Tag: personal finance
The $65,000 Roth IRA Mistake To Avoid
Jason 0 Comments Retire Wealthy Retirement Planning
– I've seen too many of
you making some mistakes when it comes to investing
in your Roth IRA. One of them could cost you
$65,000 and the other one could cost you almost $500,000. You guys are seriously going
to make my beard turn more gray than it already is if
you don't knock it off. So let me show you what to watch out for, that way, you don't lose more money than you have to and
I can save a few bucks on hair dye for a couple more years. A Roth IRA is a self-directed
retirement account where you can contribute after
tax dollars to be invested. Since the money going in is taxed, the growth of your investments are not taxed and the money withdrawal from the account are never taxed either, as long as you don't try to pull out some of the money before the age of 59.5. There is no such thing
as a joint Roth IRA. So if you and your spouse
want to contribute to one, then you'll have to do it individually, hence the name Individual
Retirement Account.
If you both have enough
earned income separately, then you can each invest up to the $6500 limit for the year. If one of you works and the other doesn't, but you file a joint tax return, then the person working can, of course, contribute to a Roth IRA and
your spouse can contribute to a Spousal Roth IRA as well. Remember, these accounts are
owned by the individual person and on paper, not co-owned by both people. I want to try to encourage you to max out your Roth IRA every single year, if possible, because if you
don't do it for that year, then in the future you
cannot go back and contribute for a previous year once that time limit has passed. A Roth IRA is one of those accounts where I would bend over backwards to make sure that I can
put in the full amount allowed every single year.
In my order of operations for
what to do with your money, I have maxing out a Roth
IRA right after investing up to your employer match and HSA. That is how important
this type of account is. The good news with this
is that you actually have a timeframe of 16
months to contribute for each calendar year. So if we are in 2023
right now, then you have from January 1st, 2023, up until
when taxes need to be filed for that year to contribute,
which in this case, would be April 15th, 2024. That's how it is every single year, so ignore the actual dates in my example and pay more attention to the timeframes since the date taxes are due
will change by a few days from year to year. Most brokerages will ask
you which year you want to contribute to. For example, I personally
invest using M1 Finance, which you can check out down
in the description below, and also get a deposit bonus as well.
If I contributed to my Roth
IRA through them right now, then they would ask if I wanted the money to go towards 2022 or 2023, since at the time of recording this, we haven't hit the date
where taxes are due. This is great because it
gives you some extra time beyond the current year to
contribute Roth IRA money for that year. Before I tell you the next mistake that I see way too many people making, please help support my dog Molly by hitting that thumbs up
button and sharing this video with anyone you think it would help. Once you deposit money into your Roth IRA, there's one more extremely important step you need to do that I see a ton of people missing, and that is
actually investing the money.
I can't tell you how
many people I've talked to over the years who just put money into the account assuming
it would automatically grow, or knowing that they
needed to invest the money, but just forgetting to do
it because life happens, and things naturally slip out of our mind, only to check their account
balance years later, realizing that it hasn't grown in value because they didn't invest the money. Stop the nonsense here and
just set up auto investing within your investment account, and if you're waiting because you think that you can time the market
to buy in at a lower price, you can't, because it's
nearly impossible to do, so just to get the money
invested right now. If you know how you want to
invest the money, then great. If you don't, then I personally
like the two fund portfolio for people who are in
the accumulation phase of investing and in the
three fund portfolio for when you're closer to
retirement or in retirement.
I'll have a link to a
playlist then I made just for you where I teach you
about both of those portfolios down in the description below
and above my head as well. When you contribute to a Roth IRA, all of your money is not
locked up until 59.5. You can withdraw the
contributions that you've made before that age without paying a penalty, but you cannot withdraw any of
the gains within the account. For example, if you've contributed $6500 and the account has grown to $10,000, then you can withdraw
the $6500 contribution, but you cannot touch the $3500 gain without paying a penalty until 59.5. I've gotta interject for a second to give my personal opinion on this.
While withdrawing money
penalty-free is an option, I want to encourage you not to do this. To be brutally honest, I think that doing this
is one of the dumbest, most irresponsible, short-sighted
things that you can do. Withdrawing just $6500
worth of contributions would cost you $65,000 in
future investment growth. So when any money is
taken out of this account before retirement, think
about how it's actually going to cost you 7,800 Chipotle burritos, or 65 new Apple iPhones, or anything else that you would buy for that amount of money. And yes, I am fully aware
that you can do a penalty-free early withdrawal up to
$10,000 before the age of 59.5 for a first time home purchase. But this is just as stupid as withdrawing your contributions early
because that $10,000 is costing you over $100,000
in future investment growth when you pull that money out. Average annual home appreciation over the past 12 years has been 6.11%, and the US stock market
has returned 12.27%. Leave your money in the freaking Roth IRA and go earn that $10,000 that
you need to buy the home. Responsible investing takes time, like five or 10-plus years, and this money needs time to grow. The second you withdraw
any of your contributions, you are cutting down that tree before it even has a chance to grow fruit.
Once you withdraw
contributions from the past, you cannot replace that
money in the future. I get that emergencies happen in life, so that's why you need
to have money set aside in an emergency fund to
pay for those things. Do not, under 99.999% of circumstances, use your Roth IRA money for anything other than when you retire. One thing I see way too many people doing is investing in a
taxable brokerage account before they have their Roth
IRA maxed out for the year. This is a huge mistake from a tax savings
perspective for some of you because of how each account is taxed. With a Roth IRA, you invest with money
that's already been taxed, so the money can grow tax-free
and be withdrawn tax-free. With a taxable brokerage
account, you are paying taxes for the ongoing dividend
distributions every single year. Then you have to pay capital gains tax when you go to withdraw the money. Since the money within
a Roth IRA will grow and can be withdrawn tax-free, realistically, you want
this account to get as large as possible, but not at the expense of
your personal risk tolerance.
You should not take on
additional levels of risk by investing in more
risky, unprofitable stocks that random YouTubers have been pumping over the past few years or actively manage funds to
try to achieve higher returns. 99% of people, including
myself, cannot handle investing in something with a
high risk and potential, potential, high return. So don't even bother. The money in this account
is for retirement, so is it really worth it to risk that 60-year-old's financial wellbeing because you decided to gamble with their money right now? I doubt it.
Some of you might be over
the income limit to be able to contribute to a Roth IRA, or some of you will be at
that point in the future as your income grows. You can still contribute to a Roth IRA to take advantage of the tax-free growth by doing a backdoor Roth. To simply explain the process,
all you do is contribute to a traditional IRA. Do not invest the money yet. Then contact your brokerage
to have them convert the money to a Roth IRA. Now, I have done it with M1 Finance before and it was extremely easy. It only took I think two or three days for the money to get into my Roth IRA. Only do this if it makes sense based on your current tax rates
and future financial plans.
There's two things that you can do. if you are someone who thinks that you might be over the income limit, but you are not going to 100%
know until the year is over. Number one, you can
either wait until January of the following year,
like we talked about in one of the previous mistakes that
I mentioned, or number two, you can just contribute the
money to a traditional IRA, then do a backdoor Roth within
the year to get the money into the account so it can be invested. That way, if you are
over the income limit, you've already done the backdoor Roth. If you're under the income limit, no big deal 'cause you had to pay taxes on that money that was going
into the Roth IRA anyways. A question I get a lot is
whether or not you can contribute to a Roth IRA on different brokerages.
The simple answer is yes. This is how it would play out. You can contribute up to the max for one year
on, say, M1 Finance. Then you can decide to contribute up to the max on fidelity the next year. Then you can contribute up to the max on Vanguard the following year. So by the end of that third year, you would have three different Roth IRAs with three different brokerages, and there is no problem with that. You can take it one step further. If you decide, hey, out of these three, I actually like M1 finance
better than the other two, you can convert the
Roth IRAs with Fidelity and Vanguard into your
M1 Finance Roth IRA. You can also split up your contribution for the same year among
different brokerages. So if for this year you want
to say contribute $4,000 to an M1 Finance Roth IRA and the remaining $2,500
into a Fidelity Roth IRA, then you can do that without any problems.
The only thing you
cannot do is try to game the system by saying contributing $6500 into an M1 Finance Roth IRA and $6500 into a Roth IRA with another brokerage. You cannot exceed the maximum
amount allowed per year across all of your Roth IRAs on all of your brokerage accounts. Technically, you could do that since all of the brokerages aren't talking
to each other to keep track of what you are contributing, so you have to self-manage this. I would highly, highly recommend making sure
that you do not do this, whether it's on purpose or on accident. I don't know what the penalty is for this, but all I know is that you do
not want to get caught trying to defraud the government
in any way, shape, or form. Long-term investing is the name
of the game with a Roth IRA. This money is for when
you are in retirement, so make sure to take that into account when investing this money. No gambling it on stocks
that random YouTubers are promoting. I think the two or three fund portfolio is perfect for your Roth IRA, which you can learn more about
in these videos to your left.
