Does Investing Over 25% Make You a Tightwad? 

Correct. Dave Ramsey isn’t that way at all.

@@dforrest4503agreed. DR has an ego problem and seems to definitely hire "Yes Men".

​@dforrest4503 no other channel will give you this dynamic.

Right there with you brother, keep it up!!!

That’s amazing! At 35% you’ll be able to retire in

@@9e7exkbzvwpf7csavings they didn’t say investing?

Your kids will thank you when they are 30 years old and were able to buy a home when their friends are still paying off school loans, because instead of spending thousands of dollars on a Disney vacation every year, you saved to be able to play for their college. My dad did that for me, and I thank him at least once every six months. I am so far ahead of my peers financially, just because I was able to get a degree and not have a cloud of debt hanging over me for 15 years afterwards. 😊

And even then @@OhhState vacations where you road trip somewhere are sometimes the best memories a child can have. My family did a 2 week trip every summer to see my grandparents (a two day trip driving) stopping over at my aunts place on the way to stay the night and catching frogs in her backyard, eating with all my cousins around a big homecooked meal, are some of my best memories. Every day at my grandparents was surrounded by people and yet all these trips cost was a tank of gas. You can always make memories @loganfishbeard even without money, spending time with family, having a garden in the summer, volunteering, going swimming at the local lake or fishing at a river, just playing with your kids, family games night! These are the things your kids will remember more than any toy or big stressful trip.

@@OhhState 15 years is the low end for those taking loans these days. I’m guessing they will be paying student loans longer than a typical mortgage now that many have balances in the six figure range. College is a scam that replaced the housing bubble of 2008 where easy loans led to catastrophic failure… the only difference is you can’t really foreclose on a degree.

Wow !! impressive discipline ...i hear you that you're only young once. if you in you're 20's the compounding power /snowballing effect is amazing compare to each decades there after. I say cut back to 40% as at that amount you're killing it compared to most people and enjoy yourself a little ,but don't get caught up of how your friends are living big because in all reality people who have all the flash don't always have the cash and are just posers. I'm older ,but can tell you when you put yourself in the circumstances of your money working for you vs the other way around .You'll love the feeling of financial freedom of being able to afford the nicer things in life without struggle .

I'm doing 70% while living in LCOL countries. Still having a great time and doing whatever, so no big sacrifices.

@@jackieboy1593 That's good to hear! Keep up the saving grind, it will pay off :)

"living minimally when you know you don't HAVE to" This definitely! My husband and I have to max out our 401ks to each reach 3mil by the time we retire. That's $3800 a month total just for retirement savings. We are also maxing out HSA contributions which is another $690 a month. That's already $4.5k out the door every month from our combined income. And these two were non-negotiables for us so we didn't want to cut them. Now if we want to continue those contributions, pay our mortgage, and live life.... is it really possible? Yes --- increase income. It's the only way. Sure you can cut back on living costs, but why not just spend every waking minute of your 8-9 hour job everyday just working towards a raise or promotion? Imo, this was actually easier than sacrificing our short and long-term goals. We have a certain income threshold we want to reach and until we reach that threshold, we HAVE to get raises every 1-2 years. Either by promotion or switching jobs. It's a delicate balance between making more money and keeping the work-life balance. Because more money usually means more responsibility. So in this journey of increasing income, you learn to prioritize better at work so you don't waste time on shit that don't matter. And since you've been focused and disciplined and getting shit done within that 8-9 hour time frame, you NEED to be off work at a certain time and do other things (i.e. things you like) or else you just burn out and everything will be for nothing.

The nice thing about doing a budget and including a “fun” section is that you don’t have to feel guilty about spending $100 last month on entertainment because savings were already set aside

I can do anything between 15-50% depending on income. I'm on a variable income.

Same here. Saving about 50%. Married with 2 kids. Both parents are 40 yo and both working

I wonder how much people are making when they say they are saving 50%. For example, are people making $100K and saving $50K? To save $50K out of $100K of income would work out to be $30K. That's also assuming $23K of the $50K was put in a tax deferred account. So $2500/month to pay all expenses including healthcare?

@@TheFirstRealChewy In 2020-2022, I invested 50% of my GROSS salary each year. 48% in 2023. I currently make a little under $79k/yr. Currently, 22% goes into pre-taxed accounts.

