When John asked the man for his best advice for aspiring millionaires, he said the only thing better than investing early in a 401(k) is investing in real estate.
Btw, the article on investing in RE is dated Oct 2019, in other words, Sutherland started RE investing in 2014 after the financial crisis. Talk to us after he experienced a crash.
two strategies he plans to continue using to increase their net worth to at least $5 million by retirement.
Failed @manch criteria of $5M per person. Can’t employ.
It does not matter whether young or old, as long as the advice is right, we are fine !
Even though I started 401k right from the start, I came to know more about 401k, IRA and Roth recently.
Government has given very few avenues to save and many people do not know these benefits as they are very short sighted in savings.
If a person contributes $6000/year in Roth IRA and invest in S&P 500 (blind investment) at 7%, he will have 1 Million tax free in 38 years.
Think how much it will be when you save $19000/year putting everything in Roth? In 23 years, they will see 1 M tax free, and 3.25M tax free in 38 years.
Do you know is difficult to save that much when you just graduated? I save zilch for many years! After you save some $, you get married and have children, save zilch again.
General norm is 33% savings, 33% spending and 34% tax from earnings. Just graduated will not have any issue saving 20% of pay as anyone can save 33% of pay.
Once they get married, they may not save, but by then few increments will be there, but still hard to save. Children add more pressure on savings.
But, individuals must set aside 15% minimum for retirement savings. Early bid wins with power of compounding !
The issue is not around 15%-20% savings, but with awareness that they such avenue for retirement.
Delay having kids. We had kids late. it meant we were financially stable, and our assets can snowball. OTOH, you have less energy for kids, your health is not as great. OTOH to OTOH, you can afford help like nannies