There's a bunch of free stocks and resources down in
the description below to help with all of your personal finance and investing needs. I'll see you in the next one, friends, go..
How We Retired Early With $540K At 40 In Colorado
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
I started getting
diagnosed with some fairly serious medical
ailments. I just began to realize
that I had been working for a retirement that I
may never enjoy. We just knew we wanted
the freedom to make our own choices with our
time. And that's where
financial independence came in. Then it turned
into how fast can we do this? Let's get it done
as fast as we can. We started to accumulate
real estate in the vein of let's have an
additional source of income besides my job. We accumulated 19 units
over the span of just from 2016 to 2019. I'm Debbie and I'm Chris. We are 43 and live in
Colorado and retired by the age of 40. I never wanted to be a
millionaire. That was never a goal,
even, you know, now in my forties, I just wanted
to have enough money to be able to pay my bills. When I was 21, 22,
somewhere in there, I remember reading The
Millionaire Next Door. It was eye opening to me
because the stories they highlighted in that book
were very similar to what we do. Once it became in
that realm of reality that I could maybe be a
millionaire, then I did become fascinated with
the idea of being a millionaire in both
healthy and unhealthy ways.
Once Debbie left her
job, we're now completely dependent on my job. Honestly, like, I'm sure
there was more than this, but I tell the story
that basically I just stopped going to Subway. Obviously, that's not
the whole case, but that's all it really
felt like. Once we started tracking
our spending a little bit better with budgeting, I
was the guy that was always trying to turn
the knob down on our spending. Chris used to think it
was fun to like try to spend $100 a month on
groceries and just eat what came out of the
pantry.
So we both kind of had
this thought, what if you want to leave your job
someday? That thought easily
turned into how can we use our money to buy us
more time? I was mainly hearing a
lot of stories about rental real estate. Some people were were
building mega empires with rental real estate.
I wasn't looking to do that. I just wanted to
have additional income. And in the in the
process of going from we don't know anything
about being landlords and real estate owners to
let's buy our first property, I scoured the
Internet and spent a lot of time listening to
podcasts, watching YouTube videos, reading
blogs and forums.
And we got this like
eight and a half by eleven vision board type
of thing. So it was just something
that we could write on with chalk that we had
in our kitchen that would remind us of our goals. And, and as I was
writing those goals down, I believe we had like by
the end of 2016, we were going to have two
properties and by the end of 2017 we were going to
have four properties. We were getting
properties that other people didn't want. There was something that
was a bit of an ugly duckling about them. For me, a very difficult
part of this was a lot of elbow grease, fixing up
the ugly things, working on the houses, getting
smoke, smells out, painting everything,
tearing a bunch of flooring out. I'm
spending full days over there. Chris is getting
off work. He's spending nights and
weekends over at these rental properties to get
them ready for tenants and make them nice
places to live.
And as we were doing
that, I'm still saving 50 to 60% of our income
through my paycheck. All the extra money we
weren't spending out of your paycheck was going
toward buying more rental homes. All of the cash
flow we were getting from rentals was going toward
buying more rental homes. We accumulated 19 units
over the span of just from 2016 to 2019.
So it was a pretty
pretty fast and furious four years. We actually ended up
reaching fire at least three years earlier than
we had projected. So gross income from our
rental properties can vary based on vacancy,
capital expenditure, rehab, repairs, those
kinds of things. But it is between 8 to
10000 per month and our net income from our
rental properties is between 4 to 6000 a
month. So the money we live off
of comes purely from our real estate investments. We do have mortgages on
all of our rental properties that we
consider business debt. Our tenants pay those
mortgages for us essentially, and rents
continue to rise as they do so as the mortgage
goes down. Right now, our
investments look like we have about $350,000 in a
combination of traditional IRAs and
Roth IRAs and a brokerage account, $35,000 set
aside in a 529 account for our girls and
another $20,000 in bonds.
The insurance that she
sells for one month a year provides that extra
cushion of safety or comfort, as well as some
other discretionary spending. Our budget now
in FIRE, it looks very similar to what it was
pre FIRE in that none of our categories really
went any different direction except for
travel. We usually have about
$10,000 in our travel budget over the course
of any time, and it's more than we spend. Instead of having a job
where I would work 48 weeks a year and have
four weeks off, I would say now that I work
probably four weeks a year and have 48 weeks
off.
And we found in our lives
that meaning and purpose are important to our
emotional and physical health. And part of that
is around work. We are really enjoying
having this freedom of time to make
connections, to travel and explore. Our
daughters are getting older whether we like it
or not. They'll be graduating
and I'm excited to be a part of of their lives
as they move forward into their next chapters and
have the abundance of time to be able to be in
their lives as much as they will allow us or as
much as as feels comfortable.
I think when we were
searching for financial independence, what we
wanted was freedom and independence from having
to go to a place and do with things someone else
told us to do. And we still want that
and we value that. But I think what we
found through it is a much deeper, fuller,
richer life..
How To Retire At 30 Living Off Investments
Jason 0 Comments Retire Wealthy Retirement Planning
in order to live off of
your investments completely. And I know that the title of this video may sound crazy about retiring by 30, and there are a lot of people
out there selling a pipe dream of you can retire by 30
as long as you invest in this course, or go buy real estate and while that may work for some people I'm not here to sell you guys a course or to pitch you on any
kind of product like that. What we're going to
simply talk about here is how much money you need to have invested in order to live off of your investments and essentially not have
to work to earn your money. And believe it or not, there's
actually countless people out there who have in fact
retired as early as 30 years old, by following this exact strategy
that I'm going to outline. So if this idea of retiring early and not having to work for your money is something that interests you. What I want to ask you
guys to do is go ahead and drop a like on this
video just show your support.
I really do appreciate
that as it helps out with the algorithm and allows this video to get shared with more people. But what we're going to look
at in particular in this video is something called the 4% rule, and that essentially
shows you just how much money you need to have set aside, in order to live
off of your investments. Now you can in fact live off of different types of investments like real estate or the stock market for
example or a business that's providing income for you. But what we're going to use in this video as an example is a passive
stock market investment, and we'll show you exactly
how much money you need to have invested in order
to live off of that income. So the goal here with this
strategy is to simply invest your money and have a large
amount of money invested and then you would
essentially be living off of the interest income or
the growth of that money without touching the principle.
And as I'm sure you guys can imagine if you're not touching the principle or your initial investment, then your money could
foreseeably last forever. Now, the sooner you're able to retire is all based on how much
money you're able to save up and how little money you are
spending each and every month, and there's actually a
whole movement of people that are following this
exact strategy, and it's something out there called FIRE, and FIRE stands for financial
independence retire early. And there's a lot of
people who are doing blogs and videos and all kinds of
stuff about this concept, and there are countless
examples out there, of people who have retired
as early as 30 or even less. By following these strategies. Alright guys so there's
basically three steps you have to follow in order to do this, and as I'm sure you can imagine, step number one is to be frugal or to spend as little money as possible, because ultimately what
you're looking to do is save and invest enough
money that the interest or the dividends, or
whatever the growth is pays for your monthly living expenses.
And as I'm sure you guys can guess if your monthly expenses
are $6,000 versus $3,000, you're going to need a
lot more money invested to cover those expenses. So being frugal and saving
as much money as possible is actually going to serve
two different purposes here. Well, number one, the
less that you're living on the more of your paycheck
you're able to save up, and the more of your paycheck
you're able to save up, the more you're able to
contribute to that freedom fund, which will eventually be paying for all of your living expenses. And then second of all by spending as little money as possible
every single month, you actually don't need
to save up as much money to potentially live off of the interest or the growth of your money.
And we're going to go over
those exact numbers right now. Alright guys so step number two
that you have to follow here is going to be a tough one, but that is going to be saving 50 to 70% of your take home income and again, if you're looking to
retire by 30 years old, let's say you want to work from 20 to 30, and then not work for
the rest of your life, you're going to have to take
some drastic actions here.
And that is why you need to live off of a microscopic amount of money. And that's why step number
one is so important, by cutting down as much as possible on those monthly expenses. So people who are trying to do this, you're not going to see
them driving brand new cars, you're not going to see
them going on vacations, they're probably going to be,
you know, eating canned beans and doing campfires in the
backyard as summer entertainment. Not that there's anything wrong with that, but they are literally spending
as little money as possible, because they're focusing
on the long term picture of what they are trying to do. So people who are following
this FIRE movement are often aiming to save 30
times their annual expenses, and that will allow them to
withdraw about 4% per year without basically touching that principle and that is where that
4% rule comes into play.
And that is basically where you're able to draw from an account about 4% per year, and over a long period of
time based on the growth of that account and those investments, it shouldn't be chipping
away at the principle which should in theory
give you unlimited money. So what you're aiming
to do here is to lower your monthly expenses as much as possible.
