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2024 Canadian Retirement Income Guide

WELL, A TRADITIONAL PENSION IS BECOMING HARDER TO COME BY THESE DAYS. SO BUILDING A STEADY RETIREMENT INCOME IS KEY FOR ANY FINANCIAL PLAN. CANADIANS HAVE MORE THAN ONE OPTION WHEN IT COMES TO WHERE THEY SHOULD BUILD THAT RETIREMENT INCOME FOR THE FUTURE OR ACCESS ADDITIONAL RETIREMENT FUNDS FOR TODAY'S YOUR MONEY MONTH SEGMENT, WE'RE JOINED BY TED WORKSHOP AND HE'S PRESIDENT AND CEO OF TRI DELTA PRIVATE WEALTH ATTEND. THANKS SO MUCH FOR COMING IN. IT'S GREAT TO BE HERE. THANK SO THIS IS THIS IS A GREAT TOPIC TO TO DIG INTO FOR REALLY ANYONE OF ANY AGE BECAUSE THEY MIGHT BE THINKING ABOUT THIS REALLY EARLY OR THEY MIGHT BE NEARING RETIREMENT AND THINKING, OKAY, MAYBE THERE'S SOME OTHER OPTIONS FOR ME HERE OF OF FUNDS THAT I COULD ACCESS ARE WAYS THAT I COULD MANAGE MY BEST IN IN RETIREMENT. >> SO MAYBE WE SHOULD START, THOUGH, JUST WHERE YOU KNOW, WHERE PEOPLE SHOULD GET STARTED WHEN THEY'RE THINKING ABOUT THEIR RETIREMENT YEARS AND EVEN JUST THE BUDGET, HOW THEY SHOULD BE LOOKING AT WHAT THEY NEED IN RETIREMENT. WELL, I ALWAYS SAY IT, IT STARTS WITH 2 THINGS.

ONE IS. >> YOU WERE WORKING AND YOU HAD A PAYCHEQUE AND THEN YOU EITHER ARE OR MIGHT IN THE FUTURE. STAFF WORKING IN THE PAYCHEQUES GOT. OKAY, HOW DO I REPLACE THAT? PAYCHEQUE? SO THE NEXT THING IS HOW MUCH TO SPEND AND SPENDING SOMETIMES CHANGES IN RETIREMENT. THERE'S EXPENSES THAT DISAPPEAR AND IN SOME CASES, ESPECIALLY IN EARLY RETIREMENT, SOMETIMES AS MORE TRAVEL AND SOME OTHER EXPENSES. SO YOU SORT OF SAY WE START WITH HOW MUCH TO SPEND AND THEN YOU GO, HOW DO YOU BUILD THAT PAYCHEQUE FROM VARIOUS SOURCES AND HOW DO YOU DO IT? MOST TAX EFFICIENT. >> YEAH, OKAY, SO LET'S GO THROUGH SOME OF TOP SOURCES ARE TOP WAYS THAT YOU EITHER, YOU KNOW, BUILD YOUR RETIREMENT INCOME IN VARIOUS DIFFERENT FUNDS OR OR BE LOOKING TOWARD.

THE VERY BASIC FOUNDATION OF THINGS AND THAT THE CANADA PENSION PLAN, IS ONE ASPECT THAT PEOPLE SHOULD BE CONSIDERING. YEAH. AND SO EVERYONE HAS ALWAYS A LITTLE BIT OF TRICKING US TO IT. YEAH. SO CANADA PENSION PLAN, MOST PEOPLE QUALIFY. >> BUT THE QUESTION IS, DO TAKE IT. 62, TAKE IT 65 TO TAKE 70, WHAT WHAT MAKES THE MOST SENSE FOR SO ONE OF THE THINGS IN DIED WE TALK ABOUT THAT MAY ALSO HAVE A LINK TO A CPP CALCULATOR THAT HELPS YOU DETERMINE WHEN YOU SHOULD TAKE. OKAY. AND ARE THERE ARE THERE THAT WOULD SORT OF SWAY YOU ONE WAY OR THE OTHER? >> WELL, THE BIGGEST ONE IS HEALTH. >> AND IF YOU'RE GOING TO LIVE TILL 90, YOU MIGHT AS WELL WAIT TILL 70 IDEALLY TO TAKE CPP IF YOU'RE NOT IN GOOD HEALTH, YOU WANT TO TAKE AS SOON AS YOU TURN.

60. >> THE OLD AGE SECURITY IS ANOTHER ONE THAT APP PEOPLE TURNED TO BETS FOR MORE. IS IT FOR MORE OF A LOWER INCOME IN YOUR RETIREMENT YEARS? NOT SO BASICALLY UP TO ABOUT 86,000 OF INCOME. YOU GET FULL OLD AGE SECURITY AND THEN UP TO I THINK IT'S ABOUT 145,000. IT GETS SORT OF SLOWLY DECLINES TO 0, BUT IF YOU HAPPEN TO BE IN A RELATIONSHIP AND HAVE A PARTNER AND YOU CAN SPLIT INCOME, YOU CAN, YOU CAN HAVE $170,000 OF INCOME SPLIT EQUALLY AND STILL GET FULL OLD-AGE SECURITY. SOME MOST CANADIANS WILL QUALIFY AND SO HOW MUCH WOULD SOMEBODY BE LOOKING AT IF YOU KNOW, ADDING TOGETHER, CPP AND OAS? WELL, MAXIMUM, YOU TAKING IT 65, YOU COULD HAVE 48,000 A YEAR COMING IN BETWEEN A COUPLE, A LOT OF AGAIN, ALL OF THESE THINGS WE HAVE A U.S.

CALCULATOR AT WEBSITE AT RIDOUT, THE .CA AND ALSO TALKS ABOUT IT THE GUIDE. >> THERE'S ALSO, OF COURSE, AS YOU KNOW, FUNDS THAT YOU MIGHT BE SAVING IN YOURSELF. RECIPES ARE, ARE A BIG ONE WHEN YOU'RE TALKING ABOUT RETIREMENT PLANNING, BUT THEN THERE'S ALSO R I F BUT TO WHICH YOU HAVE TO CONSIDER WHEN YOU'RE WHEN YOU'RE GETTING TO THOSE RETIREMENT YEARS. SO THE KEY THERE IS. >> IF YOU'RE MAKING A HIGH INCOME, I THINK YOU WANT TO PUT MONEY INTO RRSPS AND GET THE TAX REDUCTION.

THE ISSUE IS WHEN YOU TAKE IT OUT, SOMETIMES IT MAKES SENSE TO TAKE RSP MONEY OUT. LET'S SAY YOU'RE TIRED. 60, TAKE OUR SPEED MONEY OUT FOR THE NEXT 10 YEARS AND DEFER TAKING YOUR CPP AND OAS. SO THERE'S A FEW MOVING PARTS. YOU WANT TO THINK ABOUT, BUT YOU'RE SORT OF LOOKING GOING. IT'S ALMOST LIKE MAKING A MAKING A BIG MEAL, RIGHT? WHERE YOU TAKE FROM WHAT DO YOU DO FIRST, WHAT DO YOU DO SECOND? AND SOME OF THEM HAVE BIG IMPACTS ON ON THE TAX BILL HE YEAH, THAT'S I MEAN, THAT'S EVEN JUST AN TIP THERE THAT IF YOU ARE TAKING THAT OUT OF THOSE FIRST YEARS AND THEN YOU COULD DELAY YOUR YOUR CPP A BED PEOPLE MIGHT HAVE OTHER INVESTMENT THAT NON-REGISTERED AND INVESTMENT ACCOUNTS.

