That couple romanticized owning the 1M home. I could already tell that spending on things that would make them happy was almost non-existent. As you pointed out, as soon as they were to acquire that 1M home, they’d be sad again soon thereafter.
They need to spend time defining their rich life. Personally, I think working/earning less and spending time enjoying each other is part of the solution. As busy as they are with work, owning/maintaining a house will be a shocking consumer of time.
Couple 2 needed to be live so Rami couple challenge the defeatist attitude and ask what they planned to do with the $750,000 they have saved. I see $50,000 for an emergency fund and $700,000 for a house with a $300,000 mortgage the payment would be about $2000 a month. Then they would free up the $6000 a month they are saving for the house. It’s crazy that these numbers allude them when they’re so able to stay on a budget so they have to understand something about numbers.
@@superbigblack That's what I was thinking. I can't stand Dave's teaching. Making people afraid of using something/use too much control, just makes it more likely someone will rebel eventually and end up in a mess.
And if they really end up moving to a different city, they could pay cash for a nice house anywhere between 400k and 700k depending on where they move.
It was fascinating to see the one couple has already increased their income from $60,000 something to over $200,000. The second couple really needs the full IWT experience! I would love to hear their logic and perspective. Being worried about buying a house you can almost pay cash for is very interesting.
Because in NYC, to buy a house is like $2m minimum... When I moved to NYC in 2007, buying a building was in the $750k range, a similar building that I was looking at (15 years later, same neighborhood but in a "cheaper" aka worse location) was listed for $3m and it wasn't due to extensive amazing improvements.
I agree. That woman sounded exhausted. They have way more money than me and I found myself feeling richer. I'd love to have him dig into the psychology there.
Yesss, I need couple #2 on the show, omg. The video update made me sad, it sounded like someone stuck a straw in and sucked all the life from her. Hopefully, the prospect of moving will give them more opportunities to construct a life outside of work and saving, because they can have an amazing rich life, and they deserve one for how hard they've worked. I'm an NYC native living in Philly, they could easily buy a beautiful home here with the cash they have on hand. There's a lot to do and see here too. And they wouldn't have to say goodbye to NYC, it's right there. I've gone up on Amtrak to have brunch and been back home in time to feed my cat dinner lol.
Truly love your content. But I also wish you featured more people with incomes in the $50,000 to $70,000 a year range, and single people as well. As a single 28-year old woman making $52,000 a year, I absolutely do learn from all your guests, but none of the people featured today were relatable. I don’t have a husband. I don’t have a doctors salary coming in two months. And there’s no $700 k housing fund. The choices and calculations I have to make are different, because the money is different. Single people and people not making 100k + each year have money concerns that are just as a valid as other subscribers. It’d be nice to see that reflected.
I agree that this is Ramit’s biggest flaw. He never does full episodes with single people. A large number of adults these days will either never marry/partner or are divorced or widowed and don’t remarry. We need information on our finances just as much as couples, perhaps more so since we may grow old without outside support (particularly if we’re child free) and thus have to plan for our futures even more carefully.
I like this. I feel like the podcast has gotten to be too much like a therapy session to understand someone's finances. Yes, the emotion is important, but it's taken over the numbers, so you really can't tell if their problems are real or emotional until very late. This starts with the numbers, which everyone can understand, and then you add in the emotional thoughts based on the numbers, which makes a lot more sense.
I think the second couple made the right choice in finally moving. I think the real issue there for their happiness was that both of them were having to do two jobs to maintain that income in a high cost of living area while trying to save for a home and retirement. I think that the exhaustion of having to work so hard probably also meant that the little time they could spend together wasn’t quality time. Moving will help them reach their goals and at the same time, hopefully they can afford to work less, by getting a nice home for less money, and get to enjoy their lives together. Wishing them lots of happiness for the future.
Couple 2 makes me sad. They are successful by almost any measure, great combined income, amazing savings for a creative couple, could almost buy a place in cash. But they live in a scarcity mindset. Because of this mindset, they missed so many opportunities when rates were low. In the video followup, I can see the depression and despair in her face - she does not believe she really has the opportunities she so clearly created for herself. And it did not seem like she heard Ramit's message of "yes, you can buy." This is the case where negative stories they are telling themselves have destroyed happiness. Who needs all this money sitting in an account when you're that miserable?