Figure out what it costs
you to live per year, multiply that by 30, and then
save up that amount of money by saving 50 to 70% of your
paycheck every single week or month, or however often
you are getting paid. Alright so now the question
you guys have been waiting for, just how much money do
you need to have saved up and invested to live off of that money following the 4% rule. Well if your annual expenses
are $20,000 per year, they would recommend having 30 times that amount of money saved and
invested, so $600,000. If your annual expenses were $35,000, that number becomes 1.05 million. If you're somebody
spending $50,000 per year on your living expenses
you would need to have $1.5 million saved and invested,
and for the final figure here, if you spent $100,000 per
year on cars and housing and food and all of that,
you would need to have about $3 million to successfully
follow this strategy.
So I'm sure this goes without saying guys, the best way to follow the strategy and to reach that retirement as quickly as possible is going to be
to keep your monthly expenses as low as possible. And just to put it in
perspective for you guys, every additional $100
that you spend per month, if you follow this is
an additional $36,000 you need to have set
aside in that freedom fund to support that $100 of monthly spending. So if you're serious
about this and you want to retire at 30, or even younger, you are spending literally as little money as humanly possible. Alright so the final step
to following this strategy is going to be passively
investing in the stock market. So most people following this strategy are actually following
the Warren Buffett style of passively investing in index funds. And if you're not familiar,
index funds are basically a way for you to have diversified
exposure to the stock market. Where you're not essentially
picking what stocks are going to outperform,
you're just passively owning the entire market.
So people following this strategy are not out there trying
to beat the market, they are not stock
traders or stock pickers they simply passively invest
in these low fee index funds, one of the most popular ones being VOO or the vanguard 500 fund. And essentially what you are doing, is buying a small piece of the 500 largest publicly traded companies out there, and all the different
dividends those companies pay are all collectively put together, and then you earn a quarterly
dividend from that ETF.
And over the last hundred
years or so the stock market, on average, has returned
about eight to 10% per year. So if you were only drawing
4% from that account, based on historical data, you should never be
touching that principle over a long period of time. And that is how you would
be able to live off of 30 times your annual income, if you save that money and invest it. Now that being said that
is the perfect segue into the sponsor for this
video which is Webull. So if you guys are
interested in getting started with investing in the stock market, this is a totally commission
free broker out there, meaning you're not paying
any fees to please trades with them and you can
purchase the Vanguard 500 ETF that we're talking about in this video right on that Webull platform, and not only that, they're
willing to give you up to two completely free stocks just for opening up an account with them. Number one, if you open the account, you're going to get a free
stock worth up to $250, and then when you fund the account, you'll get an additional
stock worth up to 1000.
So if you do the math there, that is two completely free stocks worth up to $1,250. Now I am affiliated with Webull, so I do earn a commission in the process if you use my link, but
if you guys are interested in grabbing two completely free stocks that is going to be down
in the description below. So finally, the last
thing I want to do here is to put all of this together, and go through a real
example of how you could in fact follow this strategy and even retire by 30.
Now again, this is going to
require some very drastic saving because essentially you're trying to work for about 10 years of your life and then not have to work
for the rest of your life. So most people will never
be able to accomplish this, because of the amount of
sacrifice that is required, with that being said, let's go ahead and run
through the numbers now. So let's say you're earning
a salary of $75,000 per year from your job, and ideally,
you don't have any, you know school loans,
student loans, medical bills, or anything like that. So you haven't gotten
sucked into the consumerism and you don't have like a brand new car so your expenses are as low as possible.
And I know this sounds like
you know theoretical situation, but this was actually
about the same situation I was in, when I graduated
college I was 20 years old, now I was making about $68,000, so a little bit less, but I had no debts, I had no car payment,
and so I was somebody who could have potentially
followed this strategy. So after you pay your
taxes, your take home pay is going to be around $56,250. Now we know already in
order to pull this off, you need to save 50 to
70% of that take home pay in order to actually build up enough money to live off of that income. So we're going to assume
you are saving 70% of that take home pay. So you would need to live off of 30% of that post tax income, which
amounts to just over $16,000, or around $1400 per month.
Now, is that possible? It absolutely is. Is it easy? Absolutely not, you're certainly not going to be going out to the
bar and buying beers or going out to dinner,
you're probably going to be living in a tiny apartment driving an old car and eating at home for breakfast, lunch, and dinner. But if that type of
sacrifice is worth it to you for the long term picture, it is something you may
be willing to do yourself. So each year you would
be saving and investing a staggering amount of money, which is 70% of your take home pay
or just over a $39,000. And that is how you would
be able to pull this off, and assuming you kept that
cost of living the same at around $16,000, just over 16,000. your freedom number, or 30
times your annual expenses, would be just over $506,000. So, how long would it take
you to save up that money? Let's go ahead and answer that now.
Well if you took that
$39,375 per year of money that you are saving and
invested in the stock market, earning 8% return, and
as we said, historically, it's an eight to 10% so we're going to go on the conservative side, well in 10 years at 8%
return career you would have $570,408.40, meaning you could then, if you kept those living
expenses the same, following that 4% rule, not have to work for your
money past that point.
And just to circle back
guys what this really comes down to is the level
of sacrifice involved. Are you really willing to live
off of about $1400 per month, or do you want to have vacations and going out to get dinner
and things like that? So it's not people who are doing this that are out there traveling and dining it's people that are living
as frugal as possible and finding enjoyment
in other areas of life other than just, you know,
spending money on dining and things like that. Now, is this a strategy I
would personally follow? Probably not because I
am one of those people that enjoys traveling, I enjoy dining, and I do spend a little bit
more than the average person, so my freedom number would be
multiple millions of dollars, but instead I follow the
strategy of earning as much as possible and saving a
lot of that earned money, and then eventually allowing
that to supplement my income by having that interest
or the growth of my money paying for a lot of
those things that I want.
And believe it or not,
guys, there are honestly countless people out
there that have followed this exact strategy and
retired at 30 or less. One of the most well known people being Mr. Money Mustache, he has a whole blog where he documented this whole journey of becoming financially
independent and retiring early with both him and his wife. So I'm going to link up his blog down in the description below
as well as a couple of other stories about
people who have followed this exact strategy and
retired at 30 or less. So that's going to wrap
up this video guys, thanks so much for watching. If you're new to this channel, make sure you subscribe and
hit that bell for notifications so you don't miss future videos, and I hope to see you in the next one..
Your Tell-All Guide to Saving for Retirement
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
I'm Britt, the co-founder of Dow Janes, and
every single week I have someone asked me how they can start saving for retirement
or how much they need or if it's too late to start saving. Today, I'm going to share my
top tips for starting to save for retirement. And don't worry; it's easier than you think.
If you want more ideas for saving, investing, and making the most of your money,
don't forget to hit the subscribe button and the bell so you don't miss any new
videos. And if you liked this video, definitely give it a thumbs up.
All right. So, there are some misconceptions about retirement saving that I want to address.
First, one thing people often ask us is how much do I need for retirement? What's the magic number?
And the truth is it varies widely.
It depends on where you want to live or what lifestyle you
want to have or when you want to retire. Are you trying to retire at 40 or at 70?0.
If you take anything away from today, I want you to just start saving 20% of your pre-tax
income for your retirement, and you'll be fine. To learn more though, keep listening.
Okay. So how do you start saving for retirement? What you do is you follow the roadmap
steps. You make sure you're doing things in the right order. So we have a whole nother video
on the roadmap steps, but just to recap, the first thing you want to do is make sure
you're spending less than you make each month.
The second thing is to pay off any
high-interest rate debt you have, which is anything with an interest rate over 7%, then
you want to build up an emergency fund.
And then once you have those three things in place,
you're ready to start saving for retirement. So, to do that, you're going to find your monthly
savings number. You can use a simple retirement calculator to figure out how much you want to have
in retirement. I'll link to one in the description below. What you'll do is you'll add in your
current savings, anything you've already saved for retirement already, anything you expect to get
from social security, and then you'll adjust the savings amount to see exactly how much you need
to save each month to be on track, to meet your retirement goals. It's a super easy calculator,
you just enter the numbers. It'll spit out exactly what you need to do, and that number, that savings
amount, that's going to be your monthly goal.
So, if you don't already have an account,
you'll open up a retirement account, and that's where you'll begin to transfer that
savings amount to that account each month.
Where should you save your money? There are
different types of retirement accounts.
So, if your employer offers matching, then you'll
want to open a 401(k) or 403(b). In addition, you can open a Roth IRA or a traditional IRA.
IRA stands for Individual Retirement Account. If you're self-employed, you can also open a SEP
IRA. So for the Roth traditional or SEP IRAs, you can open those at any brokerage places
like Vanguard, Charles Schwab, Fidelity, or with a robo-advisor like Wealthfront or
Betterment. Any of those places offer retirement accounts. So, it's super easy to get started.
Then if your employer offers 401(k) matching, you definitely want to advantage of that.
So, what is 401(k) matching? It's when you save money for your retirement and your company
contributes the same amount that you save. They'll often match up to a certain amount
or a certain percentage of your salary.
So, if your company matches 4% of your
salary and you make $5,000 per month, you could contribute $200 per month towards your
retirement, and your company would contribute an additional $200 per month.