WHAT WOULD YOU THINKING OR WHAT SHOULD PEOPLE BE THINKING ABOUT WHEN IT COMES AGAIN, YOU CAN SOMETIMES SOMETIMES I SAY TO PEOPLE. >> LET'S TAKE SOME MONEY OUT OF YOUR NON-REGISTERED ACCOUNT AND SOME MONEY OUT OF YOUR RRSP OR ACCOUNT TO TO BUILD YOUR RETIREMENT PAY CHECK BECAUSE IT WILL KEEP YOUR INCOME LOWER. >> YOU PAY TAX, EVERY DOLLAR COMES OUT OF THE RSP OR RIF, YOU DON'T PAY TAX COMING OUT OF THE OTHER COUNT. SO IF YOU COMBINE IT TOGETHER, MAYBE YOU CAN, YOU CAN, YOU KNOW, GET ALL OF YOUR OLD AGE SECURITY, PENSION SALT. AGAIN, ALL OF THESE THINGS ARE THEY'RE NOT A SIMPLE WHEN YOU SORT OF LOOK AT ONE AND IT SORT OF OKAY AND LOOK AT ALL OF THEM, YOU WHICH ONE DO I DO FIRST AND WHAT IN WHAT MEASURE? YEAH, WHICH WHICH IS GREAT THAT YOU DO HAVE THIS CHECKLIST THAT PEOPLE CAN GO THROUGH AND CHECK IT ALL OUT.

AND YET WE ONLY HAVE ABOUT A MINUTE LEFT HERE. MAYBE IF YOU WANT TO TOUCH USING YOUR HOME EQUITY, BECAUSE THAT MIGHT BE SOMETHING THAT PEOPLE ARE THINKING ABOUT MANY PEOPLE. YEAH, SO HOMEEQUITY, ESPECIALLY FOR PEOPLE PLACES LIKE TORONTO AND VANCOUVER, LOT OF PEOPLE ARE REAL ESTATE, RICH CASH, POOR. >> AND THEY SAY, I DON'T WANT TO MOVE FROM MY HOUSE. SO WHETHER USER REVERSE MORTGAGE WEATHER, YOU CAN SET UP A LINE OF CREDIT. A LOT OF PEOPLE DON'T THINK THEY CAN QUALIFY FOR A LINE OF CREDIT, BUT THEY CAN. >> WE OFTEN RECOMMEND PEOPLE BORROW SOME MONEY FROM THEIR TO LIVE A BETTER LIFESTYLE, RATHER THAN BEING RICH.

IT 90 WHEN YOU SELL YOUR HOUSE RIGHT BUT ALL THESE AGAIN, ALL THESE THINGS ARE IN CANADIAN .

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Retirement Planning Home

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Transferring wealth to your children

[Music] well if you want to transfer transfer wealth onto your children there's no right there's no one-size-fits-all there's a number of routes that you can take the most simple thing is that you just simply gift that money to them and there's some complexities around it it stays within your estate for seven years and you have to survive seven years for that to be beneficial from an inheritance tax perspective um and then you also are giving up that money to your children and so there needs to be thought about are they adult enough to be able to look after that money and be a custodian of it or are they going to go and spend it on things that that you perhaps wouldn't want them to um and there could be other complications in terms of relationships and divorces that could see some of that wealth go elsewhere so it's not suitable for everyone but it is a very simple way to do it and then there's other ways that you can look to do it with with things like trusts where you can set up a trust and you can then retain the control of that those assets to pass on as as and when you want to [Music] you

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Retire Wealthy Home

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5 Best Fidelity Funds to Buy & Hold Forever

today we're going to talk about the five best fidelity funds to buy and hold forever hi if you're new to the channel my name is tay from financial tortoise where we learn to grow our wealth slow and steady in order to guide our conversation i'm going to use the three fund portfolio strategy to frame the fidelity funds i'm going to recommend in this video the three fund portfolio is one of the most popular do-it-yourself investment strategies and as the name implies it's made up of three simple funds most often an equities fund an international fund and a bond fund so all the funds i'm going to recommend today will fit into at least one of these slots the first fidelity fund you want to buy and hold forever is fidelity's u.s bond index fund fxnax it tracks the bloomberg barclays u.s aggregate bond index which is composed of investment-grade government bonds corporate bonds and mortgage-backed securities it holds approximately 8 400 bonds the top issuers are the u.s treasury or issuers of mortgage-backed securities like fannie mae and freddie mac it has an expense ratio of 0.025 percent which means if you have 10 000 invested in fidelity us bond index fund you're essentially paying 2 dollars and 50 cents for fidelity to manage this fund for you the fund started in 1990 and since then its average annual total return has been 5.33 percent so what are bonds and why do you need them in the simplest term bonds or loans when you buy bonds you're essentially loaning money to someone in this case to a company or a government agency and they're a very important addition to a well-constructed investment portfolio because of how different they are from stocks a good analogy i like to use to frame stocks versus bonds is this think of stocks as your core wealth building engine without it you aren't really going anywhere and bonds are like your brakes without it you could drive yourself off the road when you have bonds in your portfolio it helps to smooth out your investment ride because though they have lower returns they have less volatility during times of market crash where your stock investments can dip by 20 to 30 percent your bond investments will hold steady and ensure your right is so rocky so in order to help you smooth out your investment right you want to start adding them to your portfolio as you get closer to retirement age and if you're invested in fidelity consider fidelity u.s bond index fund as your core bond holding in your portfolio the second fidelity fund you want to buy and hold forever is fidelity total international index fund ftihx the fund tracks the msci all-country world index excluding the united states it represents approximately 5 000 international companies the top companies in this fund are made up of companies like taiwan semiconductor nestle and asml holdings it has an expense ratio of 0.06 percent which means that if you have 10 000 invested in ftihx you're essentially paying six dollars for fidelity to manage this fund for you the fund started in 2016 and since then its average annual total returns has been 5.99 what the fidelity total international index fund will do for you is provide you exposure to the international market outside the united states exposure to different countries sectors and even currencies and we can look at what happened to the japanese stock market as a lesson on why we might want to hold an international fund at the end of 1989 the japanese stock market's capitalized value was considered the largest in the world the nikkei 225 index the index of 225 largest publicly owned companies in japan reached an all-time high of close to 40 000.