It also likely has to do with the scarcity culture they grew up in. I don't stereotype or believe in them but it does not surprise me they are of Asian heritage as many of their cultures have this.
In my opinion, it seemed like they weren’t looking for a $1 million house. She says that $1 million house would only be slightly better than what she was looking for. That makes me think she’s looking for a multi million dollar house.
@@Mr_NB628Here’s what I think happened to them. They have been grinding for 15 years right? Well back then they started a $1 million dollar house in NYC got you a lot more than it does today. As they started saving the money to afford their million dollar dream home, what they actually wanted started to go up in cost faster than their savings/income. Now the home they actually want is $5 million, and they are further from it than they were 15 years ago when it was $1 million.
Yay, more individuals in different situations please! College students, early career, high school. Etc. Early education could be so beneficial for them and for everyone.
I enjoyed the format of the episode in the content, length, and presentation. Certainly there is an an audience for people with this level of income. Also, I'd like to see a similar episode with people making a combined $100,000/year as a couple (20's, 30's and 40's year old) and an episode of single-parents or people likely to be single for the balance of their life. Thank you Ramit and team.
im a little confused by the follow up of #2. either she's trying to buy her dream home first (does she know that she can buy a home, and then sell it and get a bigger, better one??) or she thinks that homes must be bought in cash... I think she needs some financial education...
Couple #2 - Was going to say, "Considering the apartment prices in NYC right now, my bet is they have their rent semi-secured and moving to a $1k more expensive apartment wouldn't necessarily get them a better place. I do agree that they should be living somewhere they ENJOY because who wants to live somewhere they end up hating? (Been there, done that - great apartment, terrible location.)" Good job on them to leave NYC. I left, and for LESS MONEY than my 2009 rent in a highly desirable neighborhood (rent locked in, crap location despite the neighborhood) I have a 3 bedroom rental house on 1/2 an acre, a great quality of life, and a more satisfying social life. It's awesome. I loved my 15 years in NYC, but it became clear it was time to leave thanks to the gift of work from home/remote work. And that's okay! Not having to work to live is SUCH a gift! Couple #3 - I LOVE my sub-savings accounts. It's how I think about my money, and I'll target certain accounts to "top up", then as each one gets "topped up" I'll move my savings focus to another account. I'm a spender, so this is the way to keep me in check and in budget and regularly saving. Also, love that you have advertised NLW. That's the way to do it! Thanks for doing these WITH the video follow ups! VERY helpful!
Not to answer for him but a huge part of the podcast is seeing how problems arise from conflicting money psychology and rich life visions. Can’t have conflicting perspectives with only one person
@NickiBluIs Individuals may have "conflicting issues" between their personal financial beliefs and knowledge and others' (non-partners) advice, which would cause them to seek Ramit's help. So my original question stands.
@@MsJai_1 Yes! And digging into people's financial backgrounds and history growing up can easily be applied to singles. I'd also like to see what he'd suggest for disabled folks and people who cannot work full time.
My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means. Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement , I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcastwho earned over $650K in less than a year, what's the strategy behind such returns?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience .If you're new to investing or don't have much time, it's best to get advice from an expert.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Hey Ramit and team - I love this format. Also thankful for your acknowledgement of feedback in the comments - the previous videos in this series have had different selections of people too so I think overall the variety is decent and I’m looking forward to seeing more as you are able to produce the content. I’m from Aus so our tax/retirement/account structures are different but the principles seem universal and I’ve learnt a lot about Roth IRAs 😂 ! Thanks 🇦🇺
If I can recommend doing this type of episode with single viewers, I am. I’m a huge fan and you have inspired me to pay more attention to my money. I still need work but I have made some great progress and intend on getting better. Thank you Ramit!
Yessir! We're in the same situation! I retired from the AF after 27 years and have a solid pension and VA compensation. That alone us we'll over 6 figures. My wife is a Federal Employee and when she retires she'll have a pension. The healthcare is the big thing, pretty much free healthcare with a $3k catastrophic cap... regardless of what the procedure. It's a huge benefit, but we do sacrifice a lot during our 20+ year career.
