Good morning Erin. I am 12 years into my retirement journey and fortunately have spent a lifetime being a disciplined saver and investor. I have been watching your channel for a while now and viewed many of your vlogs. Kudos to you for work on this channel. Your conversational style, great visuals, and excellent editing all contibute to quality videos with very useful content for viewers. In fact, I have suggested to my son 34 yr old son that he subscribe and follow your channel. Thanks for all you do Erin. Have a great week ahead.
I like the way you deliver topics and you do a good job with added charts, visuals, and supporting content. I consider you a kindred spirit and an inspiration as you strive to save, invest, and share with others.
For forty+ years those factors were important. Being retired, I'm really only concerned with my portfolio balance. I'm not taking Social Security yet, give generously to charity and family and the portfolio is still growing. Will only get better with Medicare and Social Security. In regards to credit score. I havent had a mortgage for a few years and they always tell me lack of installment loans is impacting my credit score. It's mid 830's so not much impact.
If you have a good credit score and perfect credit card payments, children can be added as authorized users. They will establish good credit scores for them as long as you don’t mess up.
Your health and health care expenses are a massive factor in regards to a successful retirement. With medical bankruptcies being uniquely exclusive to the U.S, many will be better off retiring as expats abroad.
Great measurements. Each indicator coincides with an overall system of progress towards a stable retirement. But at the same time, allows for experiencing life as well.
Don’t agree that you can’t influence your rate of return. Erin is just considering average market returns but you don’t have to buy the market. You can outperform the index if you are very selective buying into quality moaty growth businesses and holding for the long term to let them compound over the long term provided you are also patient and only buy them at a reasonable price when they are “on sale” relative to their intrinsic value. Compounding higher return rates over the long term makes an enormous difference. It has for me.
Erin, thx for doing these videos. My daughter just graduated college with 200,000 approx. in student loans. Average starting pay 100,000, with plenty of jobs available. I promote paying off the student loans ASAP, but she is debating investing the extra money slated for loan principal reduction instead to take advantage of compounding. I’m torn, but lower your debt is my thought. Agree? I know you mentioned paying off student loans.
Nice video with some great points. Things change so much over time and you’re right starting as early as possible is great but I really struggled financially early on in my life/career. I am making up for things now and invest probably 4 times my total salary when I was just starting out. If you’re young and watching this don’t panic, it’ll be alright in the end :)
Great content, I'm not a proponent of debt although while personally enjoying financial freedom I like to use debt for some large purchases, that's where having a great credit score is utilized, for example securing a mortgage or a car loan when rates were good (lol) between 2 - 3% while drawing 8% - 10% return leaving money invested in Stocks, Bonds, Real Estate etc. The risk is very low if not totally non existent if you have a substantial Net Worth $$$
Great video! I have to say that I'm super impressed with how organized and well made your videos are. Any new RU-vidr should look to your channel as an example of top notch content. Your video descriptions may just be the best on RU-vid.
Credit scores still impact things like insurance rates, so i argue that it's always going to be important. Until they devise a better solution that is. I remember a time before credit scores, so hopefully it will improve to he more inclusive.
When our daughters started college credit card companies were issuing them to freshman with no income check. We told them to apply, use and pay them religiously and ask for a credit increase very 6 months. (One needed a small bailout from dad but not much). They did so and by the time they graduated they had already built up their credit score to get a car loan. We were generous by giving them a small down payment on a car loan but would NEVER co-sign any loan for them.
Great advice. But another important thing that I like to add about the importance of a good credit score is that insurance companies, utilities, etc base their prices offered to you partly on your credit score.
And never forget all the 0% offers thrown your way by credit card companies. Ironically, when your credit is in the 800’s it’s because you don’t really need lots of it.
LOL - my condolences.... I have an aggregator w/ all my accounts and every week or month i open up to check a portolio the net worth as well as a 5-yr graph of my networth is auto-generated ----- BUT I'm trying to wean myself off of the check ---- cheaper than starting a therapy for my OCD.... 🙂
Same for us. We needed a good score to build our first home. We were working and going to grad school. That did not leave much time for trips or anything else that involved spending so on paper we looked really good to the banks.
