Comments on: Five Tried and True Financial Fundamentals http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html Bridging the gap between saving money and investing Wed, 09 Jul 2008 07:40:21 +0000 http://wordpress.org/?v=2.3.1 By: thevicenarian.com » 5 Tried and True Financial Fundamentals [via SavingsAdvice.com] http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-285288 thevicenarian.com » 5 Tried and True Financial Fundamentals [via SavingsAdvice.com] Wed, 16 Apr 2008 07:40:26 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-285288 [...] Five Tried and True Financial Fundamentals - SavingAdvice.com Blog via kwout March 27, 2008 | In online, personal finance, vicenarian |  digg |  del.icio.us |  reddit |  facebook [...] […] Five Tried and True Financial Fundamentals - SavingAdvice.com Blog via kwout March 27, 2008 | In online, personal finance, vicenarian |  digg |  del.icio.us |  reddit |  facebook […]

]]> By: Jordan http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-271557 Jordan Tue, 25 Mar 2008 17:47:13 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-271557 Thanks Jim. Fortunately my company has the same investment (a low expense life cycle fund) as i did with my IRA. I guess with that benefit i did not not see the other side. Thanks Jim. Fortunately my company has the same investment (a low expense life cycle fund) as i did with my IRA. I guess with that benefit i did not not see the other side.

]]> By: Jim http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-271020 Jim Mon, 24 Mar 2008 20:52:52 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-271020 Jordan, that's because within a 401(k) you are usually limited to the funds/stocks that your employer has selected. This can sometimes be a very poor selection (4-5 choices). If you contribute the additional money to an IRA of some sort, the sky is the limit when it comes to investment options. You can invest in any stock, any mutual fund - I've even seen people buy an investment rental house with their IRA. So, the main difference (there are a few minor other ones) is the number of investment options available to you. Hope that helps, Jim Jordan, that’s because within a 401(k) you are usually limited to the funds/stocks that your employer has selected. This can sometimes be a very poor selection (4-5 choices).

If you contribute the additional money to an IRA of some sort, the sky is the limit when it comes to investment options. You can invest in any stock, any mutual fund - I’ve even seen people buy an investment rental house with their IRA.

So, the main difference (there are a few minor other ones) is the number of investment options available to you.

Hope that helps,

Jim

]]> By: Jordan http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270952 Jordan Mon, 24 Mar 2008 18:41:53 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270952 Hi Jim, I agree with the matching. I am trying to figure out why it is almost considered bad to put only up to the matching percentage and the rest in a roth. Why not everything into a 401K? Hi Jim, I agree with the matching. I am trying to figure out why it is almost considered bad to put only up to the matching percentage and the rest in a roth. Why not everything into a 401K?

]]> By: financial advice,financial,financial accounting,financial advisor,financial advisors,financial aid | Finance Blog http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270876 financial advice,financial,financial accounting,financial advisor,financial advisors,financial aid | Finance Blog Mon, 24 Mar 2008 14:07:18 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270876 [...] there can be conflicting opinions and advice when it comes to what you should do with your money. Read more Courtesy: [...] […] there can be conflicting opinions and advice when it comes to what you should do with your money. Read more Courtesy: […]

]]> By: camille http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270713 camille Mon, 24 Mar 2008 07:42:58 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270713 I am a young woman (freelancer) with a bit of debt an underfunded Roth IRA, and a flimsy emergency fund. I'm trying to figure out which one needs to most attention immediately. Is there a reliable formula out there for discerning this? I am a young woman (freelancer) with a bit of debt an underfunded Roth IRA, and a flimsy emergency fund. I’m trying to figure out which one needs to most attention immediately. Is there a reliable formula out there for discerning this?

]]> By: Jim http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270553 Jim Mon, 24 Mar 2008 01:43:56 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270553 Jordan, it's always better to get the matching money from your employer because you start out with an automatic gain. For instance, pretend your employer matched 100% of your contributions for the first 3% of your wages and you made $40,000 a year. That means if you contribute $1,200 a year, your employer would GIVE YOU FOR FREE $1,200 a year. You automatically double your money. If you never invested that and just left it in a cash account in the retirement plan, you would still be better off than most of the people you meet every day. While taking that same $1,200 and investing it on your own would also be a great idea, you would miss out on the free additional money. Hope that helps! Jordan, it’s always better to get the matching money from your employer because you start out with an automatic gain.

For instance, pretend your employer matched 100% of your contributions for the first 3% of your wages and you made $40,000 a year. That means if you contribute $1,200 a year, your employer would GIVE YOU FOR FREE $1,200 a year. You automatically double your money.

If you never invested that and just left it in a cash account in the retirement plan, you would still be better off than most of the people you meet every day.

While taking that same $1,200 and investing it on your own would also be a great idea, you would miss out on the free additional money.

Hope that helps!

]]> By: AJC @ 7million7years http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270436 AJC @ 7million7years Sun, 23 Mar 2008 21:32:54 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270436 You had me ... until #5 ... I'll be posting soon on why 401k's and Roth IRA's can limit your retirement. Also, I prefer a more uplifting version of "live within your means': it's "increase your means so you can LIVE!" Pretty much everything else, I agree with ... great post, thanks! You had me … until #5 … I’ll be posting soon on why 401k’s and Roth IRA’s can limit your retirement.

Also, I prefer a more uplifting version of “live within your means’: it’s “increase your means so you can LIVE!”

Pretty much everything else, I agree with … great post, thanks!

]]> By: Hilary http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270387 Hilary Sun, 23 Mar 2008 19:26:10 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270387 Roth IRAs are only eligible for people who make less than a certain amount, so if you're in the higher tax bracket, the Roth IRA won't be an option anyway. Here's the wiki article: http://en.wikipedia.org/wiki/Roth_IRA An econ prof. at my school seems to think that taxes will definitely be much higher in the future, so a Roth IRA makes sense. I don't think there's a definitive answer. Roth IRAs are only eligible for people who make less than a certain amount, so if you’re in the higher tax bracket, the Roth IRA won’t be an option anyway. Here’s the wiki article: http://en.wikipedia.org/wiki/Roth_IRA

An econ prof. at my school seems to think that taxes will definitely be much higher in the future, so a Roth IRA makes sense. I don’t think there’s a definitive answer.

]]> By: Jordan http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270374 Jordan Sun, 23 Mar 2008 18:42:17 +0000 http://www.savingadvice.com/blog/2008/03/23/102071_tried-and-true-financial-principles.html#comment-270374 "Of course, if you receive a matching contribution on your work sponsored retirement plan, it is usually the best idea to contribute the maximum amount of money that they will match, and invest the rest in a Roth IRA." Why is this? I have heard this before, but I believe it is only true to certain people. Would it not be more beneficial for one in a higher tax bracket currently than when they retire to put all their money in the 401k. Though it could be argued that taxes in the future will be so large that it won't matter what tax bracket you are in currently. Any sites that give an answer on this? “Of course, if you receive a matching contribution on your work sponsored retirement plan, it is usually the best idea to contribute the maximum amount of money that they will match, and invest the rest in a Roth IRA.”

Why is this? I have heard this before, but I believe it is only true to certain people. Would it not be more beneficial for one in a higher tax bracket currently than when they retire to put all their money in the 401k. Though it could be argued that taxes in the future will be so large that it won’t matter what tax bracket you are in currently. Any sites that give an answer on this?

]]>