@@stevedoria2996 , It absolutely brings a lot of joy when planning for retirement! There's so many challenges civilians face that we don't. Very blessed!!
oh wow that’s incredible!! thank you for your service as well, my dad is retired navy. i was blown away by couple 1’s post-retirement income and was curious how such a thing was possible, but it definitely makes sense given how much of your time & life was spent working in the military. if there’s anyone who deserves a well-set up life in retirement it’s y’all, glad to see this and wish you, your wife & family the best! ❤
@@mwise9435 Or one could get a good apartment that is still cheaper than total housing costs (mortgage, interest, HOA, taxes, insurance, agent fees, maintenance, etc.) Equity also takes decades to build. You'd be paying interest for the first half of the payment schedule. You end up with equity after years and years of throwing money away on interest and all the other recurring costs that continue to run after paying off the house. Meanwhile, a renter who invests the difference would very likely have at least as much as the homeowner (depending on how much they invested) after 30 years.
I wish we could see more of this with realistic incomes ($55k annual) for the average person. Maybe it's because I live in NM, one of the poorer states, but these incomes seem unrealistic for most. The advice is then not helpful to most of us.
im low income and just like ramit suggest, i still find commonalities. still finished his book and Im on my way up. just got a new job to start investing more too. i hear you though
Hi Ramit, since I remember you said you read your comments, I wanted to thank you here. My husband and I had been saving 25% of our income into Roth 401ks but just recently decreased that to 15% because we want to enjoy some of our income before retirement. So right now we are saving for a family trip to the UK and have nearly funded a Paris trip for 2 of us. We very well will increase our savings to retirement again but right now this seems appropriate especially since our 4 kids are at home (minors) and we want to give them some more great travel memories. (for reference we are completely debt free and have 529s funded for kids, HSA we max out, own our house). Modest income but we're careful.
If you are planning to go to UK, then you could join that with the Paris trip? There is a train which takes 3hours from London or a quick flight which should cost less than $150pp.
You're right, and that was our original plan, but since we want to see a number of things in each place, to avoid completely wearing ourselves out, we're splitting into two 2 ish week trips.
Lake District for Beatrix Potter related places(probably 5 days there) Stonehenge, a lot in London, a few castles have been suggested, we just need to figure out. We're big British literature and history fans here so probably could spend a year or two but realistically 15 days will probably find us ready for home. :)
2:11 - Military pension and disability can be 100k a year, usually most of it is tax free. CSP #1 checks out, in my opinion. They can also be in their 40s. There are plenty of people who went into the military right after high school, did their 20 years, and collect $70k+ a year as retired in their early 40s.
Yes! Another power couple that is "100% disabled" (approx. $4K each per month) on top of their pensions. I wonder how long before the VA runs out of money.
@@valentinesday7406I don't know if I should go there but what the heck... I have a close(sibling) that retired from the military and also gets almost full disability and used his GI to get an electrical not engineer but does IT work. Has had a full time job the whole time runs marathons, lives in a million dollar house, both he and wife drove range rovers and do you see where I'm going with this?!
@@ahermitslife3684someone once explained it to me that they’re disabled for purposes of their military jobs but not necessarily disabled for purposes of civilian jobs/civilian world. I would be curious to know how much money is spent on this because many service members receive these payments!
the reason why the 2nd csp folks' guilt free spending is so low is because they don't have time to spend money - they work all of the time. I know because I do the same - I have a job and am also studying for a PhD, so I'm also in that boat, albeit with much much less income than them. The issue is that if they stopped working so much, they'd have more free time for guilt free spending activities, but they'd have LESS money to spend on things... so it doesn't quite make sense to just say "spend more." I also get why she is saying that the house is a pipe dream, possibly because of mortgage rates being so high. even though they technically can put a fat downpayment on a house, their housing costs will shoot way way up after buying, meaning they have to keep working like crazy. crappy situation they're in. I feel for them.