Sadly 22 years later the nikkei was under 8 500 and to this day has yet to reach its all-time high again but satur is a japanese investor who failed to invest in international stocks outside of japan the us-based companies are currently the world leader in market capitalization and revenue but who can confidently say that will stay like that in the future it would be unfortunate but the same thing could happen to the u.s stock investors i personally still have strong confidence the u.s economy and u.s based companies as a whole but i also have to continuously check my assumptions financial writer larry swegel had a saying never treat the highly likely as certain and the highly unlikely as impossible as you get more comfortable with the international market you can start adding them to your portfolio and the fidelity total international index fund is a great option to represent your international holdings the third fidelity fund you want to buy and hold forever is fidelity zero total market index fund fzrox the fund tracks fidelity's in-house fidelity u.s total investable market index it represents approximately 2 700 u.s based companies the top holdings in this fund are apple microsoft and amazon it has an expense ratio of zero percent yes you heard me right zero dollars to invest in fidelity zero total market index fund thus the zero in its name the fund started in 2018 and since then its average annual total returns has been 11.82 the fidelity zero total market index fund is a total market index fund which means it tracks the total u.s stock market so this will be a great option as your core equities holding in your three fund portfolio however there are a couple things i do want to note with this fund especially in comparison to the two other equities options i'll cover here in a bit one is the fact that the index it is tracking is fidelity's in-house index fidelity u.s total investment market index this necessarily isn't a bad thing but there are actually more than 2 700 publicly traded companies in the united states than what this fund represents what this fund has done is exclude really small companies from its index in a big scheme of things this doesn't make that much of a difference in performance since the representation is based on market capitalization so the excluded companies would only represent maybe one percent or even less than that of the total fund but this is still something to note the total market here isn't quite the total market a second item to note with the fidelity zero total market index fund is the fact that you can't transfer your shares to another firm without selling your holdings and when you sell your holdings you have to pay taxes on your capital gains the fidelity zero total market index fund was designed with zero percent expense ratio in order to gain more customers so fidelity doesn't want you to move your money to a different firm and this limitation creates that barrier paying zero percent is nice but you won't understand that free comes with some strings attached but if you're planning to stay with fidelity for life fidelity zero total market index fund is a great equities fund to hold the fourth fidelity fund you want to buy and hold forever is fidelity total market index fund fskax the fund tracks the dow jones u.s total stock market index it represents approximately 4 000 u.s based companies the top holdings in the fund are apple microsoft and amazon essentially the same as fidelity zero total market index fund it has an expense ratio of 0.015 percent which means that if you had 10 000 invested in fidelity total market index fund you're essentially paying 1.50 for fidelity to manage this fund for you the fund started in 1997 and since then its average and annual total return has been 8.29 it's fidelity's original total market index fund prior to the introduction of fidelity zero total market index fund and fidelity total market index fund does exactly what his name implies invest in the total u.s stock market essentially every u.s based companies out there when it comes to investing in the stock market the key principle you want to abide by is diversification many people tend to think the only way to make money in the market is to beat the market by either selecting good stocks or good actively managed mutual funds unless you're a professional investor with hundreds of analysts working for you around the clock analysts who are constantly interviewing and researching companies and industries we can't win in the stock picking or fun picking game the odds are just stacked too high against the individual investor so the best strategy to beat wall street is to just track the market and at the lowest cost and fidelity total market index fund is a great fun to hold as your core equity is holding in your portfolio if you want more flexibility from the fidelity zero total market index fund the fifth fidelity fund you want to buy and hold forever is fidelity 500 index fund the fund tracks the s p 500 index which represents the 500 largest publicly traded companies in the united states at the time of this video there are exactly 508 publicly traded companies in this fund the top holdings in this fund are apple microsoft and amazon essentially the same as fidelity zero total market index fund and fidelity total market index fund not a surprise given the company representation is based on market capitalization and these big companies represent a good percentage of the market as a whole it has an expense ratio of 0.015 percent same as fidelity total market index fund so if you have ten thousand dollars invested in fidelity 500 index fund you're essentially paying dollar fifty for fidelity to manage the fund for you the fund is the oldest of the bunch it started in 1988 and since then its average annual total returns has been 10.66 percent when most people talk about the stock market they're most often referring to the standard and poor 500 not the total market index and the reason is because it's so much older it was created in 1926 when it began tracking 90 stocks and in 1957 the list expanded to 500 and for the past century it has been the go-to index to represent the stock market when you turn on any financial news reporters are always discussing how the s p 500 is up 50 points or down 100 points it essentially represents the 500 largest u.s corporations weighed by the value of the market capitalization and because it's weighted by market cap though there are approximately 4 000 publicly traded companies in the united states total these 500 stocks represent about 80 to 85 percent of market value of all u.s stocks and the weight within the index automatically adjusts based upon the changing stock prices to this day the s p 500 remains a standard to which professional mutual fund managers and investment firms compare their returns against so if you want your equities holding to match the performance the largest u.s stocks since they're essentially what moves the market hold fidelity 500 index fund as your core equities holding but i do want to say this whether you choose the fidelity 500 index fund the fidelity total market index fund or the fidelity zero total market index fund as your core equities holding you really can't go wrong with any one of them they're all great funds you just want to understand exactly what you're buying that's it guys i know i normally advocate for vanguard funds but sometimes you may not have the ability to choose the investment firm that you want because maybe your employer doesn't offer it that was the case for me and therefore most of my 401k is actually invested in fidelity fidelity is a great investment firm if you're looking to invest with them pick any of the five that i mentioned here and you can't go wrong if you'd like to learn more about the three fund portfolio and why you might want to consider it as your strategy check out my video here thank you guys for watching until next time all the best

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401K to Gold IRA Rollover

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401K Explained in தமிழ் (US Retirement Series – 1)

This episode and next few episodes are going to be US specific episodes. All these US specific episodes will have US flag in their thumbnails. Indian audience, feel free to skip these episodes and save your time. US folks, there are 2 main retirement plans in USA. 1. 401K and 2. IRA. We will cover more in detail about IRA in another episode. In this episode, we will cover 401K in detail. Hi. My name is Vijay Mohan. You are watching – Investment Insights. 401K is a retirement plan offered thru employer.

We will not be able to open a 401K account just by ourself like a brokerage account. We can contribute to a 401K, only if it is offered through our employer. Almost all employers offer 401K plan. Very few small companies do not offer 401K. How much can we contribute to a 401K? Each employee can save up to $20,500 per year. If husband and wife both are working, both can contribute $20,500 each. People older than 50 can contribute more – $27,000/year. That is called as "Catch up contribution". Other than our contribution to 401K, many employers match up our contribution up to certain percentage. Let's say that an employer is matching up to 7%. If our salary is $100K, 7% of that would be $7,000. Let's say that we are contributing $20,500 to our 401k and maxing it out. Employer would have matched up the first $7,000 of that $20,500 and would have contributed that $7,000 to our 401K.

So in total, our contribution $20,500 + employer match up contribution $7,000 = $27,500 would have gone into our 401K account. Employer match of $7,000 would not come under the contribution limit of $20,500. This match is over that contribution limit. In this employer match, each employer has a catch called "Vesting Schedule". This vesting schedule defines when that extra amount matched up by the employer is going to actually credit in our account. Let's say that an employer has a vesting schedule of 2 years, then in that 2 years, the match up amount contributed by the employer will be in our account, but not vested. That means, if we leave the job within the 2 years of joining, then we will not get that matched up amount. But after 2 years, that matched up amount will be ours totally, even if we leave the job. Also, after that vesting period of 2 years, all money matched up by the employer will be vested (available) to us immediately. That means, there will not be any restriction over the matched up money after passing 2 years.

The 2 years I am referring here is just an example. It will be different for every employer. So what is the advantage to us from this 401K? The advantage is, we do not have to pay the tax on the amount we are contributing to 401K. But we should pay tax on withdrawal after retirement. What? No tax for the contributed money, but taxed on withdrawal? What benefit does that offer to us? Good question. To understand that, we should know about our tax bracket.

What we are seeing here is 2022 Married Filing Jointly tax bracket. Let's say that our family income is $120,000. We will come under 22% tax bracket. That does not mean that we will be paying 22% tax for the whole $120,000 we earned. First 20,000 of $120,000 will be taxed at 10%. Next 63,000 will be taxed at 12%. Money earned over that will be taxed at 22% tax. So the 22% tax is charged for the top most dollar we made in that year. This is called as Marginal Tax rate. If we add up all the taxes for individual brackets of 10%, 12% and 22%, that comes out to $17,634. This is 14.7% of our total income $120,000. So actually we are paying only 14.7% of our income as tax. This 14.7% is called "Effective Tax Rate". May confuse between marginal tax rate and effective tax rate. Hope it is clear now. So when we contribute $20,500 to our 401K, it comes out of our top most tax bracket. That means, the tax we saved from the contribution of $20,500 is 22%. $4510. If we withdraw the same $20,500 after our retirement, the tax rate for that would be 10%.

