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trident 
USA Fan
Member since Jul 2007
2573 posts
| How do you make your money grow? (Posted on 1/2/13 at 8:36 am)
Need some advice here guys. I will have all my student loans paid off in about 6 month ~11k, and about ~4k in rainy day fund (very secure job). I will only have a house note left ~100K, but the kicker is my wife will be quitting her job due to having a baby around the same time we pay off the student loans. I have no knowledge of stocks, mutual funds. I am saving 10% into my 401K but that is my only retirement fund as of now. How can I make it on $80k and build money? Any books that I can read (already read Dave Ramsey), or any other information that you could recommend?
I also plan on starting a college 529 plan once the baby is born.
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barry 
Cincinnati Fan
Location, Location, Location
Member since Aug 2006
34983 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 9:59 am to trident)
quote:
Any books that I can read
"How to get your wife to keep her job"
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trident
USA Fan
Member since Jul 2007
2573 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 10:03 am to barry)
quote:
How to get your wife to keep her job
She will return after she has the baby. at least 6 months, possibly longer and I would rather suffer to have my wife raise my child than a babysitter or daycare
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Venelar 
LSU Fan
The AP
Member since Oct 2010
143 posts
 Online
| re: How do you make your money grow? (Posted on 1/2/13 at 10:18 am to trident)
Bogleheads guide to investing
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foshizzle
LSU Fan
Member since Mar 2008
25466 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 11:01 am to trident)
Honestly, you can follow a pretty simple strategy and do pretty reasonably without a lot of work. Use the Roth as your emergency fund for anything above the first couple of grand or so - you can pull money out from your Roth with no penalty if you need to and the earnings are tax-free.
Get as much matching company funds as you can in the 401. Once you hit that mark, invest as much as you can in the Roth until you max it. Once you can do that, then work on maxing the 401.
In the 401 and Roth, invest in a target retirement fund, most plans have them.
The above is pretty simplified but isn't bad and should keep you out of trouble.
Also, if your mortgage rate is really low don't worry about paying it off early. For example, I have a 30 year 3.25% note. If I were to pay extra, my after-tax return would be 3.25 x .25, or 2.4%. That's right about the rate of inflation, so there is no benefit to paying early at all. Of course, any loan that has a high rate you should pay ASAP, just be aware that when it is that low it is better to contribute to your Roth or 401.
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Nawlens Gator 
Florida Fan
louisiana
Member since Sep 2005
2099 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 12:19 pm to foshizzle)
quote:
3.25 x .25, or 2.4%
My calculator must be broke.
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ForeverLSU02 
Penn Fan
Albany
Member since Jun 2007
21538 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 12:28 pm to trident)
quote:
trident
Congrats man 
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DNaquin
LSU Fan
Right here
Member since Nov 2011
4021 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 12:44 pm to Nawlens Gator)
quote:
My calculator must be broke.
Dawn of the new year must have fried mine as well. It keeps giving me some stupid 0.8125 number.
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TheIndulger
LSU Fan
Houston
Member since Sep 2011
4830 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 12:49 pm to foshizzle)
Roth is good because you can take your money out at anytime, but I believe your earnings (not the money you put in) are taxable until you reach a certain age.
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DNaquin
LSU Fan
Right here
Member since Nov 2011
4021 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 12:51 pm to trident)
quote:
trident
Remember, money markets are but one option. Paying cash for real estate pays off down the road. It isn't easy to find them, but never pass up a nice property that is undervalued. Keep your eye open, they are out there. Land is a pretty solid way to solidify your dollars against inflation as land nearly always increases in value. Even bad land is valuable. Accumulating acreage over your career can pay off big time in 30 years.
401k's don't last forever and draw less and less interest as you take money out during retirement. My first tip would be to plan on changing companies when you have the experience to one that offers stock options and some sort of pension system. You may take a pay cut on salary initially, but this is worth it to gain that secure retirement.
Don't sink all of your money into a 401k. Put something towards something that will provide residual income during retirement when you don't have that weekly paycheck coming in.
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trident
USA Fan
Member since Jul 2007
2573 posts
| re: How do you make your money grow? (Posted on 1/2/13 at 1:17 pm to ForeverLSU02)
quote:
ForeverLSU02
thanks. you are next
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foshizzle
LSU Fan
Member since Mar 2008
25466 posts
| re: How do you make your money grow? (Posted on 1/3/13 at 12:38 am to Nawlens Gator)
quote:
My calculator must be broke.
Sorry, when I was typing I was thinking 25% tax bracket, which means it should be 3.25 x (1 - .25) = 2.4%
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Fat Bastard 
New Orleans Saints Fan
Paradise
Member since Mar 2009
13640 posts
| re: How do you make your money grow? (Posted on 1/3/13 at 9:00 am to trident)
quote:
How do you make your money grow?
water the money tree regularly.
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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
13640 posts
| re: How do you make your money grow? (Posted on 1/3/13 at 9:02 am to DNaquin)
quote:
Don't sink all of your money into a 401k. Put something towards something that will provide residual income during retirement when you don't have that weekly paycheck coming in.
bingeaux.
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PlanoPrivateer
LSU Fan
Frisco, TX and Delray Beach, FL
Member since Jan 2004
1127 posts
| re: How do you make your money grow? (Posted on 1/3/13 at 9:59 am to Fat Bastard)
quote:
Don't sink all of your money into a 401k. Put something towards something that will provide residual income during retirement when you don't have that weekly paycheck coming in.
I don't understand this unless the choices within your 401K suck. If my wife and my 401k's are worth, for example, $2,000,000 and it throws off 5% income a year then we have an income of $100,000. I know that as we get older the rules say we have to take out more out of our 401k. But, I would put anything over what I needed in another investment that would also yield something.
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