This is me as well lol. I forced myself this year to take a month long trip (and even then, I still couldn't stop working, it's an addiction at this point). It's out of character for me, but I'm glad I did probably one of the most memorable trips I've taken!
This was awesome! I like the updates. It’s interesting to show how much your feelings about money and life is about their own perspective and just need a little nudge to go where they want to be
My husband and I thoroughly enjoyed this episode, great format, thank you! I'm very appreciative of the guests for sharing their finances and lives with us, very insightful!
Couple 2 is confusing to me. Not letting their money work for them optimally. A lot of fear around money and dismissiveness about how well they are actually doing. They could cut thier salary in half and still be more than fine if investment income is included.
Love the call out to “surprise expenses”. Things like house repairs and car repairs are not surprises. Save for them every month. Emergency fund is for emergencies. Cars and houses aren’t emergencies, you know repairs and replacements are necessary so budget for them even though you don’t know the exact timing.
26:34 I’m happy you say these things. Sometimes I hear these people save so much and then I think I need to be killing myself to save every penny - I want to spiral! Your reminder to enjoy your life is refreshing and helpful!
thats so awesome. Found Ramit in Feb this year and ive been helping my co workers and family and my employers with their finances lol. Ramit for the win. i never cared about money at all until he woke me up lol
I never really comment on videos but i just wanted to say you offer such a refreshing perspective on finances that is so important to quality of life. Its easy to fall into the never ending sprint of saving, investing, frugal frugal frugal. Thank you for reminding us that it is okay to set our goals financially , automate them, and enjoy life
i love it whenever Ramit put his hands on his heart, when he says something like "things that make you happy". It means that he feels it and means it sincerely from his heart. He doesn't just say it from his head.
1:46 It’s called retired pay and not a pension. It’s not a pension because it’s not a lump sum, plus rules have to be followed to continue to get it. They could have SBP - Survivors Benefit Plan - continue part of payments to each survivor and dependent children. The retired pay is looked at as cash flow like a rental property but no tenants or ACs to fix. It’s a great cashflow. We are about $2k per month away from having our expenses covered from retired pay, disability pay, and interest/dividends. They may also have VA disability pay.
I feel bad for the second couple... their entire young adult life because they're anxious about buying a modest box to live in. I understand it but 15 years of grinding hurts, you can never get that time and potential experiences back. I wish they had just decided to buy the damn house in a more affordable area.
You hit the nail on the head. I presume, if not after this episode, that couple will realize they will need to take a leap of faith and shift their investment / spending strategies. They will look back and think, was it all worth it. But at the same time, the past is the past and they still have time to affect their present/future.
Hi Ramit, greetings from Brazil! Thank you so much for sharing all your knowledge and helping us to achieve a richer life. Your videos have been changed the way my husband and I deal with money and sharing the costs and incomes. One question that I have is how should we invest/use an annual bonus? I saw in one of your videos that we should save 70% in investments and the rest divided in other buckets, but I couldn't find the video to find the answer! Again, thank you so much!
Love this video format, Ramit. Very easy to watch and breaks down income / expenses / savings / investments perfectly. Planning on watching with my kids 🙂
My biggest takeaway is that the people who go on this show rarely seem to have real money troubles. I read about how many Americans live paycheck to paycheck, and this show doesn't reflect that at all. The couple that said they are creatives, live in a sh*tty apartment, and feel like hustling all the time seemed to fit the "economic crisis" many middle-class families live in the US, yet they have a million dollars saved...
Most Americans do not live paycheck to paycheck. The median household has a net worth of $193,000 and thousands of dollars in checking and savings accounts. The "paycheck to paycheck" narrative is one I consistently reference since it's one of those phrases that makes no sense. What does P2P mean? Do you notice how many high earners on this pod claim they live paycheck to paycheck? The conclusion is that the way we feel about money is highly uncorrelated to the amount in the bank.
@@ramitsethi whoaa incredible, so that narrative is also wrong??? I thought it had to do with reach and those who have access to content like yours, as I also read in the comments a common "have lower income couples on the show". Still, I believe you and your pseudo mantra "the way we feel about money is highly uncorrelated to the amount in the bank"... seems to be true pretty much on every episode. Thank you for answering, I am a big fan, greetings from Germany!