Tax saved for contribution is 22%, while money coming out is taxed at 10%. The difference is 12% in our favor. Or in other words, we save tax in marginal tax rate for contribution and we pay effective tax rate while withdrawal. We all know that effective tax rate will be always lower than the marginal tax rate. This is first advantage. Let's check out a sample calculation to understand the next advantage. Let's say that our family income is $120,000. Then federal marginal tax rate is 22%. Let's use Illinois state tax rate – 5%. For 401K contribution, not just the federal tax, we don't have to pay the state tax as well. Let's assume that our 401K will be growing at 8% growth rate.

We are maxing out our 401K contribution every year by contributing 20,500/year. Tax savings from this contribution is 27%. $5535. We are continuing to do this till our retirement for 25 years. By the end of 25 years, our 401K balance would have reached 1 million 600,000 dollars. The $5535 that we saved every year in tax alone would have grown into $437,000. The absolute tax saved is 5355 * 25 = $138,000. The growth from that savings is approximately $300,000. Or in other words, just because we did not pay (deferred) the tax of $138,000, the extra growth we got from that is $300,000. The growth of money by deferring (not paying the tax now) the taxes to pay later is called as "Tax deferred Compounding". This tax deferred compounding is 401K's second advantage. For these 2 advantages, we can contribute to 401K. We should. So far we have seen a regular pretax 401K. There are other flavors of 401K like Roth 401K and After tax 401K. We will dig deeper into that in the next episode. Thank You..

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401K to Gold IRA Rollover

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Your Money Matters: How to plan for retirement if your job doesn’t offer a 401(k)

>> ALL RIGHT. THANKS SO MUCH FOR WELL, IN THE MIDDAY FIX, IF YOU'RE A NON-TRADITIONAL WORKER LIKE A FREELANCER, ENTREPRENEUR OR INFLUENCE ARE PLANNING FOR RETIREMENT IS A BIT MORE CHALLENGING THOSE JOBS TYPICALLY DON'T OFFER A 4, 1, K, BUT WE'VE GOT AN EXPERT HERE, RICHARD. SHE WAS A FINANCIAL LIFESTYLE EXPERT WITH FIRST CAPITAL WEALTH MANAGEMENT GROUP HERE WITH SOME TIPS ON HOW TO BUILD A RETIREMENT FUND. >> RICHARD, THANKS SO MUCH FOR JOINING US. IT'S GREAT TO HAVE YOU HERE. GOOD TO BE HERE. FOR HAVING ME. ABSOLUTELY. AND AS WE WERE JUST TALKING ABOUT, YOU KNOW, POST PANDEMIC, A LOT OF PEOPLE HAVE NOT GONE BACK TO THEIR TRADITIONAL JOBS AND ARE PROBABLY EXPERIENCING THE FREEDOM OF BEING THEIR OWN BOSS PER SE. BUT A LOT OF FUNDAMENTAL AND FOUNDATIONAL STRUCTURES THAT WERE IN PLACE TO HELP THEM SAVE ARE NOT THERE. SOME. CAN. HOW CAN WE HELP WELL, IT'S A BIG DEAL AND A LOT OF PEOPLE RIGHT NOW ARE STRUGGLING WITH THAT. >> AND THERE'S A THERE ARE ANSWERS TO IT. OBVIOUSLY, IF IF YOU'VE LEFT YOUR. PREVIOUS EMPLOYER, WHETHER BY CHOICE OR BY FORCE AND THERE'S MONEY ON THE TABLE.

I YEAR-OLD FOR ONE K ONE OF THE FIRST THINGS YOU WANT TO DO IS TAKE IT WITH YOU. MEAN, LITERALLY TAKE THE MONEY WITH YOU RIGHT BUT ROLL THAT YOUR OWN NEW. I WRITE YOU CAN DO THAT WITHOUT ANY COST OR ANY TAX LIABILITY AND THE COOL THING ABOUT IT IS IT KEEPS YOU IN THAT STRUCTURE, OK? BECAUSE YOU'VE GOT THE LIMITATIONS OF WHAT YOU CAN PUT IN PER YEAR, WHICH WAS SIMILAR TO WHEN YOU HAD A 4, ONE K AND YOUR OLD EMPLOYER.

BUT THE MOST IMPORTANT THING IS WHEN YOU IF YOU LEFT DURING THE PANDEMIC OR POST-PANDEMIC, WERE YOU AND YOU WALK AWAY FROM THAT ORGANIZATION AND TAKE THE MONEY WITH YOU BY ROLLING IT INTO A NEW HIGHER RATE OF YOUR OWN TO TRADITIONAL OR ROTH. IT DOESN'T MATTER. IT JUST DEPENDS ON THAT, SIR. THAT'S KIND OF A TAX QUESTION. AND SOME I RECOMMEND THAT A PERSON LOOK AT WHERE THEY ARE. THEY'RE GOING TO BE SELF EMPLOYED. THEN THEIR THEIR TAX BRACKETS CHANGING IMMEDIATELY. THEY'VE BEEN EMPLOYED AT A COMPANY AND NOW THEY'RE GOING TO BE SELF EMPLOYED. THEIR TAX BRACKETS AND ALL THAT WILL BE DIFFERENT. SO THEY NEED TO LOOK AT WHAT'S RIGHT FOR THEM.

AND THAT'S WHERE THE TECH SECTOR ADVICE COMES INTO PLAY. SO EITHER ONE AS GOOD AS BUT TO YOUR POINT EARLIER, AS LONG AS YOU'RE PUTTING SOME STRUCTURE BACK IN AND SAVING. OKAY. AND THEN WHAT SOMEONE WHO IS SELF EMPLOYED OR A BUSINESS OWNER AND THEY DON'T HAVE. >> ANY EMPLOYEE SITS JUST JUST THEM, THOUGH. WELL, THERE'S A COUPLE OF OPTIONS THAT CAN DO A SOLO FOR ONE K THAT CAN DO WHAT'S CALLED THE SEP. AND EXCEPT IT'S GOT A COUPLE OF DIFFERENT GUIDELINES. BUT IN THE CASES OF THE SOLO FOR ONE K I A STRONG ADVOCATE OF THAT. IF YOU HAVE A SMALL BUSINESS AND IT'S JUST YOU AND MAYBE A SPOUSE WHO MAY QUALIFY. OKAY. IT'S A GREAT TOOL TO USE ON THAT. DOES HAVE YOU KNOW, LIMITATIONS IN TERMS OF HOW MUCH YOU CAN PUT AWAY FOR YEAR. BUT AGAIN, IT GOES BACK TO WHAT YOU WERE SAYING BEFORE. IT'S ABOUT THE MUSCLE MEMORY OF HAVING THE STRUCTURE AND YOU CAN CREATE THOSE ON YOUR BY CREATING A SOLO FOR ONE K. AND WOULD YOU SAY THAT FOR PEOPLE WHO ARE SELF EMPLOYED IN OUT HERE DOING THEIR OWN THING.