50% savings is insane. Good job… We get hit with way too much life to save that much. Gotta fly here this month, fly there next month.. see “x” family member, rent a car, get an Airbnb.. water heater breaks… baby is born… it never ends!

LOL

meaningless without saying the GROSS. You could say 50% of $1m/yr GROSS, which is $500k, so, I'm quite sure living off $500k/yr puts you above 99% of the US household income versus your making it rain money.

To each their own right! You are taking care of your future and living in the present how you want. Good for you!!!

Agreed, I wish I saved more in my early 20's.

I'm in the same boat bro! Upgrading the house would be awesome but being aware of lifestyle creep holds me back. Saving without a mortgage would be cool.

or just spend YOUR money.

@@hanwagu9967 that's how you stay poor generation after generation. Wealthy families know better.

​​@@hanwagu9967 The truly wealthy can spend lavishly on themselves their whole lives, and still have enough (considering the money will continue growing) to set up a legacy trust and pay for the next 10 generations of their descendants college degrees. And maybe help with down payments on homes too. There's a lot of ways to set up the groundwork for generational success without just dumping all the money on your kids or grandkids at once for them to blow on whatever and not have to work. That's lazy. A legacy trust can last up to 1000 years and you can dictate exactly how the money can be distributed to your heirs and what for. No wealthy person that isn't an idiot just throws high 6 or 7 figures at their heirs with no conditions and makes it so they don't have to work. If you only have enough for your own retirement, that's fine, spend all your money on yourself and your gift to your kids is that you raised them when they were young and you weren't a financial burden on them when you were old. That's good enough. But if you have plenty of excess, and you'd rather blow it on oversized homes, boats, sports cars, etc. than help secure the future of your own kids, grandkids, great grandkids etc... then you're just an extremely selfish person, if I'm being honest. I'm not sure why you even had a family. Probably shouldn't have. Dual income, no kids is an objectively better way to live a financially selfish life.

Yes! My grandparents set up a trust. I have been getting $$ every month for the last 15 years and I will forever (currently about $2,500/mo and goes up a little every year) - i finally paid off my $90k student loan 😳

They ain't gonna tell you unless you pay them AUM fee, because you could just sue them, that's why these videos are caveated as for entertainment purposes and opinions not financial advice. I would web search mike piper, who, I think there's a general concensus, provides a very good online FREE social security strategy calculator. It is very tailorable tool, and did I mention FREE. I have no connection to Mike. Even if you paid a financial advisor, I'm pretty sure they would just use Mike's free tool.

Depending on where you are it is not legal per the zoning ordinance to build more than one livable building in one lot. Renting is also always stressful.

Spending money on pretty much anything other than travel and experiences is physiologically painful for me. It actually hurts. Saving (or more specifically investing) money feels incredible. I love it. From what I see in society, I'd guess 90% of people are wired basically the opposite of me. But a high savings rate isn't a chore for me. It's actually much more painful to not have a high savings rate. I think a lot of people don't get this when they tell savers to "let loose" and "live it up". Saving is how we live it up... It's what I enjoy doing with my money the most (or 2nd most, behind travel). And the reality is I only get enough time off work to travel 1-2x a year. So time is really the limiting factor, not money...

Agreed. My wife and I make just over 100k gross combined, live very frugally and we have to really squeeze the budget to even hit 15%

Agree 100%, it is a no brainer (also UK here). I do appreciate paying a lot less tax and contributing a lot to the future. We are lucky in the UK with the amounts we are allowed to put in each year. The U.S have the 401k which is very similar from what I understand

No, we don't have that in the US (had to Google it). I've heard of some very high earners negotiating various extra benefits but I've never heard of anyone sacrificing part of their salary to get them. And many benefits are still taxable in the US.

@@JessMN1974 hi, the sacrifice part means that i lower my salary by an amount and that amount is what goes in to my pension ( equivalent 401k...) So then we only get taxed on the lower salary figure, not the higher one. It's very useful!!:)

E@@nicolawilliams2319we do have a tax break on 401k pretax contributions, but it is capped at $23k for 2024 (over 50 yrs old can do catch up amounts in addition). It is taxed when it is withdrawn in retirement and has penalties on top of taxes if withdrawn before retirement age, unless it is a loan which has rules. Pretax 401k accounts also have required distributions in retirement which can create tax challenges too. Does your option have a max deferral amount?