@@LoretoLalaI’ve wondered the same! I think there are people who really do live paycheck to paycheck and you’re probably right that a good number of those probably people don’t watch ramit’s show. I also totally see his point that a lot of the people I know who say they live paycheck to paycheck, generally overspend. One friend I had lived “paycheck to paycheck” and, while she didn’t make a ton of money, a lot of the problem was picking a luxury apartment, getting eyelashes/massages every month, going to see Taylor Swift, etc. I’m assuming that’s what he’s trying to challenge. I also know some people who really struggle career wise and have ended up working lower wage jobs and that limits things. I don’t think Ramit could do much beyond encouraging them to develop new skills, so I’m not sure it’d be as interesting. Overall, though, I totally see your point and have mulled over the same thought
I would love to see how IWT/CSP could be used on a european. We ususally have a lot lower income but we also have pensions and lower expenses as our taxes cover a lot. Great video as always!
Ramit thank you for doing a CSP for military/veterans. There’s not a lot of info out there on military families. I retired from the military at 39y/o. My husband work as a contractor on base. I had both a traditional and Roth TSP/401k while on active duty and reallocated to more aggressive funds across TSP for better growth. Also have a separate taxable brokerage Vanguard account. We’re investing for our child and any future grand children but hubby and I continue to live our best lives today.
Hi Ramit, really enjoy this video! I'm wondering if you would consider making a series teaching young couples in their 20s and 30s how to get a head start in their financial stability and their rich life? Many couples featured in the videos are saving for retirement or are already in their mid 40s and 50s. Although they are very educational, I'm very interested in hearing your advice on how to develop good financial habits as a young couple?
Thank you so much for sharing a military family first! It’s really hard to find content that applies to military families with benefits like TSP accounts, pensions, etc. They probley have VA health insurance Ramit! Btw haha
Yes, loved seeing something that applies like our situation being ex-military and now government employees with pensions. Would love more content on how to factor in TSP, pension, and social security into saving for retirement.
Oh man do I ever feel the couple in their 30s in NY, we are also in our 30s and work pretty average jobs (west coast instead of east coast) and have been “2 years away” from buying a home for the last dozen years, we have almost 200k we could put towards one, but the market everywhere around here is like $700k+ for a starter home, and still on the rise. I’m generally an extremely positive person, but housing just sucks.
If a house is the goal, then the sooner the better seeing it's impossible to go back in time to buy 5 years ago. Prices will just keep increasing. 200k on a 700k house is a great down payment. Goodluck!
Loved this episode. The numbers, the updates, it was great! That first couple's pension is wild, and it's barely taxed even! I'll have a pension but much smaller, so I still need to save a good bit for retirement. These couples are all doing very well financially, much more so than the average person. I always wonder, is the skew much higher than median a choice Team Ramit makes in choosing who they feature, or just because people who make more are more willing to share their finances? I know when I made less and our lives were more of a struggle, I didn't like talking about money near as much, lol
I think it’s self-selection bias - it’s likely that the people sending their information are higher earners who are financially conscious in terms of wealth building. When I made much less money, you would never see me watching finance videos, much less considering whether to submit my budget for review and feedback - I was just trying to survive! 😩😂
A lower income, struggling family might also have trouble with the first step of organizing the numbers in the first place. Even just a simple "write down what comes in and goes out" might be tough. So to get vetted, a lower income couple might not have time or stamina to get through it.
Ramit, I really love your content, very inspiring and I learning a lot. So that been said: One thing I want to remark is the median income per capita in the US is $45,000 annual and the household income is $75,000 (typically couples incomes). Would be more interesting, helpful and relatable for most of the people if you share and advice with the CSPs of median incomes. Thank you
Thank you, Ramit! You have reminded me how important it is to spend today and not just tomorrow. I have done some calculations and at our current rate of savings, we’ll have an absurd amount for retirement. Simply too much when I could spend more on enjoying experiences with my family today. Always appreciate your perspective!
The 2nd couple going for 15 years-wow! hardcore dedication, kudos to them but live a little. Life is way too short. Yea you can buy the house and I liked their thought about moving. A 1M house in NY doesn’t get you much. The last couple-I would definitely pay off that car to eliminate one less payment. Agree on beefing up vacation fund.