IS IT STILL POSSIBLE SAVE AS MUCH AS YOU WOULD, EVEN IF YOU WERE A PART OF A TRADITIONAL, YOU KNOW, WORKSPACE. SO HERE'S WHAT HAPPENS WHEN YOU WORK FOR BIG COMPANIES FOREIGN ORGANIZATION, WGN OR ANY OTHERS. AND THERE'S A 4, ONE K PLANS PART OF YOUR RETIREMENT PLANNING. YOU'RE CONTRIBUTING AND THE COMPANY IN MOST CASES, THEY'RE MATCHING TO SOME EXTENT. THAT GOES AWAY. WHEN YOU LEAVE IN TERMS OF THE COMPANY MATCHING BECAUSE NOW YOU'RE THE SO THAT'S WHERE IT'S REALLY CRITICALLY IMPORTANT TO MAKE SURE THAT YOU ARE STILL CONTRIBUTING AS LONG AS YOU CAN TO THAT MAXIMUM THAT YOU CAN CONTRIBUTE.

SO YES, THE SIMPLE ANSWER IS THERE'S STILL THAT OPPORTUNITY. IN FACT, IN SOME CASES, IT'S EVEN BETTER BECAUSE YOU HAVE MORE CONTROL AND YOU CAN USE SOME OF THE BOTH TAX DEFERRED AND TAX FREE TOOLS TO GET TO THAT POINT DOWN THE ROAD, OK? AND THEN WHY IS IT SO IMPORTANT? AS WE'RE TALKING ABOUT RETIREMENT SAVINGS? YOU KNOW, OBVIOUSLY THE SOONER YOU START THE BETTER. BUT FOR SOMEONE WHO SAYS IT'S JUST TOO LATE FOR ME, YOU KNOW, WOULD YOU EVER SAY THAT TO ANYBODY IN NOW? TOO LATE BECAUSE THERE'S A COUPLE WAYS THAT THAT WE LOOK AT IT. ONE IS IT'S NEVER TOO LATE FOR YOU TO START BECAUSE YOU ALWAYS CAN TAKE ADVANTAGE OF SOME OF THE AFTER TAX TOOLS TO USE. BUT IT'S NEVER TOO LATE FOR THOSE WHO CARE ABOUT BECAUSE AT THE END OF THE DAY, SAVINGS IS PASSES CAME. SO IF YOU'RE PUTTING MONEY AWAY, SOMEBODY IS GOING TO BENEFIT FROM THAT. IT MAY NOT DIRECTLY BE YOU, BUT IT MAY BE PART OF YOUR LEGACY. WE HAVE JUST UNDER A MINUTE LEFT. RICHARD, IS THERE ANY LESS POINTS TO BITS THAT YOU WANT TO, YOU KNOW, JUST GET ACROSS THE FOLKS BEFORE WE WRAP UP, WE'RE GOING TO YOUR ORIGINAL QUESTION AND YOUR SECONDARY QUESTION ABOUT CAN YOU DO IT? ARE YOU TOO OLD? YOU'RE NEVER TOO OLD.

START WHERE YOU ARE. MAKE SURE THAT YOU BASE IT ON YOUR BUDGET SO THAT YOU CAN CONTINUE TO DO IT. SO LIKE WORKING OUT AND, YOU KNOW, WE ALL KNOW THIS. YOU GET TO THAT PLAN ON THE LOSE WEIGHT, GET BETTER SHAPE AND YOU TRY TO DO TOO MUCH AT ONE TIME BECAUSE YOU DIDN'T LOOK AT YOUR BUDGET OF YOUR TIME. IN THIS CASE WHEN IT COMES YOUR FINANCIAL BUDGET, THE SAME THING APPLIES, START SAVING. LOOK AT YOUR BUDGET, DETERMINE WHAT YOU CAN DO AND THEN BE ABLE TO STICK TO IT. THAT'S PROBABLY MY BIGGEST TIP IS JUST JUST SAFE. ALWAYS SAY MY WIFE AND I TALK ABOUT THIS ALL THE TIME. ARE WE SAVING WE AS AS PROFESSIONALS TO THE SAME THING. SO TO THE CONSUMER JUST START WHERE YOU ARE AND THEN BE ABLE TO BUILD AND GO FORWARD. ALL RIGHT. ONE OF MY MODELS PENNIES ADD UP, SAY SURE.

ALL RIGHT. YES, THANKS SO MUCH, RICHARD. WE APPRECIATE YOU BEING ON THE SHOW. THANK YOU. CAN GET MORE INFORMATION AT FIRST SEE IG DOT COM OR FOLLOW THEM ON SOCIAL MEDIA. AGAIN, RICHER THANK YOU SO MUCH. WE APPRECIATE .

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Retirement Planning Home

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Building Wealth (Ep.2) – Delayed Gratification (தமிழ்)

We went through the importance of "Developing Financial Knowledge" in the last episode. If you have not watched it yet, please watch that first. Today we are going to watch the second episode in the series "Building Wealth". Delayed Gratification Gratification means – We all have our own desires right? When we attain those desires, we get this great satisfaction right? That satisfaction is what is called "Gratification" in English. "Isn't attaining our desires is a good thing? Why should we delay?" – you ask. Explaining that is the purpose of this episode. If "Financial Knowledge" is the architect of building wealth, "Savings Rate" is its foundation. Our foundation will be as strong as our savings rate. We already know this from "Financial Freedom" episode. Most of us will achieve 20% savings rate easily. But to go beyond that, we need to know some strategies. Normally what we do is, we keep upgrading our lifestyle in line with our earnings. We will be with four roommates when we start working.

In 2-3 years, our salary will double. When that happens, we upgrade ourselves from 4 room mates to 1 room mate. Then in 2-3 years, we get married. Then we upgrade ourselves to a one bedroom apartment. Then in 2 years, we upgrade to a two bedroom apartment. Then after kids, we buy our own home. So depending on our career growth, we keep upgrading our lifestyle. Then expenses add up with kids, school fees and so on. It never comes down. After 40 years, we will come to a sudden realization, that we have crossed half our life time, but all that left is just our home as asset.

We start thinking about retirement and investments only after that. But by that time, we will have other responsibilities. Saving for kids college, marriage become our priorities. Just like that, our life would just pass away. Next generation will follow the same pattern as well. How can we build wealth if we live like this? Life of a US settled person is also very similar to this. But they do one more thing after 40. They sell their current home and upgrade to a bigger home. So we are keep upgrading our life style depending on our financial growth from our career. Regardless of how much we earn, we spend to match that earnings growth.

If we want to break this cycle and move to next level, there is just only one option. That is – Delayed Gratification. That is – instead of enjoying the life upgrades immediately we can postpone it to some time, and attain financial growth. Before we check out on how we can do that, a small tidbit about "Delayed Gratification". In 1960's, Stanford University conducted a psychological experiment called "Marshmallow Experiment" with kids.

Marshmallow is something that looks like a thicker version of Cotton Candy. It is white and super sweet. Kids love it. They used 3.5 to 5.5 years old kids for this experiment. What they did was, They asked a kid to stay inside a room and they put a marshmallow on a plate in front of them. They made a deal with that kid. The deal is – I will leave the room now. But will be coming back after 15 mins. If you have not eaten the marshmallow by the time I come back, you will get two marshmallows instead of one. So – the kid has two choices. There is a marshmallow right in front of kid's eyes. Instead of waiting for another marshmallow for 15 mins, the kid can eat one right now. Or wait for 15 mins and eat two marshmallows instead of one. When we hand over a fish to a cat, is it possible for the cat not to eat the fish? 7 out of 10 kids ate the marshmallow immediately. But 3 out of 10 kids controlled their temptation and waited for the second marshmallow successfully.