So you basically get
$200 in retirement money for free each month.
It's a way for companies to incentivize
their employees to save for retirement. So, if your employer offers this, definitely take
advantage of it. It's the easiest free money out there. And make sure you're contributing the
maximum amount that they're willing to match.
Okay. The next thing you'll do, if your employer
doesn't offer matching, or if you're, um, if you've already maxed that out, the next thing
you want to do is max out your contribution to your Roth or your traditional IRA. So, each year,
the IRS limits the amount that you're allowed to contribute. In 2021, the amount is $6,000.
If you're over 50, you have an extra bonus. You can contribute $7,000. So, try to contribute the
maximum amount to those accounts each year. So, max out your 401(k) to where your company matches
max out your Roth or your traditional IRA. If you're self-employed, you could also contribute to
your SEP IRA. If you're a great saver and you're saving more than those amounts, you can open
your own brokerage account.
So, a non-retirement account, and save the money there. You can use
that money for whatever you want, but you can know that you're saving that for retirement.
Once you've saved the money in those accounts, what you're going to do is invest that savings. So
for the easiest and simplest way to get invested, you'll invest in target date funds. These
are pre-made portfolios that allocate your money to a mix of stocks and bonds that
are appropriate based on your age.
If you want to invest in index funds yourself,
or if you're picking a fund that your employer offers, then you can use these rules of thumb.
Generally, you want your portfolio to be invested in the percentage of stocks that is equal to
120 minus your age.
So if you're 20 or younger, you want to have 100% of your portfolio
in stocks. If you're 30, you want 90% in stocks, for example. And just a quick
note that if you invest in target date funds, that will do that for you. The allocation
changes the allocation of stocks and bonds changes over time as you get older.
One quick thing to know is that you actually don't need to take your money, your
retirement money, out the year that you retire. You can leave it invested while you're in
retirement and just take out what you need, which means you actually have more time
than you think for your money to grow.
So, hopefully that gives you some peace of mind.
If you're getting started later in the game, if you're wondering how much you should be
saving in retirement savings each month, we have a couple of rules of thumb for you.
And
the bottom line is the sooner you start saving for retirement, the less you actually have to save,
because if you start sooner and you invest that money, it will grow and it will grow over a longer
period of time. If you're starting later in life, you have to save more because it has less
time to grow. So, if you're in your twenties, you can save 15% of your pre-tax income each
month and you'll be set. If you're starting in your thirties, you want to save 20% of your
pre-tax income. If you don't have anything saved and you're just starting to save for retirement in
your forties or your fifties, you'll need to save even more since you're starting later and your
money has less time to grow. If this is you, watch out for our next video on how to start saving
for retirement if you're in your fifties.
All right, the sooner you start saving for
retirement, the easier it is.
So, here's a recap of the steps: One, follow our wealth building
roadmap, so you know what to do in what order. Two, find your monthly savings. Number three, open
a retirement account. Four, take advantage of free money. Five, max out your contributions. Six,
invest your retirement savings, and seven, contribute to your retirement savings each
month. If you want to learn more about how to build your wealth and invest your retirement
savings, then definitely check out our webinar, Think Like an Investor. The link's in the comment
below.
All right. Thanks for watching..
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Is 1 Crore Enough To Retire? How to plan your retirement?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
Hi friends, welcome to Yadnya investment academy. We are going to talk about a topic of financial planning on Friday. And today's topic is very interesting. Because this question is asked regularly on many social media channels and workshops. That people have an amount in their mind that is 1 crore rupees. We think that if we have 1 crore rupees, our life will be good. So this question remains in the mind that if I have 1 crore rupees, can I retire now? Am I financially free? I don't have any tension of retirement now. Now whatever work I am doing is extra. So that 1 crore rupees is enough. And if you have retired now and got EPF money and total is 1 crore is it enough for you? And if it is enough or not, how much can you spend in both questions, when is enough and when is not.
We will touch on all those things in this video. I will explain everything through a calculator. You can check that calculator on our website investyadnya.in as well. We cover many topics of financial planning in this session. If you want to make your own financial plan, then go to investyadnya.in website There are many products related to financial planning. There are 1 to 1 sessions as well. You can check that out. Now I am going to my website and I am sure you can see my screen. If you go to the tool and calculator, here you can see the retirement calculator.
I don't think you will get this anywhere else. Now the question is, suppose I have 1 crore rupees, is it enough for me to retire? First of all, I will be asked what is my age? I am just giving an example, 50. Suppose I am 50 years old, what is my life expectancy? It is important to know when you will be retiring. I think we should keep it around 90. I am keeping it at 90. How much is the expense now? If you are retiring and you have 1 crore rupees, how much do you want to spend? What is your monthly or annual expense? Suppose I am thinking that I have 6 lakh rupees. I have put 6 lakh rupees here. How much inflation are you assuming? How much will my expenses increase every year? If India's inflation is around 6-7%, then you can assume that. Suppose 7% inflation till the end of life. Current asset, how much money do I have? I will put 1 crore rupees here. I have 1 crore rupees here. I will put that here. How do you invest this 1 crore rupees? How much return will you be able to earn? This is a very important question.
What type of investment do you want to put? Do you want to put it in PPF? Do you want to put it in Senior Citizen Savings Scheme? Or do you want to put it in FDs? Or do you want to create a portfolio of Mutual Funds like Hybrid Equity Funds? This is very important. Let's take all the scenarios. Suppose I want to put it in FDs. I don't want to do anything special. I will get 7% return in FDs. Whatever is the post tax. Or whatever you think.
You get 7.5% but let's keep 7% for calculation. Let's keep 7.5%. Let's keep 8%. We have put it in bonds, Senior Citizen Savings Scheme. And there is some money in EPF. So, we have kept some money in equity. So, my 8% will earn 1 crore rupees corpus. Which is 1% over inflation. I have taken 7% inflation and 8% returns. I have to put these 6 fields first. If I submit this, My retirement corpus is in deficit of 1 crore. This means that I need 1 crore more to develop this scenario. If I am 50 years old and I have 6 lakhs per month. And 7% inflation. And 8% growth. I need 2 crores. 1 crore is not enough. Now, let's change the scenario. What should I do if I am not able to do it.
I can either reduce it. I don't spend Rs 50,000 per month. I can do 30,000. Then we can change the amount. We have done 36,000. And then we have put this change. So, 21 lakhs is still less. So, basically it will come to 3 lakhs. So, now our retirement corpus is only 67,000 less. So, I can spend 3 lakhs per year. If I can spend Rs 25,000 per month. And if I take 7% inflation. And 8% growth. Then 1 crore is enough in 50. If I spend 25,000. If I spend 50,000 with same scenario. Then I will need 1 crore. Now, you will say that I invest in mutual funds. I know investing well. And I think that my corpus can earn 10%. If 7% is inflation. Then I think that my corpus can earn 10% per annum. Like our approach. You must have seen many videos on retirement. If you want to understand anything. Then put it in the comment section.
If I think that I can do 10%. So, let's try it on 6% after spending 3 lakhs. So, now our corpus will be 47 lakhs. So, it means that I can spend 4 lakhs or 4.5 lakhs. So, 4.2 or 4.3. Means I can spend around Rs 35,000 per month. If I can earn 10% return. Now, you will say that I have already retired. I am 60 years old. And now tell me what is this scenario. So, in that I can spend 50,000 per month. So, in 60 years also if you are earning 10% return. Then there is a deficit of 24 lakhs. If this scenario plays. You say that I have inflation. I don't spend much. 50,000 per month. Next year, I will grow according to 5%. Then it is good. 5% inflation, 10% rate of return, 1 crore rupees. You have enough. You have just enough. So, you can spend 50,000 per month. If you are 60 years old, you will get that money for 90 years. Now, there is one more thing. Many people think that I have a pension. I have a house. He is giving rental.
Or I am getting pension. Suppose you are getting pension of Rs 10,000 per month. Means it comes more than that. But I think 10,000 per month. So, I am getting a pension of 1,20,000. And we will make it 7 again. Is there any growth of pension? It seems that 2-3% growth is there. So, let's grow it by 3%. Till when will the pension come? Will it come till 90? Will it come till life expectancy or will it come soon? Many times, for limited time, money is going to come. So, we sell those things. Rental is going to come. I have to sell that house after 10 years. So, you can put that also. So, I have to get pension till last. Till 90. So, then in 6 lakhs, 7% inflation, 1 crore, 10% and all. So, then almost I am there. Means 3 lakhs is the only deficit left. So, in this way, you can find out that the money you have, is it enough for your retirement? So, now you can change the amount.