Thank you for preaching responsibility while affirming the need to keep a good credit score. It's simple, there's no effort, there's no cost, and it's used for more than borrowing. A good score never hurts and a bad one can bite hard. It's the #1 reason I side eye the Ramsey plan. Dave's 8% rant didn't help either...gee whiz. Thanks for the show!
Ramsey has a stubborn obsession with trying to take everyone making 80-120k to pretending they live like they make 9 figures and pay cash for everything, by getting so disciplined they don’t live their life while they can. Way over the top.
GREAT channel! You look way too young to know so much. My 2¢ ? Put savings into metals, not stocks, no BTC, no 401K. INVESTING is a different story. The old formula of 40/60 of whatever is outdated and not safe for the times we are in. Savings need to be counter-party risk free and keep up with inflation. Precious metals are the only assets that can do that. I keep over 70% of my savings in metals, 10% in stocks (energy, food, miners), the rest in cash. 401K was very good to me, but the easy times, free money era is almost over. Keep 401K if you must but contribute minimum for now, the rest in metals.
I had the best credit score I've ever had (~750) when I needed it the least, when I was 2+ years into my mortgage . Then when I paid off the mortgage (after ~4 years), my score was back to the mid 600s exactly one year after my last payment. Credit scores are pretty bad at measuring people who are financially well off enough to not need debt.
Do you not have any other lines of credit? Or a bad debt history? Or no other credit history at all? I ask because that makes no sense otherwise. When I paid off a car loan about 2 years early, my score went down slightly (like 10-20), but it didn’t drop 100 points. My credit has hovered in the mid 700’s and slowly increased over time.
@@nwj03aBasically no history. The only other debt I've had besides the mortgage was student loans more than a decade ago, which I paid off immediately when I got the letter about making payments after graduating. Apparently that never showed up in my credit history, based on what my landlord said when I started renting an apartment (and since I lacked any history, I had to pay for my last month of rent upfront). So for a while the only thing I had was the mortgage, but a year after that was paid off my history was basically a blank slate again. My credit union's summary shows "Payment History: A" for a grade, but no active accounts for credit usage, credit age, or account mix.
@@justthebrttrk Nah, it kinda adds up. You use credit regularly, so you have an excellent score. I don't use credit, so I have a fair score. But my credit score does not reflect my financial situation very well. When I had mortgage debt that required payments my score was 750, but now that the debt is gone and I have better free cash flow with a net worth between fluctuating between 6 and 7 figures, it's down to 640.
Right or wrong, I never tracked my credit score year-by-year. If we were looking to buy a house, I’d pull a credit report to make sure there wasn’t anything mistaken on there. Amazing how often someone else’s credit card was included with our data.
interesting - i used a credit moitorinng service free from my bank ----- but you are right in the use of a CS report --- best to make sure it is correct and clean --- great contribution. Thanks.
Great video as always, Erin! I will challenge you on your Credit Score goal, though. To me, our Credit Score is one of those things that is essentially not under our control, at least directly. My early adult life was pre-CS, but even as I've worked with others on financial challenges, I've not seen much real change as to someone's financial well being by tracking their Credit Score. As I've coached my 2 adult children into their early financial years we've not tracked their Credit Score as they were purchasing large ticket items (house for my daughter, car for my son). Mortgages can still go through traditional manual underwriting (my daughter was successful in this), and my son chose to save up to buy the best used car he could at the time. My son and his fiancée are currently saving for the down payment on a house (to be purchased after they get married).
i believe most car dealerships and mortgage brokers as well as currently landlords pull your credit score so it is secondary in the case of your children who seem to be financially adept and with credit scores not burdened by the hi credit card debt nor on the other extreme of never showing the use of credit. But i do think that like running a retirement tool on financial assets is a more standard way of checking that key indicator vs the Fidelity age-based multiplier the use of some detail of the credit score gives a perspective. How do you use a credit score (even free ones available via banks / cu's or free sites? or do you bother?
@@kevinkanter2537 You are correct, some businesses (insurance companies is a good example) use credit scores to determine my risk for making a claim (as stupid as that sounds). I thank them and take my business elsewhere. I don't use a credit score for anything. I use my local bank for a checking account, and an online bank for my short term savings.