Stanford University did not stop their research at that. They followed these kids for 40 years to see how they are doing in their life. The kids who waited patiently settled better in their life. They did well in their college entrance exams. They did not fall addicted to any drugs. They did not have obesity issues. They used their "Self Control" capability totally to their advantage. What we learn from here is, people who have a strong mindset and who do not get distracted easily are very disciplined and they set up a goal for themselves and attain it as well. They do not think in short term. They plan for long term and achieve it successfully.

We will see this "Long Term Planning" more in detail in another episode. Coming back to our topic – "Life Upgrade" How many upgrades do we see in our adult life? We upgrade from 4 room mates to 1. We upgrade from 1 room mate to separate apartment. From 1 BR we upgrade to 2 Bedroom. From 2 Bedroom, we upgrade to own house. Even for own house, we again upgrade to a bigger home. All these are housing upgrades. Like this, We upgrade from pubic transportation to bike. From bike to car. From car to luxury car. These are upgrades in our personal vehicle. We don't do these upgrades without a reason. We do it to match our earnings. If we do not upgrade our life styles along with our earnings growth, but delay it by 2 to 3 years – what happens then? The salary rise will go directly to our savings rather than for life upgrades and will increase our savings rate.

If the savings rate increases, the foundation of "wealth building" will be super strong. Think about it. If our whole life is 80 years, Its not really a big deal to delay our upgrades for 3-5 years. We are going to attain all these anyways. Its just that we are going to do it bit later. So, we have two choices. 1. Live in the moment by upgrading our lifestyle depending on our earnings growth. Or 1. Postpone the upgrades for a while and use that savings to build a strong nest egg so that we can even pass our wealth to next generation.

The choice is ours. Now we can see the benefits that we can get out of "Delayed Gratification" at high level. We will see how we can apply this strategically in different stages of life in next episode. Thank You..

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5 Best Fidelity Funds to Buy & Hold Forever

today we're going to talk about the five best fidelity funds to buy and hold forever hi if you're new to the channel my name is tay from financial tortoise where we learn to grow our wealth slow and steady in order to guide our conversation i'm going to use the three fund portfolio strategy to frame the fidelity funds i'm going to recommend in this video the three fund portfolio is one of the most popular do-it-yourself investment strategies and as the name implies it's made up of three simple funds most often an equities fund an international fund and a bond fund so all the funds i'm going to recommend today will fit into at least one of these slots the first fidelity fund you want to buy and hold forever is fidelity's u.s bond index fund fxnax it tracks the bloomberg barclays u.s aggregate bond index which is composed of investment-grade government bonds corporate bonds and mortgage-backed securities it holds approximately 8 400 bonds the top issuers are the u.s treasury or issuers of mortgage-backed securities like fannie mae and freddie mac it has an expense ratio of 0.025 percent which means if you have 10 000 invested in fidelity us bond index fund you're essentially paying 2 dollars and 50 cents for fidelity to manage this fund for you the fund started in 1990 and since then its average annual total return has been 5.33 percent so what are bonds and why do you need them in the simplest term bonds or loans when you buy bonds you're essentially loaning money to someone in this case to a company or a government agency and they're a very important addition to a well-constructed investment portfolio because of how different they are from stocks a good analogy i like to use to frame stocks versus bonds is this think of stocks as your core wealth building engine without it you aren't really going anywhere and bonds are like your brakes without it you could drive yourself off the road when you have bonds in your portfolio it helps to smooth out your investment ride because though they have lower returns they have less volatility during times of market crash where your stock investments can dip by 20 to 30 percent your bond investments will hold steady and ensure your right is so rocky so in order to help you smooth out your investment right you want to start adding them to your portfolio as you get closer to retirement age and if you're invested in fidelity consider fidelity u.s bond index fund as your core bond holding in your portfolio the second fidelity fund you want to buy and hold forever is fidelity total international index fund ftihx the fund tracks the msci all-country world index excluding the united states it represents approximately 5 000 international companies the top companies in this fund are made up of companies like taiwan semiconductor nestle and asml holdings it has an expense ratio of 0.06 percent which means that if you have 10 000 invested in ftihx you're essentially paying six dollars for fidelity to manage this fund for you the fund started in 2016 and since then its average annual total returns has been 5.99 what the fidelity total international index fund will do for you is provide you exposure to the international market outside the united states exposure to different countries sectors and even currencies and we can look at what happened to the japanese stock market as a lesson on why we might want to hold an international fund at the end of 1989 the japanese stock market's capitalized value was considered the largest in the world the nikkei 225 index the index of 225 largest publicly owned companies in japan reached an all-time high of close to 40 000.