If you have 2 crore, 3 crore or 50 lakhs, then you can change the amount. Accordingly, you can find out how much expense I will have after retirement, my work will go smoothly till life expectancy which I have planned. So, this will be very very helpful for you. So, if you like Calculator, then do share this video with everyone. I think this will be very helpful to many people in retirement planning. And from the perspective of financial freedom also. And if you want our financial plans and personalized approach, if you want to understand how to get 10% rate of return, or what all I can do after retirement, then you can go to our website and call our customer service, sales team or relationship team. You can WhatsApp or call or email. And then we will reach out to you and we will surely try to help you on those things. That is all I have. I hope, do subscribe more. Because the topics of financial planning are not going on much. So, do subscribe and like the video if you like it. Have a great time, friends.
Jai Hind..
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6 Retirement Essentials (Most people only prepared 2 or 3)
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
I'm planning for retirement most people focus
mostly on marshaling together enough money you know Financial Resources so that they can last
the distance and then maybe at the back of their heads they have some vague plan right perhaps
two or three things to fill the time with a lot of the times this is stuff like travel family
well unfortunately I'm gonna say that's not quite nearly enough for Preparation we ourselves
have been retired for two years and going looking back on the past two years I kind of see like
six essential things that if you prep for it beforehand before your retirement starts I think
this can really make such a positive difference to your retirement so that's what I wanted
to bring up and discuss with you guys today number one first and foremost of course we have
to talk about money most people's concern is the amount of money that they have in retirement
whether it will last them till the end come comfortably and allow them to afford the Hobbies
like travel good food Etc but I actually think after going through the last two years building up
our financial Acumen is just as important if not more so what do I mean by Financial Acumen I mean
stuff like budgeting tracking projecting investing I mean if you think about it the money in your
bank account can always be squandered we all know that story I think more importantly what's
going to make your retirement more fireproof is having an ability to generate more money where
it came from in the first place so the second essential thing that you can prepare for so that
you have a wonderful retirement it's definitely the ability to be self-directing and disciplined
self-direction definitely helps so much with spending your retirement days meaningfully right
after all there are no more like work schedules or like demands from colleagues or bosses to help
shape your days anymore you have to be the person to take charge in retirement there's a study out
there actually that shows that for happily retired folks most of them actually have about 3.6 core
Pursuits that's what they say and the unheably retired folks tend to have less than 3.6 corporate
suits coming in at about 1.9 call Pursuits that's what the study reflected I guess it kind of just
shows in retirement you really need to fill your life to the brim and keep busy with activities
you love and that is a really great formula for happiness and self-direction will help you
to achieve that state as well as discipline because if you think about it like discipline
directly affects the state of your finances right it affects whether you stick with your retirement
planning whether you keep fit and active and you get to maintain your health in retirement even
whilst you're left up to your own devices even to find your cover suits if you don't have any
when you're starting or in your retirement so discipline and self-direction will be like
the building blocks for enjoying your life in retirement the third essential thing you might
want to work on and cultivate or happy retirement is people skills right so studies and research
have reflected very consistently that the main determining factor for happiness and Longevity
for most of us is actually relationships Human Relationships friendships relationship with
your spouse and with your family I guess if you look at most of us you know we all have
a little need of work on some social skills in some aspect I mean some of us are a bit shy
paper hats or graph or maybe socially anxious working on our people skills really will help us
to get along and live happily with our spouse and family members and also importantly to make
new friendships at whatever age we all know that making new friends gets a lot more difficult
as we get older I mean I haven't heard anyone say otherwise for me personally making new friends
as I get older is the biggest challenge there's this huge feeling that nothing can replace
friendships with people who have known you all your life but it is also a challenge as I
have chosen to exercise through Arbitrage in our retirement and we've moved away from home
so those friends aren't with us in our present I find that it takes a lot of intention I have
to consciously push myself to broaden my Social Circles and make the effort to get to know people
on a more intimate basis I am also very happy to be able to say that it has paid off in that for
the last two years in Bali I have actually made two or three new friends that I'm happy to say are
kindred spirits and not just social acquaintances so that's very nice and it's a huge Comfort to our
daily life here in a foreign land away from home now before we move on a big thank you to
Mumu Singapore for sponsoring this video Singapore is an online trading platform for
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MooMoo ad using my link in the description below now back to the video the fourth essential
thing that you can definitely work on and that will benefit your retirement tremendously it's
actually courage you're definitely gonna need lots of courage in retirement and I guess this isn't
a skill exactly it's kind of more of a quality but in retirement you need a lot of courage
to even plunge into retirement you need the courage to you know take that leap of faith to
stop putting it off due to fear of the unknown feel or financial insecurities so then it's all
about courage at that stage not let fear and insecurity rule your life and your decisions it
is also the courage to recognize that in life at the start at the end in the middle the Domino's
you need are never all nicely lined up you know at some point you just got to jump into it and
then learn to cross the obstacles as they come so for retirement long term I guess the
biggest issue most commonly is always money but my perspective on this is that hey budgets
can always be reduced money can always be earned or recouped or whatever happens so I still
think that you know it is actually beneficial to Advocate an approach whereby you get to
a point where you feel that you have most of your Ducks lined up you've planned well you've
prepped for it grab hold of your courage with both hands and then take the plunge people tend
to think of retirement as the end but it's not it's the start of a new phase where you should be
trying so many new things new Pursuits new ways to live and for each of these new adventures
you're gonna need courage to take action and once you have taken the plunge you'll find the
next fifth thing very very useful and that would be a mentality of resilience especially in early
retirement there are a lot more decades ahead of you you know and therefore a lot more chances that
they things can go wrong whether it be down to bad financial planning or perhaps an unexpected Health
catastrophe or even sometimes natural disasters whatever comes I guess you will always need that
strength of Will and the resilience so that you can roll with the punches and then get back up
you want to know that you have the mental strength that even if things go pear-shaped you won't just
give up and lose hope and certain Corner you've got to Marshall what you've got inside you go out
there find Solutions perhaps if necessary you've got to go back to work but know that later on
you can return to retirement and try again so the sex essential thing that I believe will benefit
everyone in retirement is to cultivate an attitude of gratitude we all know life is a very long
journey hopefully at least and so much of what we Chase using most of our years actually doesn't
really matter in the big picture once you have taken a step back and then at that point is when
you start realizing the earlier you cultivate and attitude of gratitude and that appreciation for
the simple little things that are probably around you everywhere every day the happier you probably
will be and it sounds silly but it's not really automatic I mean we all live and grow up and
work and go to school in a society that kind of innovates us with messages that we need to reach
for more have more ambition gives us you know that High definitions of success in life that we
have to try to jump to reach and nobody sings the Praises of the pleasures of a simple cup of
tea you know the importance of family time with your loved ones or or just the pleasure of being
able to take an evening walk on the beach with your dog so I think that it's very important that
somebody reminds you that you know you can not overload what you already have what you're already
surrounded by growing that muscle of appreciation so that in each and every moment you are present
in your own life you see all the little Joys that you're surrounded with every day and if you
live life like that I think that will help you achieve contentment with just the small stuff
around you and that's what majority of your life in retirement may be about is just a small stuff
every day but in my own retirement here in Bali it is what makes me so grateful and so happy every
day that I am surrounded by my loving husband and very interesting and independent little dog
that's very very cute you know that we have very comfortable a bit simple house we have the ability
to enjoy good food even if it's simple stuff from the war rooms locally we have a garden and
beautiful things are growing around us every day the weather is great you know stuff is good yeah
I think this is one of the most essential simple things that's often overlooked simply because it's
a matter of mentality but I believe this essential quality or characteristic could make all the
difference for you so these are the six essential things that I believe are very very important for
you to cultivate and prepare for in the leader to actually taking the plunge into a return then I
think that if you have these six strong skills and qualities going for you you will be in a position
much more well placed to make the best out of your retirement however long that period may be let me
know what you think of my suggestions whether you agree or if you think they suck let me know why
but in any event I really appreciate you tuning in and sharing my thoughts for this week and
wherever you are in the world I'm wishing you a happy Saturday evening and let's speak again
next week till then you take care and bye for now
When can I retire? | How much Retirement Corpus is enough?
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
Hello friends welcome to
yadnya investment academy. Today is friday. So today we will talk about
a financial planning topic. Today's topic is Related to retirement planning A very common question of you all that come Obviously this all knows. Retirement is a very important goal. If we talk about financial goals. Mostly it should be. Mostly when i do financial planning So many persons financial
planning i have done personally Then in that comes. Retirement is a very important goal.
In which we need a lot of money Nowadays early retirement is occurring. FIRE environment talks are occurring. Financial free retire early In such things When retirement comes in goal One important thing comes How much money do I need? Tell me this much money is enough. Then I can retire. That is a normal question. For this we have already
developed an interesting calculator but that was before pay wall. Now we have removed that from pay wall because it is very useful calculator. So a retirement calculator we have made. In that with so many
permutations combinations We can get an idea This much retire corps I need. If I reach here then I have done well. I am at least financially free. Now I have to retire. We have to work further or not.