I agree that the CS is far more important in your early years. Honestly in retirement I have no idea what my CS is.. Its simply not relevant. Now, call me crazy but I simply don't understand why anyone (who wants to build wealth) has a car loan. I used my feet and the bus until I saved enough money to buy my first car in my teens and have done the same ever since. Cars of course are not investments so one really should buy the absolute minimum second hand car one can that is reliable. I'm not like most people in that I have never sent a car to a mechanic and I get some people just can't do that, but a lot of people can but for some reason society has taught us to be helpless and we all send out cars to a shop rather than rolling up our sleeves, buying a few tools and opening a book... Rant off..;)
Its certainly harder but there is still a lot that can be done with a simple scanner and basic trouble shooting skills. I have still never sent a car to a mechanic as of yet. Now obviously as I am financially independent there might come a time when a repair is needed that is simply not worth my time to mess with.. Time will tell I guess.@@dstevens518
This is off topic, but I love all things number related. Erin, I can't help think you are a bit obsessed as well. It drives me crazy to see your vdeos are only liked by 1 of 15 viewers and I expect you know that stat. I bet if you set a goal to increase this to 1 of 10, and talked about it briefly in your videos,, your viewers would step up and make a conscious effort to help you achieve your goal. Everyone says "like and subscribe", obviously that has little impact.
Two other items to consider: - Within Net Worth, we always broke it down by the purpose of each portion: - Retirement Nest Egg - Kids’ College Fund - House Downpayment Fund - Make-It-Rich Fund Also, within Retirement we tracked what portions were Roth IRA, Trad IRA, and non-qualified (I.e. taxable).
@@ShawnPatton-rm2hv So glad you asked! Back when I was just getting into the Air Force, there was a great book about saving and investing called “The Wealthy Barber” by David Chilton. It was written as a story, but addressed many of the topics that young families deal with as they are beginning their financial journeys. Part of the main advice was not just investing 10 to 15 percent towards retirement, but also investing 10 percent into your Make It Rich fund. Maybe that is to buy a vacation home or maybe it is to help you retire extra early. I believe the book was updated after Roths were invented, but I don’t think they put out an updated edition that covers 529s, LTC, etc. That is why I stopped recommending it, but if you can find a used copy it might be worth your time to read as you plan out future video topics. Cheers!
@@ShawnPatton-rm2hv sounds like while most accounts are "expense" sub-accounts or "sinking funds" this is a goal oriented sub-account, a Yacht-Floating fund ... 🙂🤣🤣🤣
I've always found it bizarre that having a bad credit score is better than having no credit score? I never had a credit card because i never needed one? I paid for everything. Luckily, I don't need credit. Seems that if I did, I'd have trouble because i can afford what I need? The powers that be would prefer to lend money to someone who can't? (for obvious reasons). Thanks for the great video.
Starting out saving? There's probably a phrase or metaphor comparing it to exercise: Everyone sees the super-successful, and virtually everyone needs to do more. But start out slow, doing enough that feels moderately uncomfortable but that you can repeat. You can build on that routine until it not only becomes a habit, but even a fun lifestyle.
The number I've focused on are my fixed expenses. I was able to free up a significant amount that I was then able to put towards paying off debt and investments.
Hi again. I found it surprising your comment about saving too much, when you told me in prior comments that you and your husband decided to save your entire salary. As I have recently seen several videos and comments on this topic, let me share my opinion. If you are saving more than 15% of your income, make a good income, and think you are sacrificing a lot to save, than perhaps you could cut back. But if you are happy with your current lifestyle I would not beat yourself up, and I would continue to save at the current level. Worse thing is you will end up with more assets than you would use when you are older. And as far as spending on "things" I would put saving as a higher priority. Experiences are another matter. As you, friends, and family have finite time. And unlike things, experiences will last a life time.
I use two numbers. 1) Average rate of return on all my money. And 2) Total amount of profit I've made and have theoretically on everything I've invested in.
My numbers have been increasing in all these categories, so I must be doing something right! I like how you mentioned that these numbers will fluctuate in the short term but should be steadily increasing in the long run...I am currently debt free which helps me in all these categories. But if I buy a house sometime my numbers will dip temporarily.
I love your videos, but I disagree that savings rate to increase over time. Ideally it starts really high, like 50%, and steadily decreases as your investment balance reaches critical mass and you are saving just enough to get any matches.