Sadly 22 years later the nikkei was under 8 500 and to this day has yet to reach its all-time high again but satur is a japanese investor who failed to invest in international stocks outside of japan the us-based companies are currently the world leader in market capitalization and revenue but who can confidently say that will stay like that in the future it would be unfortunate but the same thing could happen to the u.s stock investors i personally still have strong confidence the u.s economy and u.s based companies as a whole but i also have to continuously check my assumptions financial writer larry swegel had a saying never treat the highly likely as certain and the highly unlikely as impossible as you get more comfortable with the international market you can start adding them to your portfolio and the fidelity total international index fund is a great option to represent your international holdings the third fidelity fund you want to buy and hold forever is fidelity zero total market index fund fzrox the fund tracks fidelity's in-house fidelity u.s total investable market index it represents approximately 2 700 u.s based companies the top holdings in this fund are apple microsoft and amazon it has an expense ratio of zero percent yes you heard me right zero dollars to invest in fidelity zero total market index fund thus the zero in its name the fund started in 2018 and since then its average annual total returns has been 11.82 the fidelity zero total market index fund is a total market index fund which means it tracks the total u.s stock market so this will be a great option as your core equities holding in your three fund portfolio however there are a couple things i do want to note with this fund especially in comparison to the two other equities options i'll cover here in a bit one is the fact that the index it is tracking is fidelity's in-house index fidelity u.s total investment market index this necessarily isn't a bad thing but there are actually more than 2 700 publicly traded companies in the united states than what this fund represents what this fund has done is exclude really small companies from its index in a big scheme of things this doesn't make that much of a difference in performance since the representation is based on market capitalization so the excluded companies would only represent maybe one percent or even less than that of the total fund but this is still something to note the total market here isn't quite the total market a second item to note with the fidelity zero total market index fund is the fact that you can't transfer your shares to another firm without selling your holdings and when you sell your holdings you have to pay taxes on your capital gains the fidelity zero total market index fund was designed with zero percent expense ratio in order to gain more customers so fidelity doesn't want you to move your money to a different firm and this limitation creates that barrier paying zero percent is nice but you won't understand that free comes with some strings attached but if you're planning to stay with fidelity for life fidelity zero total market index fund is a great equities fund to hold the fourth fidelity fund you want to buy and hold forever is fidelity total market index fund fskax the fund tracks the dow jones u.s total stock market index it represents approximately 4 000 u.s based companies the top holdings in the fund are apple microsoft and amazon essentially the same as fidelity zero total market index fund it has an expense ratio of 0.015 percent which means that if you had 10 000 invested in fidelity total market index fund you're essentially paying 1.50 for fidelity to manage this fund for you the fund started in 1997 and since then its average and annual total return has been 8.29 it's fidelity's original total market index fund prior to the introduction of fidelity zero total market index fund and fidelity total market index fund does exactly what his name implies invest in the total u.s stock market essentially every u.s based companies out there when it comes to investing in the stock market the key principle you want to abide by is diversification many people tend to think the only way to make money in the market is to beat the market by either selecting good stocks or good actively managed mutual funds unless you're a professional investor with hundreds of analysts working for you around the clock analysts who are constantly interviewing and researching companies and industries we can't win in the stock picking or fun picking game the odds are just stacked too high against the individual investor so the best strategy to beat wall street is to just track the market and at the lowest cost and fidelity total market index fund is a great fun to hold as your core equity is holding in your portfolio if you want more flexibility from the fidelity zero total market index fund the fifth fidelity fund you want to buy and hold forever is fidelity 500 index fund the fund tracks the s p 500 index which represents the 500 largest publicly traded companies in the united states at the time of this video there are exactly 508 publicly traded companies in this fund the top holdings in this fund are apple microsoft and amazon essentially the same as fidelity zero total market index fund and fidelity total market index fund not a surprise given the company representation is based on market capitalization and these big companies represent a good percentage of the market as a whole it has an expense ratio of 0.015 percent same as fidelity total market index fund so if you have ten thousand dollars invested in fidelity 500 index fund you're essentially paying dollar fifty for fidelity to manage the fund for you the fund is the oldest of the bunch it started in 1988 and since then its average annual total returns has been 10.66 percent when most people talk about the stock market they're most often referring to the standard and poor 500 not the total market index and the reason is because it's so much older it was created in 1926 when it began tracking 90 stocks and in 1957 the list expanded to 500 and for the past century it has been the go-to index to represent the stock market when you turn on any financial news reporters are always discussing how the s p 500 is up 50 points or down 100 points it essentially represents the 500 largest u.s corporations weighed by the value of the market capitalization and because it's weighted by market cap though there are approximately 4 000 publicly traded companies in the united states total these 500 stocks represent about 80 to 85 percent of market value of all u.s stocks and the weight within the index automatically adjusts based upon the changing stock prices to this day the s p 500 remains a standard to which professional mutual fund managers and investment firms compare their returns against so if you want your equities holding to match the performance the largest u.s stocks since they're essentially what moves the market hold fidelity 500 index fund as your core equities holding but i do want to say this whether you choose the fidelity 500 index fund the fidelity total market index fund or the fidelity zero total market index fund as your core equities holding you really can't go wrong with any one of them they're all great funds you just want to understand exactly what you're buying that's it guys i know i normally advocate for vanguard funds but sometimes you may not have the ability to choose the investment firm that you want because maybe your employer doesn't offer it that was the case for me and therefore most of my 401k is actually invested in fidelity fidelity is a great investment firm if you're looking to invest with them pick any of the five that i mentioned here and you can't go wrong if you'd like to learn more about the three fund portfolio and why you might want to consider it as your strategy check out my video here thank you guys for watching until next time all the best

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2 Laws for Generating Wealth

Any successful plan to generate and sustain
sufficient wealth must incorporate two very basic rules: 1) Generate Investible Savings. The first step to unlock the path to building
tremendous wealth is not about investing at all. It is about generating Investable assets. For most people this begins by terminating
any expensive debt such as credit card or high interest debt. The reason being that expensive debt increases
one’s expenses and eats into investable resources. Second step for most people is redefining
certain parts of their remaining income as compulsory payments that must be done. That payment is, in fact, the first step of
savings for investing. The third step for most people is to invest
time and entrepreneurial energy to increase their gross income. Getting a better job, a promotion, a new skill
or starting a business that can generate profits disconnected from your immediate personal
labor resources. The fourth step would be establishing some
kind of an emergency fund and getting sufficient insurance to cover yourself against unpredicted
expenses. When the four steps are done, you can start
generating sufficient investable assets that can be put to work growing over a minimal
period of five years.

When this is done, you can proceed to the
next rule. 2) Invest investable savings into exponentially
growing assets, growing for many years while limiting the taxes you pay. Once you generate investable assets and are
ready to put them to work, comes the next tough question: Where should I deploy my investable
assets to maximize my investment and to generate more wealth? You should know that any and all investable
assets you will ever encounter can belong to one or another of these two categories:
Exponentially Growing Assets or Regular Growth Assets.

If you ever hope to generate sufficient wealth
from your investable assets, you must learn how to separate your exponential growing assets
from your regular growth assets and then make sure you are sufficiently exposed to the exponentially
growing asset class. Exponentially growing assets are a rare creature
few understand, even among seasoned investors. There is a set of strict rules to become eligible
for the coveted title: A) At their very core, they must yield very
high returns on internally invested resources and expenses – such as inventory, labor, plant
& factory or R&D; What sets exponentially growing assets apart
from any and all investable assets is their ability to make a large profit on a small
base of required resources. The more expenses and investments one needs
to make a profit, the less profit is left to increase the value of the asset itself. B) They must have sufficiently large market opportunities
ahead of them to enable many years of sales growth displaying high returns on invested
resources; While many possible assets can generate high
rate of return, exponentially growing assets are not a one-off occurrence or limited activity
and must be able to maintain their course of growth over many years to build sufficient
appreciation for their owners.

C) They must provide extensive internal reinvestment
opportunities to use profits at similarly high returns To really become an exponentially growing
asset capable of building imaginary amounts of wealth, the asset must provide managers
the ability to use the rivers of cash generated regularly from the asset in a similar high
rate of return. When these criteria aren’t met, owners soon
realize the resulting rivers of profits do not grow at a high rate and the growth in
wealth soon slows down due to the ever-growing profits invested in lower rate growing assets.

D) They must be led by honest, high integrity,
talented managers, who are actually risking their own wealth alongside their investors. For these executives, a small increase in
the share price will generate much greater wealth than any increase to their paycheck. Executives of public companies have the ability
to loot the company’s coffers or engage in wealth destruction in an infinity of ways. To avoid that, check to see how large your
CEO’s stake in the company stock is before choosing any investment.

As long as the company still embodies the
4 rules that we covered here, you stay invested; this is the one last requirement when investing
in exponentially growing assets. ALL exponentially growing assets see their
stock price cut in half several times during the decades, usually due to different parameters
that don’t reflect the actual company value. Holding these assets through turbulences,
and even adding to them, requires temperament and familiar understanding of the business,
which results in the conviction to stay the course..

