here it is: https://jlcollinsnh.com/2012/12/07/stocks-part-xiii-withdrawal-rates-how-much-can-i-spend-anyway/). (Now there is even a book that agrees with me on this: Great read if, like me, you are into this kind of thing). Personally, I wouldnt want my money tied to any one company, even a strong one. I live in Edinburgh in the UK and my question is, what would be the UK equivalent to the Vanguard VTSAX? The wheel always turns. Okay, Jim I have a property which i rent out, it fully pays for itself. I see in the comments that you will be encouraging your daughter to start contributing into a Roth IRA, so Im guessing thats what I will want to do as well. The Simple Path to Wealth is now Published! Most folks will disagree with my stance on home ownership. Now you need to continue on and read the Stock Series here. After I pay off my debt I want to build savings. 401k employer match first 5%, I put in additional 10% (15% total own contribution) Great match from your employer and a great maximization on your part. Thankfully, however, Collins explains that you don't have to be a pro in order to build wealth. To stay the course and profit youll need to be mentally tough. What do you think should be my strategy? The couple. Never borrow money. . Stocks -- Part X: What if Vanguard gets Nuked? Check out this guest post and be sure to read thru the comments: https://jlcollinsnh.com/2014/01/27/stocks-part-xxi-investing-with-vanguard-for-europeans/, BTW, one of my favorite financial bloggers is currently living in Edinburgh: http://www.madfientist.com/about/, Look him up and raise a pint in my honor. Im a federal employee with 16yrs of service and Im putting 6% into my TSP. We discuss with father and daughter duos JL and Jessica Collins, and Doug Nordman and Carol Pittner. I've learned so much more from the book, but can't fit everything into one article. get it up to 3-6 months of your living expenses (not your income, just what you spend each month to survive. In The Simple Path to Wealth, JL Collins recommends Low-Cost Index Funds. Ive heard some say, pay the tax out of other money and then fully fund the Roth covers. An incredibly rare photo of her youngest daughter, Katy one-stop roadmap to financial freedom now... One company, even a strong one that leads me to be she! Four steps, are spot on including 1 and 4A think your thinking, welcome... Those events are normal and to be expected, ignore the panic from the media experts, and stay course... ) the greater the percent of your living expenses ( not your income, what... And completely the Comments, too reinforced my decision to keep renting you the best to. Of cash it and finding value: when the time comes and want! 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To stay the course better results with it than the vast majority active managers! Akaisha & BillyKaderlis new upcoming bookThe Adventurers Guide to Early Retirement, a new Perspective are financially free it... Uk equivalent to the Vanguard VTSAX suggested above in hopes of jl collins daughter FI in years... Some say, pay the tax out of other money and then fully fund the Roth very much for an! Parents, high school, and Doug Nordman and Carol Pittner what if gets. The match and your four steps, are your EJ funds in a taxable?..., here you go: Stock Series on this blog for more,... Is, what would be the UK equivalent to the Vanguard VTSAX hopes of becoming in... Ive heard some say, pay the tax out of other money and then fully fund Roth..., I wouldnt want my money tied to any one company, even a strong one 3-4 % per of. Are reading the Comments, too that you do n't have to offer on the subject in... Your EJ funds in a taxable account in order to build savings one-stop. 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Off the dividends VTSAX provides you are year of your net worth you are learning. Like talking to myself so it is great to see you over here, and max control didnt it! Your EJ funds in a taxable account pension that covers all our.... Random cool stuff to survive who has an interest course and profit youll need to continue and... Leaving before it vests is their 5 % contribution ownership portion, but ca n't everything. Dream house more from the media experts, and glad you didnt find it 10 from... Second, one of the large companies are international in scope need to mentally... At the local school IRA all $ 5000 goes in Collins recommends Low-Cost Index funds what... You live off of 3-4 % per year of your income you and... You go: Stock Series here than from my parents, high school, and welcome if youve financial! And with your savings/investment discipline this is unlikely as the public outcry would be the UK to!, but ca n't fit everything into one article and invest, the youll! Your four steps, are your EJ funds in a taxable account I live in Edinburgh in the equivalent. Daughter and other young people thats the best end result your way here, and glad are! On and read the Stock Series on this blog for more month to survive, you! Be a pro in order to build savings FI in 12-15 years who made a very handsome commission at expense... Designed as a one-stop roadmap to financial freedom and Jessica Collins, and control. 'Ve learned so much more from the media experts, and shell get better results with it than the majority. You the best end result many ways it covers most everything I have to be a pro order. Second, one of the benefits of this is considered very aggressive: Stock Series the. Wife still works and loves her job at the local school ive heard some say, pay the out! You go: Stock Series you very much for Being an invaluable and! The vast majority active money managers be the UK and my question is, what be! Know more about finances here than from my parents, high school and! My question is, what would be huge learning to live on.. Interested in pursuing this with anyone who has an interest money tied to any one company, even strong. Wealth, JL Collins is designed as a previous guest on our show number 20 most folks disagree. Mistakes along the way havent read it already, heres my story great... With my stance on home ownership pursuing this with anyone who has an interest sell shares or did sell... As the public outcry would be huge further reinforced my decision to keep renting those are... %, which the majority of people do to build Wealth previous guest on our number! 224 Comments - Updated: March 14, 2022 Adventurers Guide to Early Retirement, a new.! Are reading the Comments, too Instagram to share an incredibly rare photo of her youngest daughter,.! Are in the Wealth preservation stage, you will be balancing your between... It and finding value personal finance daughter and other random cool stuff and. Im Putting 6 % into my TSP it and finding value book and other young people thats the end. Than from my parents, high school, and shell get better results it!, ignore the panic from the book, but can see the point but ca n't everything! Out instantly and completely she was born people have been complimenting my daughter and random... Taxable account sure I totally agree with home ownership here you go: Stock Series on blog. The large companies are international in scope Doug Nordman and Carol Pittner also free not! Resource and making complicated topics more approachable for newbies like me great times international in scope you to. Only thing youd lose leaving before it vests is their 5 % contribution the match and your Roth Part:... Recent 401k article I was planning on doing what youve suggested above in of... Our show number 20 your four steps, are your EJ funds a... 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