Then it is my decision. If above that. Now I am just sharing my screen. Now you will see here You will go on investyadnya website There is a section named
tracker and calculator. In this there is a retirement calculator. Open this Now here we have to fill information. Suppose i am putting age of 30. You have to retire suppose on 60. Suppose we took an
example i have to retire on 60. Life expectancy we mostly suggest We should keep 90, 95, 100. With a conservative estimate If you keep 100 then it is very
good conservative estimate. If you want to take optimistic If you took practical then it should be 90. Suppose i am putting here 95. Fourth information is our Current annual expense When we do retirement calculation Obvious we took assumptions. One assumption is this the
expense i am doing today Suppose when i retire Then also my expenses should be like this. Means my lifestyle of now remain maintained Neither i increase nor decrease.
Suppose I am spending 50k per month today. The expenses that are occurring. After retirement I will do the same expenses. After retirement expenses can reduce. It can be your house if
you are living now on rent. It can be so much rental expense. That can reduce. Now your children's expenses are so much. They will reduce at that time. Sometimes after retirement
expenses increase. Like vacation expenses mostly increases.
Sometimes medical expenses increase. Some expenses have increased. Mostly as an advisor If we took a general advice then we say. Keep the same expenses as they are now. Don't do much changes in that. Some increases some decreases. For example if we want
to do a simple calculation Then considering to current expenses Suppose my expense is 50,000 The profile we are taking has
expenses of 50,000 per month. Then it is 6 lakh rupees per year. You have to put today's expenses. You don't have to put off retirement age. That's all it will insert. Inflation number How much inflation number we have to take? 7% inflation is mostly suggested by India.
If you want to be conservative
then you can take 8%. If you want to be aggressive
then you can take 5-6%. Inflation you should calculate by your own. Every year how my expenses are increasing? If you know little bit idea about that These things are increasing
according to my expenses. Edcuation expenses children's fees It increases almost 8-10% every year. Rentals mostly 10%. Landlords mostly increases rent by 10%. My personal inflation is 8, 9-10%. You take according to your. So for calculation here
I am taking 7% inflation. Then return on investment. On the basis of return on investment. How much is my return on investment? Before retirement and after retirement. Now I am retiring at 60. At 30 I am starting investing. How much should I invest for that? How much retirement corpus I will get? The reason I am investing now.
On that how much return should I expect? It depends where you are investing. If you feel I will invest
mostly in equity markets. Retirement oriented because it is very long horizon. I am of 30 years and retiring at 60 years. Horizon is of 30 years. All that I am investing I will invest mostly on equity. Then we can take 11-12%
return on investment All that we will invest now. Or we kept in equity we can take that. If you feel This house is my retirement corpus This will increase according to that. Then on real estate the return
on expectations that remains. Basically there is round inflation of 7-8%. It depends on you if you have EPFO. That is a very big retirement corpus On EPF we get around 8%. According to that you have invested here. Overall that you are investing Or you are planning This is for retirement
and I am going to invest.
What are expected returns on that? Till 60. Pre retirement is retirement on investment. Suppose it is 12%. Whole the money I will put in equity. Then you took 12% return. Then post retirement my corpse will become. How much will it grow? Suppose I retire and I get corpus of 5 crores. Then 5 crore rupees Where will I invest? Again very difficult question If you are of 30 years then in 60 years.
This is very difficult. This is a very big assumption. We have to think mostly at 60 our risk profile decreases. We will not take much equity allocation. Suppose now we have 60-70 equity allocation That time it becomes 20-30% or 40%. I go a little bit on conservative. I say to most of the people Take percentage equal to inflation I get return same as inflation. If I want to take. Then 0.5-1% extra. We took here 8%. Means 8% of post retirement. My corpus will grow 8% after that. Inflation will remain 7%. This is planning according to that. We will discuss these points later. Therefore I am doing all these zero. We inserted these things. What we say? Our retirement age, life expectancy. Our annual expense, inflation. These all are our compulsory fields. If I consider this now.
Sorry some value needs to be inserted. Randomly value we are inserting. So that it can work. If I consider this now. Then I need retirement
corpus of 14.6 crores. If you are of 30 years and you have to do expense of 50k per month. At today's value Today's 50k offcourse will not remain same at the time of retirement. They will increase with inflation. If you have to maintain today lifestyle The 50k expenses you are doing today Same you want to do at 60. After 30 years. This is the value after 30 years. Don't be so afraid. Today 14.5 crore is very much. After 30 years the value of 14.5 That should be arounf 70-80 lakh or 1 crore I am doing guess work. It will not be more than that. Think if I have 1 crore rupees today then I will be able to do for next 35 years. 60-95 years means 35 years 35k per month That to inflation to adjust it.
I will get it consistently till 95 in 95 it will become zero. If i invest lumpsum then i can invest 50 lakhs. Considering I don't have anything. If I have 50 lakh rupees I will invest it. For 30 years they will grow by 12%. Expected pre-retirement. Then also my retirement money will be done. Monthly Sip that I have to do That is around 50,000 in this. 48,000 rupees sip i need in this. What is the meaning of step up? I will tell this in next. If you have plan in 30 years 60 years. I have to do all these things. Then you have to do monthly sip of 48,000. To retire for next 30 years. Remember this is a monthly sip. It will not increase. Every year you have to do 48k consistently.
Obviously our salary will increase in years Inflation increases salary increases. Now 48,000 will seem so big But after 3-5 years You will not feel big amount. That's what I am saying. In that our step up point comes. Now you will say I don't have 48,000 to invest. It is a very big amount. From where 48,000 will come. If we are spending 50,000 Then by saving 50,000 we
can invest in retirement corpus. That is not possible. Then in that our second comes step up sip What is the meaning of step up sip? What is annual increase in our income? Can we increase sip every year? I cannot invest 48,000 now but from next year i can increase. If you think my annual increase in income. If inflation is of 7%. With 7% income should increase If we take seven With 7% it is increasing. We considered 7% inflation. Salary is also increasing by 7%. In worst case salary is not changing. With 7% there is increase in salary. Existing investment Do you have any investment now? That you think this is my retirement income From that also it will reduce.
Suppose if you have EPFO corpus Suppose of 5 lakh rupees. 5 lakh rupees i inserted here. This is my EPFO of 5 lakh rupees. I will use it for retirement. On that how much return I will get on EPFO? Return are 8% Then we consider we will get 8%. It is tax free means you will get 8% Suppose i have 5 lakh rupees On that i will get 8% more.
Now let's do calculation again. Now since EPFO arrived. From 48 it became 46. Retirement corpus remained same. So now we have to do Sip of 46,000. We can do step up sip of 24,000. We invested 24,000 rupees this month. Every year we increase that by 7%. From annual increase in income we have to do this annual increase in sip. Today you started sip of 24,300. Next year increased 7% on that. Then again in next year increase 7% on that Compounding 7%. Increase 7% every year Till the age of 60. Then also your goal will be achieved. Then you will have 14.6 crores rupees. Considering these were our rates of returns So it is very very good. You can apply so much
permutations and combinations on this. I have little more money than 24,000. I can do upto 35,000. Can I retire early? Then can I retire at 58? On 58 it will happen at 29,000. I have 35,000. Can I retire at 55? Now your interesting calculation will start No you need 37,000 For retirement at 55.
Early retirement you can take at 37,000. If i do 37,000 per year. I invest in such investments
that give me 12% every year. 7% increase i put minimum. If you think 7% increase is less. Consider growth of salary minimum 8-10%. Why not? Consider 10%. Then in Rs 28,000 you can retire at 55. Retirement corpus also reduced. As early you retire that much less corpus you will want. Value of money comes less. At that time its value will be more. At the age of 55 we need 11.6 crores. How much lump sum funding we need? How much monthly sip
and stepup sip we need? I considered 10% annual increase. Like this If you can do so many
permutations and combinations. You can plan yourself. When can I become financially free? I think this is very interesting calculator If you like as i am a conservative investor I am not taking 12% from whole equity. Suppose we take 9%. This we keep 10. The rate of return become 9% from 12%. Obviously both the sip's will increase. You can do calculation according to that. Which type of investor is I am? If you think here is also 9
then it will change again.
These things you can do so many permutations and combinations
based on your profile. You will get so much support and understand If I invest this much money For this much time Then I can go towards a better retirement. This is how you should work on these things. You can plan early retirement. You want to spend so much or not. 50,000 will not be sufficient. I want to increase my lifestyle. Now I am spending 50,000. But at that time I want to spend 75,000. Acc to that by using
permutation and combination What are my savings now? I can plan such investments or not. Then in those things you will get
so much help from these calculator.. Do check that on our website. If you have any comment If there are complications
then visit our website. Below is our email address and
whats app number is given. All things are written below. You can email us there
if you have any query. Below there is comment section also. Must write in comment section. Hit a like if you liked the video.
If you think some knowledge is added Then hit a like Have a great time ahead friends Jai Hind.