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Cars = #1 Wealth Killer

in today's video we're going to talk about the number one wealth killer in america our cars hi if you're new to the channel my name is tay from financial tortoise where we learn to grow our wealth slow and steady you might be thinking hey what are you talking about aren't there so many other things that should come before a car payment that is destroying our wealth how about the rising cost of health care or stagnating wages and what about the crazy inflation rate that is destroying our purchasing power yes all true and i don't disagree that many of these items impact our wealth in detrimental ways however if you can hear me out for the rest of this video i want to help you understand why i believe our cars are really the number one wealth killer here in the united states but first let's start out with some history lessons so we have context regarding cars in america let's face it we as americans are obsessed with cars and nothing says american as our cars these days it's hard to see the distinction between car culture and american culture as cars have become such a significant part of our lives since they first came to be and a big reason for why they stuck around for so long is that they're the epitome of status this allura status that keeps drivers hooked dates all the way back to the ford model t the first affordable american car that changed america as we know it over 100 years ago and since then cars have continued to represent itself as an extension of ourselves and therefore our identity and our status symbol a way to show the world how successful we are when someone parks their lamborghini right next to our 10 year old honda civic don't many of us think man what does this guy do for a living how is he so wealthy he is so cool in my mid-20s i made one of the biggest purchases of my life a brand new volvo s40 i had just gotten my recent promotion in the army and i was making decent money of course i was still living paycheck to paycheck i justified the purchase by saying that i deserved it and i worked hard for it and while that might have been true the truth is that i could have bought a much cheaper car and used that extra money to pay down debt or invest in my future but i didn't because i wanted that status symbol i wanted the car that would churn heads when i drove by now a volvo wasn't really associated with turning heads but at the time i sure felt like i was somebody and that is really the core problem with cars they're most often emotional purchases we buy them with our heart not with our heads and when we do that we often end up overpaying and making poor financial decisions just like i did all right now that you had a good laugh at my money mistakes let's actually look at some numbers and see how cars are literally killing our wealth let's try to understand the average cost of owning a car at the time of this video the average price of a new car in the united states is around 48 000 and given that most new cars are purchased financed the average monthly car payment hovers around 700 however when we consider the ongoing costs like insurance gas or maintenance the true cost of ownership is actually much higher and we aren't even factoring depreciation when purchasing a brand new car a new car can lose up to 20 of its value the moment you drive it off the lot and it doesn't stop there on average a car will lose about 11 percent of its value every year for the first five years so if you bought that 48 thousand dollar car in just five years it'll be worth less than half of what you paid for and after 10 years you'll be worth less than a third so it's not a surprise that many people are upside down on their car payments the bottom line is that car payments in general are a bad idea especially big car payments like 700 a month there might be unique situations where a car payment might make sense for example you originally plan on buying a new car with cash but you chose financing instead because they were offering a zero percent interest however these situations are not normal the vast majority of people aren't using car payments to help out their cash flow situation imagine an average person who started their first job at the age of 25 and settled into a 700 car payment for their entire life this person would trade his or her car over the years but would always have that car payment each time the car is paid off we would head straight to a dealership to pick up a new one and if we did this for 30 years we would have paid over 250 000 in car payments alone and in the end we would only have an older car worth almost nothing to show for it and worse as i mentioned earlier this figure doesn't include the extra money we paid for maintenance insurance and other associated costs with owning a car now imagine that we did something radical and decided to forego or reduce this hefty new car payment for our entire life we decided to purchase a smaller new car or a reliable used car or even more radical use alternate means of transportation and rented cars only when we needed one in these scenarios let's reduce our monthly car expense by half the national average car payment instead of spending 700 a month we instead spend 350 per month and we invest the extra 350 in a good low cost index fund for next 30 years how much do you think we'll have in our investments after 30 years at an average eight percent rate of return over half a million dollars the total contribution amount is around 126 000 but the compounding added close to additional four hundred thousand dollars for investments for half a million dollars i personally don't mind driving a humble economical vehicle versus a car that supposedly shows my wealth to the rest of the world that really doesn't care about me anyways car payments are not a way of life and if we think that since we had one ever since we could remember it's time to change that mindset it's easy to blame external factors for our life and money problems but what is interesting is that most often we blame everything else but our high car payments for our inability to get ahead we blame our employers for not giving us the raise we deserve or our parents for not educating us enough we blame health insurance premiums the price of groceries the housing market and even the price of gas but how often do we focus our efforts on high car payments most often not so many of us myself included have become socially conditioned to believe that a huge car payment is a fact of life because having a nice car is a way of life it's an extension of who we are we wouldn't go out to the mall wearing tattered clothes so how can we be on the road with a rundown vehicle we tell ourselves that everyone has a car payment and that is normal and okay and if we're going to have a car payment anyways we might as well get the car we want right this kind of thinking is so widespread and so embedded into our culture that it's almost an epidemic the fact is that we don't need to think this way and in actuality it is very harmful to think this way because it's detrimental to our wealth alright now that we recognize the detrimental impact of having a car payment is to our wealth what can we do let me share with you some practical tips number one tip is a bit general but it is to delay gratification or learning delayed gratification if this is something we struggle with and i totally empathize with people who like buying new cars if we're completely honest with ourselves myself included buying a new car is fun not only do you get to enjoy the coveted new car smell but you get to show off in front of your family and friends and no matter how much the privilege costs it feels so good to drive your new car off the lot and cruise down the street unfortunately that is a short term thinking as many of us myself included might have experienced first hand the new car smell the excitement you feel when you get to drive a new car to work i'm sorry to say but these feelings are temporary and they're fleeting after a fairly short amount of time the new car excitement turns into mundane uneventful reality soon your car isn't so new anymore it's just something that you drive to costco on a weekly basis if we want to do something different and build our wealth in the process we need to change our new car mindset let's learn to delay gratification if you currently have a car and have been thinking about getting a new one see if you can drag it out for several more years the simple act of delayed gratification can mean hundreds of thousands of dollars in the long run second tip is a bit more practical and that is to consider buying used as i mentioned earlier one of the greatest negative financial impact of buying a new car is its depreciation a new car can literally lose up to 20 of his value the moment you drive it off the parking lot after five years it'll be worth no more than half of its original value a used vehicle depreciates at a much slower rate than a new vehicle this is because once you're behind the will of the car it will have already gone through the majority of its depreciation and it's much cheaper thus your monthly payment if you choose to finance will be much lower if you're worried about the condition of a used vehicle because you never purchased one consider a certified pre-owned vehicle you'll still save money by buying a used car but gain additional confidence the reliability of the vehicle in essence certified pre-owned or cpo are vehicles that meet manufacturers establish standards and carry some form of guarantee against defects similar to a new car warranty the third tip is to never lease a car leasing a car is tempting because the monthly payments are much lower than purchasing a car however it gets quite expensive in the long run when you lease you're basically paying for the use of the vehicle for the first two to three years of his life when the car depreciates the most when your lease is over you either have to lease another car or purchase one starting the cycle all over again buying a new car might be expensive initially but once you paid off the loans you at least own the car and won't have any car payments as long as you continue to drive it with leasing you don't have this option you will always have a car payment the fourth tip may sound a bit extreme but is to consider no car if you live in an area where there is a good public transportation and you don't have to commute long distance for work it might be feasible to ditch your car altogether not only will you save on car payments but you also save on gas insurance and maintenance cost it may not be the most glamorous solution but it is a practical one that can free up a significant amount of money each month cars are one of the biggest wealth killers out there if you really want to build true wealth you need to be mindful of your car choices and avoid the temptation to overspend there's nothing wrong with owning a car but there is something wrong with letting the car own you think carefully about your needs and make smart financial choices that will help you grow your wealth over time thank you guys for watching if you'd like to learn more about some other ways to save money check out a few of my videos here until next time all the best [Music]

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Retirement Planning FACTORS | Age and Income

what to look for when selecting the right 
retirement plan so age is a big factor when   it comes to deciding which plan is right for you 
if you're offered a pension that's fantastic not   many companies do offer those nowadays however 
if you have the benefit of getting one then yes   take it but I also think you should also have a 
retirement plan in addition to your pension just   to diversify your savings another situation to 
consider is your financial situation so someone   with a higher income level is most likely going 
to want to prefer choosing their own retirement   plan because then they're going to be able to 
not only write off those contributions but also   distribute it later in life so it maximizes their 
potential to not incur penalties or other taxable   income kind of situations essentially the more 
money you make you're looking for more write-offs   you're looking to claim less you're looking to 
you know have security but you got to be a little   more deaf and clever in how you're taking your 
distributions so to not trigger taxable events

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