​​@@nicolawilliams2319 In a roundabout way, we kind of do... There's no negotiations to be paid less in exchange for adding to pension or pension equivalent, but money contributed to a 401k is considered pre-tax dollars. Let's use the example of someone who earns 100k in a year. If they choose to contribute 20k to their employer sponsored retirement plan (a 401k), then that 20k will not be taxed that year. So, the employee was paid and earned 100k, but will only be taxed on 80k of earnings that year. The invested money can be tax deferred all the way until retirement. So no, we don't have the same system, but we have ways of achieving similar results. And hello from the US by the way... I hope you're doing well over there across the ocean.

25 percent of your base pay, and then if you get a bonus save 25% of that

And don’t spend too quickly because it might be impulsive and keep you from spending on what you really want. MEASURE TWICE AND CUT ONCE WITH FUN SPENDING. For example: saving for an extra car. I think I want something fun and fast but over time I’m realizing my preferences are changing so I am glad I didn’t rush in.

I think he would tell you that if you live in those places, you shouldn’t be owning a car (basically only NYC makes sense)

The 20% rule he mentions at 11:48 is for cars, not housing

@@raffaelepiccini3405 well 20% down avoids PMI doesn't it?

​@@hanwagu9967for your first home they say they are ok if you only put 3-5% down. They also say if you get a second house you must put at least 20% down

@@raffaelepiccini3405 the Money guys recognize that you should go with minimal down for your first house, but getting to 20 is important for the long term. the 20-3-8 rule is for cars but that's more because they recognize that car values drop like a rock and its risky to have an underwater asset.

Why not eat beans and rice, live in a cardboard box and do 99% to retirement

​​​@@LawrenceTimme Why only 99%? As a dual income household I invest 100% of my net pay and we live off my spouse's income. In terms of getting by, It's no different than the way a single income household that lives paycheck to paycheck lives. Which millions of people do right now by necessity. The only difference is I keep and invest my 2nd paycheck instead of a bunch of companies and creditors getting it like most people do. And I do like rice and beans if it's seasoned well but eat better than that most nights... i'd invest 100% of my gross income, but ya know, the IRS would probably get pretty upset about that. All the people groaning about how "miserable" I must be saving so much money are sure going to be miserable working until they're 72 while I've already been retired for 25-30 years. Suffer the pain of saving now, or suffer the pain of working until old age later. Pick your poison. Unless you're a trust fund kid, not suffering is not an option. And living your life trying to avoid all suffering is both futile (because it can't be done) and kind of pathetic, to be honest.

Can you 1000% guarantee you’ll live there forever?

It’s definitely important to look at the funding level.

@dforrest4503 It's not even just about funding levels.... I doubt a single company, government of not, will still be offering pensions in 30 years. Companies/school districts have been freezing pensions left and right just this decade. We're down from 50% at the peak of pensions to under 13% currently... give it a decade or two, and that will be down to zero.

Of course it isn’t. But if your lifestyle is affordable at 75k, you probably don’t need to max out your 401k and IRA to retire. That’s fine and not everyone needs to be maxing out their accounts.

​@@General8675 It depends where you live and when you plan to retire. Not everyone needs to max it out, but they should if they have the means to do so. Can't predict the future but prices only go up

@@maoisnI’d disagree if you’re talking about tax-deferred accounts. If you’re saving that much, you could easily want to retire early enough to not want to put all your eggs in tax deferred accounts.

what is that 116% figure? if you're making 100k. you're saving 116k?

Lol

@@Boleeezy I would be ashamed of myself if I made less than $400k/year.

@@roysherwin9348 I'll jump on the the stupid bandwagon. If your income is $400k/yr, this means you save $464k/yr? I think @Boleezy's point is that saving over 100% of your income doesn't make any sense. Primarily, becuase you cannot save and invest over 100% of income, because of taxes. If you are getting money from mommy and daddy which allows you to offset taxes and the 16% over 100%, that ain't income. Considering you can't do common sense simple math, I guess you are pretty much perpetually ashamed of yourself, because you ain't making over $400k/yr.

@hanwagu9967 actually, in the time I'm taking to type out this comment, I increased my savings rate to 121%.