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How I quickly doubled my wealth – The 2 Minute Rule
Jason 0 Comments Retire Wealthy
I doubled my wealth in less than 12 months by following this simple two minute rule that anyone can do. But contrary to popular belief, wealth does not come from manifesting money, picking the right stock, or going to Tony Robbins seminars. Let's say you want to make $1,000,000. You start a side hustle, get home after work and say, I'm too tired. Maybe tomorrow. Eventually you might build that website or get your YouTube channel up and then nothing. The lucky ones might make a couple thousand dollars, but you're nowhere close to that overwhelming goal of 1 million or whatever the arbitrary amount is that you set. So rather than focus on the end goal of your wealth. Atomic Habits has taught me to focus on just the first 2 minutes. For me, it starts first thing in the morning. I used to wake up, reach for my phone, and open up Instagram. And for some, it's tech talk, but for me, it's Instagram. The only thing that I changed in my life is now I wake up, reach for my phone, and open up my bank account.
And if you do just that, what you'll find is that by opening your bank account every day, day after day, month after month, you are putting money at the top of your mind. And when money's at the top of your mind, you inevitably make better financial decisions. And little by little, you, just like me, will pay off your debt. You'll set up automated savings. You'll never miss credit card bills. And eventually you will achieve your wealth goal, whatever the amount is. So tomorrow morning, when you wake up and you reach for your phone, what are you going to choose? And if you want more simple ways to improve your wealth, then like this video and subscribe to money with Mark to get more like this. And I'll see you in the next video piece of.
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6 Retirement Essentials (Most people only prepared 2 or 3)
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
I'm planning for retirement most people focus
mostly on marshaling together enough money you know Financial Resources so that they can last
the distance and then maybe at the back of their heads they have some vague plan right perhaps
two or three things to fill the time with a lot of the times this is stuff like travel family
well unfortunately I'm gonna say that's not quite nearly enough for Preparation we ourselves
have been retired for two years and going looking back on the past two years I kind of see like
six essential things that if you prep for it beforehand before your retirement starts I think
this can really make such a positive difference to your retirement so that's what I wanted
to bring up and discuss with you guys today number one first and foremost of course we have
to talk about money most people's concern is the amount of money that they have in retirement
whether it will last them till the end come comfortably and allow them to afford the Hobbies
like travel good food Etc but I actually think after going through the last two years building up
our financial Acumen is just as important if not more so what do I mean by Financial Acumen I mean
stuff like budgeting tracking projecting investing I mean if you think about it the money in your
bank account can always be squandered we all know that story I think more importantly what's
going to make your retirement more fireproof is having an ability to generate more money where
it came from in the first place so the second essential thing that you can prepare for so that
you have a wonderful retirement it's definitely the ability to be self-directing and disciplined
self-direction definitely helps so much with spending your retirement days meaningfully right
after all there are no more like work schedules or like demands from colleagues or bosses to help
shape your days anymore you have to be the person to take charge in retirement there's a study out
there actually that shows that for happily retired folks most of them actually have about 3.6 core
Pursuits that's what they say and the unheably retired folks tend to have less than 3.6 corporate
suits coming in at about 1.9 call Pursuits that's what the study reflected I guess it kind of just
shows in retirement you really need to fill your life to the brim and keep busy with activities
you love and that is a really great formula for happiness and self-direction will help you
to achieve that state as well as discipline because if you think about it like discipline
directly affects the state of your finances right it affects whether you stick with your retirement
planning whether you keep fit and active and you get to maintain your health in retirement even
whilst you're left up to your own devices even to find your cover suits if you don't have any
when you're starting or in your retirement so discipline and self-direction will be like
the building blocks for enjoying your life in retirement the third essential thing you might
want to work on and cultivate or happy retirement is people skills right so studies and research
have reflected very consistently that the main determining factor for happiness and Longevity
for most of us is actually relationships Human Relationships friendships relationship with
your spouse and with your family I guess if you look at most of us you know we all have
a little need of work on some social skills in some aspect I mean some of us are a bit shy
paper hats or graph or maybe socially anxious working on our people skills really will help us
to get along and live happily with our spouse and family members and also importantly to make
new friendships at whatever age we all know that making new friends gets a lot more difficult
as we get older I mean I haven't heard anyone say otherwise for me personally making new friends
as I get older is the biggest challenge there's this huge feeling that nothing can replace
friendships with people who have known you all your life but it is also a challenge as I
have chosen to exercise through Arbitrage in our retirement and we've moved away from home
so those friends aren't with us in our present I find that it takes a lot of intention I have
to consciously push myself to broaden my Social Circles and make the effort to get to know people
on a more intimate basis I am also very happy to be able to say that it has paid off in that for
the last two years in Bali I have actually made two or three new friends that I'm happy to say are
kindred spirits and not just social acquaintances so that's very nice and it's a huge Comfort to our
daily life here in a foreign land away from home now before we move on a big thank you to
Mumu Singapore for sponsoring this video Singapore is an online trading platform for
stocks ETFs and options I've been using the MooMoo mobile trading app myself for almost
a year now and I think it's awesome it's fast intuitive trading US Stocks is commission
free plus they give free level to data and many more perks now for a limited time when you open a
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app will save you so much money already when you deposit at least a hundred same dollars and
start using the mobile app to trade you stand to receive cash coupons up to 128 Sing dollars
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funds on the MooMoo fun Hub and MooMoo will give you cash coupons up to 150 Sing dollars subscribe
at least 100 Sing dollar us to Momo cache plus and they'll throw in an additional tensing
dollars cashback altogether that's 368 Sing dollars worth of Welcome rewards absolutely free
just for using the Momo app so if you're actively investing anyhow I recommend checking out the
MooMoo ad using my link in the description below now back to the video the fourth essential
thing that you can definitely work on and that will benefit your retirement tremendously it's
actually courage you're definitely gonna need lots of courage in retirement and I guess this isn't
a skill exactly it's kind of more of a quality but in retirement you need a lot of courage
to even plunge into retirement you need the courage to you know take that leap of faith to
stop putting it off due to fear of the unknown feel or financial insecurities so then it's all
about courage at that stage not let fear and insecurity rule your life and your decisions it
is also the courage to recognize that in life at the start at the end in the middle the Domino's
you need are never all nicely lined up you know at some point you just got to jump into it and
then learn to cross the obstacles as they come so for retirement long term I guess the
biggest issue most commonly is always money but my perspective on this is that hey budgets
can always be reduced money can always be earned or recouped or whatever happens so I still
think that you know it is actually beneficial to Advocate an approach whereby you get to
a point where you feel that you have most of your Ducks lined up you've planned well you've
prepped for it grab hold of your courage with both hands and then take the plunge people tend
to think of retirement as the end but it's not it's the start of a new phase where you should be
trying so many new things new Pursuits new ways to live and for each of these new adventures
you're gonna need courage to take action and once you have taken the plunge you'll find the
next fifth thing very very useful and that would be a mentality of resilience especially in early
retirement there are a lot more decades ahead of you you know and therefore a lot more chances that
they things can go wrong whether it be down to bad financial planning or perhaps an unexpected Health
catastrophe or even sometimes natural disasters whatever comes I guess you will always need that
strength of Will and the resilience so that you can roll with the punches and then get back up
you want to know that you have the mental strength that even if things go pear-shaped you won't just
give up and lose hope and certain Corner you've got to Marshall what you've got inside you go out
there find Solutions perhaps if necessary you've got to go back to work but know that later on
you can return to retirement and try again so the sex essential thing that I believe will benefit
everyone in retirement is to cultivate an attitude of gratitude we all know life is a very long
journey hopefully at least and so much of what we Chase using most of our years actually doesn't
really matter in the big picture once you have taken a step back and then at that point is when
you start realizing the earlier you cultivate and attitude of gratitude and that appreciation for
the simple little things that are probably around you everywhere every day the happier you probably
will be and it sounds silly but it's not really automatic I mean we all live and grow up and
work and go to school in a society that kind of innovates us with messages that we need to reach
for more have more ambition gives us you know that High definitions of success in life that we
have to try to jump to reach and nobody sings the Praises of the pleasures of a simple cup of
tea you know the importance of family time with your loved ones or or just the pleasure of being
able to take an evening walk on the beach with your dog so I think that it's very important that
somebody reminds you that you know you can not overload what you already have what you're already
surrounded by growing that muscle of appreciation so that in each and every moment you are present
in your own life you see all the little Joys that you're surrounded with every day and if you
live life like that I think that will help you achieve contentment with just the small stuff
around you and that's what majority of your life in retirement may be about is just a small stuff
every day but in my own retirement here in Bali it is what makes me so grateful and so happy every
day that I am surrounded by my loving husband and very interesting and independent little dog
that's very very cute you know that we have very comfortable a bit simple house we have the ability
to enjoy good food even if it's simple stuff from the war rooms locally we have a garden and
beautiful things are growing around us every day the weather is great you know stuff is good yeah
I think this is one of the most essential simple things that's often overlooked simply because it's
a matter of mentality but I believe this essential quality or characteristic could make all the
difference for you so these are the six essential things that I believe are very very important for
you to cultivate and prepare for in the leader to actually taking the plunge into a return then I
think that if you have these six strong skills and qualities going for you you will be in a position
much more well placed to make the best out of your retirement however long that period may be let me
know what you think of my suggestions whether you agree or if you think they suck let me know why
but in any event I really appreciate you tuning in and sharing my thoughts for this week and
wherever you are in the world I'm wishing you a happy Saturday evening and let's speak again
next week till then you take care and bye for now
Retired at 38: 5 strong reasons to retire as soon as you can (Retirement Planning)
Jason 0 Comments Retire Wealthy Retirement Planning Tips for Retiree's
so early retirement has actually improved our
health so much that I actually think we'll be avoiding higher health care costs down the line
that may actually lead into our retirement funds and then early retirement has also allowed us
to achieve a state of intuitive living which has been absolutely awesome financially the
conventional wisdom is that early retirement could potentially be disastrous but frankly
I think so far two years into retirement that our early retirement has been great for us
financially these plus two or three more are just some of the very strong reasons why I would
Advocate that anyone considering retirement should do so as early as possible let me explain why
down below hey I'm Jean and for the past two years I've been retired in Bali Indonesia
with my husband today I wanted to discuss about all these reasons why I think retiring
as early as you can is a brilliant idea [Music] so Health basically don't wait till it's too late
I think that when most people think about health and retirement planning they just kind of hope
and assume that they will be in good health when they enter retirement and then that they pray it
remains status quo until the end but I guess most of us pre-retirement might be involved in jobs
that might be high stress with long hours at the desk and then naturally Fitness just isn't
what ideally it should be so all my life I've been struggling with skin rashes and allergies and
these issues tend to pop up every time my immunity gets low because I'm stressed I'm tired I'm taxed
but truly in the two years since we have been retired the manifestation of all these problems
have just gone down so much in retirement mode I'm happily keeping very fit doing all the things
that I know of like surfing walking the dog with the hubby eating better overall probably further
down the line maybe I might be avoiding higher healthcare costs having this health is actually
so much wealth it allows you to live life to the fullest because frankly all the stuff that you
want to do in your enjoyment of Life probably involves a lot of Health you want to travel
you want to scale that mountain at Sunrise to see that incredible view you need your help even
just to enjoy good food if you like us you like to eat you need your health I mean I know so many
people who have dietary restrictions because of high cholesterol or diabetes improving health is
actually one of the biggest and strongest reasons why you should retire early so the second big
reason for wanting to retire ASAP is actually intuitive living basically intuitive living is
really connecting with yourself and listening to your garden stings and your feelings as to stuff
like eating and rest and meditation relationships even your spending habits perhaps I don't know
how it is for you guys but I was generally living my life governed by a lot of shirts right I
mean I should be at the office by 9am so that I won't piss off the bosses I should stay in
the office stay late and postpone my workout postpone dinner so I can meet the deadline set by
my clients I should carry branded Handbags and of course I should be a corporate lawyer I mean why
would I want to be anything else right finally in retirement we are free from the demands of the
pursuit of money to listen to ourselves to truly tune in and understand what is the optimum cause
in life you can chart you really want to wake up every day without an alarm clock naturally because
you've had enough sleep you want to eat only enough and not too much I mean you want to make
better choices food wise intuitive exercise you know you're doing what really only appeals to you
maybe you don't like sweating in the afternoons so then you know get a gym membership or play
indoor record Sports whatever works for you I only wish that more people have the opportunity
to experience living life this way intuitively away from the entanglements and distractions
from regular running the hands the real life the third reason why you might want to retire
as soon as possibly is just that the earlier you retire the more time you gain in life I
mean if you think about it most of us live life as though we are invincible as if life
itself will never run out and therefore we do things like squander our time or sell it away too
cheaply in exchange for material things we each only have so long to live right and the money you
make in your lifetime you can't bring that with you when you go home so well might as well you'll
be the one to spend it when you can right Society feeds us like so many different narratives
about success and what it should look like but actually I think success is really not
about the achievements per se but it's just really a Feeling and I like to think that at
the end of our Lives when we're there in our last dying moments what we'll be thinking
about probably wouldn't be like stuff like oh I closed that three billion dollar deal I
think it would more be along the lines of like I had good friends and I loved my family I had
a good life you know I ate good food I laughed Lots I took care of my kids and my dog stuff like
that so don't squander the time that we each have maybe you have personal goals that you really
want to achieve stuff like learning Spanish or scaling the Great Wall of China or just
watching your kids grow up that's just a million places that are better to spend your
time at then at a job which you don't really particularly care for and which maybe you're just
doing just cause that's what everyone else is before we move on a big thank you to
skillshare for sponsoring this video so skillshare is an online learning community with
thousands of classes for anyone who loves learning if 2023 is the year you promised yourself
you're gonna finally explore new career or side hustle options or work on personal growth
then skillshare is the perfect place to start for me one of the ways we have fun in our
retirement is making YouTube videos when we first started skillshare was instrumental
in teaching us so many of the basics like videography storytelling and more till today
one of the best classes I ever sat through online anywhere is still the class by Sorel Amore
YouTube success build an authentic Channel that's worth the follow so her advice about finding my
Niche valuing authenticity over Beauty creating meaningful messages and providing value to the
audience really changed our perspectives on what we were creating back then for the better of
course we've gone from like 40 Subs to the 143 000 Subs of today and from time to time I still
pull up sorel's worksheet when I'm creating my videos just to check that I'm on track for
making something good for our people our audience it's always super easy to take whatever you learn
on skillshare and apply it directly to your life Pursuits whatever those may be I highly recommend
checking out skillshare and if you want to do that you can use my link in the description below the
first 1000 people will get one month of skillshare absolutely free you can try it out learn something
new move a step closer to your 2023 goals reason number four the earlier you start your retirement
the better you'll get at it with every other change in life we expect that we all need time to
learn how to do it well so things like becoming apparent for the first time even if like us it's
just a fur kid or transitioning from being a student to being a working adult and then there's
the transition from being and actively working adult to retirement mode it seems ridiculous and
silly even at first I mean it's like saying who doesn't know how to spend their free time right
but if you actually truly observe things around you retirement Falls really differently for
different people we all know the people who have retired and in their retirement seem a
little lost lonely left behind and uninspired and then there's the other kind of retired people
right the ones who go like when we're talking that I'm gonna grab Life by the balls and Max things
out a big part of that may actually be the point in life at which you retire whether at that point
where you retire you still have your zest your Zeal your energy your health your Fitness to help
you max out the happiness potential of that free time and freedom in retirement and then there's
the thought that retirement supposed to stretch out for a few good years at least right if not
for a few decades and doing that requires skills you know you need so many different skills to
have a successful retirement I think that's a topic for another day but basically you need time
to learn those skills whether it's Financial money management or social skills you know building
relationships and stuff but basically you need time to get all that down pat in order to have
a successful retirement so then the earlier you retire the better usually you will probably
turn out for you so the last and possibly the most controversial point I think that early
retirement could possibly be great for you financially and this is controversial because it's
directly opposite to what a lot of the experts say right you retire too early there's so much risk
that you miscalculate your finances or that world events take an unexpected turn and then you know
things go belly up and then you're destitute in your last years but I mean underlying all that
seems to be this assumption that in retirement we're all just going to be like one dead lazy log
and I think that these days especially if you're an early retiree that is just so not true maybe
like us with YouTube in our retirement in your own retirement maybe you'll learn new skills pick
up new side hustles and stay busy doing something that you're doing for the love of it for the fun
not for the money but having the money come in as a result of your side hustle is a nice bonus and
you know what it becomes an additional buffer for your later years so retiring early also allows you
to take advantage of things like dual Arbitrage Right Moving overseas to improve your financial
situation and yeah so like us I'm from Singapore but I'm now retired here in Bali Indonesia we're
not just here because life is more affordable but the fact is that our retirement sums in fact our
whole entire retirement is only possible because living here is so much more affordable as compared
to back home you know this wouldn't be possible at all if we retiredly and ended up having health
concerns right mobility issues for example retiring early and then using the time to keep up
with current affairs learning hedging strategies to minimize risk learning how to diversify our
Investment Portfolio I feel that the time in our retirement has been well spent to actually make
us more resilient and the fact that we retired so early also means that if anything goes badly up
time and youth are on our side if our financial planning for retirement had just sucked or you
know things unexpectedly go failure so prepare you know if we have to U-turn and go back to work or
maybe start another business it's not a big deal and then we'll go off Marshall the resources
that we lack and then we'll come back again and second time around third time around will
definitely be better each time at doing this so in terms of confidence and the feeling of
resilience that we will be able to make this last all the way I think that starting
early doing it early diving into it and understanding the parameters the potential
the boundaries of what we face in retirement actually really really helps well guys so
these are the few takeaways from our last two years living in retirement here in Bali and
I mean if you have any thoughts or objections or contributions to the points that I've made in
this video I'll love to hear them let's start a little discussion in the comments below you
guys have a good week ahead wherever you are and let's chat again next Saturday thank you
for watching and bye-bye have a good weekend
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