The 1st couple retired Military, it’s typically 50% or a little more of their monthly “base pay” after 20+ years of service and their “rank” at retirement. also they are both probably a 100% VA disabled rating which with 5 kids is probably around $4500 each or $9000 month also VA disability is tax free so $108k tax free a year plus their monthly military pensions….
It’d be great to see more relatable income levels (less than $20K/month). The one couple we saw making $5K/month, he emphasized how low and basically awful that was, but I think that is actually a more realistic monthly income for the majority of Americans. It seems like this podcast is more helpful for high income earners, and I think that’s the difference for someone like Dave Ramsey who represents more of the average earner.
These were great! My take aways at the end like you asked are that I don’t enjoy life enough and am constantly saving. I keep thinking we will do this and then have that “American dream” but then we are off to the next thing. I think we need more fun time and finding things we enjoy. Thank you for your channel! 😊
My biggest takeaway is that wow people are doing fine financially...i keep hearing how half of the country can't come up with a 1k emergency but when you see stuff like this I think most people are really fine
No waaay! I was genuinely curious in this particular episode where you get your clothes! 😅 Loved the navy striped sweater with the hoodie so much! It's so cool your wife styles your wardrobe. I really like this episode format. Looking at different CSPs with real time feedback is so insightful. Keep em coming! 🎉
Why no discussion of college funding for the five kids with the first couple? Their kids won't likely qualify for any traditional financial aid, and even if they get free tuition as veterans' kids, room and board can still be a lot, especially if 3 or more of them overlap.
Once my wife and I achieved the LA dream home-We got a divorce-Now she’s my ex. Not because we hated each other, but because we grew apart striving for the AMERICAN DREAM. Realized ‘things’ don’t make you happy.
Good stuff man! I have enjoyed your videos. i have turned my financial situation around by about 14k this last year and am constantly learning new skills and mindsets that i enjoy incorporating into my own life! Thank you for all your hard work and advice.
Hi Ramit! Love this style of video. Please consider mentioning factors like inflation and health care when instructing your viewers about the 4% rule. It's shocking to see what 2-3% inflation compounding each year until retirement can due to the budget.
You finally got me to tune into your RU-vid channel after being a dedicated podcast listener and newsletter reader. This is the first RU-vid video I have ever watched! Congrats lol; taking the CSP plans out of your emails forced me to click. I do love the format I just much prefer reading as well as listening on the go. But I may become a convert. I do wonder why you don't add a line item for retirement contributions under Investing and instead guess at how much of the difference between gross and net income is from 401ks. Make people break it out! Some areas really do tax you at close to 50% while other places do not after all. And some couples pay a ton for other deductions versus maxing out 401ks. I love the CSP but this is a glaring issue with the format in my humble opinion and hides one of the most important financial numbers - retirement contributions.
He probably wants it simple(r), but I feel we're missing this as well and also need a separate entries for mortgage and high interest debt. By the way, check out the other videos. If you're a podcast listener there's plenty of other videos added on Thursdays.
LOVE this video series. While I enjoy the exploration of the emotional context and motivations in the podcast, I love the efficiency and precision of this style of analysis.
This channel has started to really make me feel like shit about myself haha. Going by these and the podcast couples can make you feel like everyone else is rich and you are waaaayyyyy far behind, even though I know that isn’t the truth. It seems much easier to solve people’s financial issues when they have a lot of money and are either mismanaging it or could be allocating in a better way. I’d love to see couples in their 30s that make some realistic $50-70k salaries and how they can handle their finances when the majority of it goes to strictly cost of living.
Thanks for watching. I never, ever want my material to make anyone feel bad about themselves. And it's a huge priority for me to highlight ALL diverse financial situations we face -- high incomes, low incomes, socioeconomic disparities, gender issues, and more. We have lots of couples coming up in different income situations and I also encourage you to apply to share your own situation. See my other comments in this thread, too.
Ramit! I wanna know what could happen if you go intro retirement in debt. What’re the implications? Why should we worry, but also not worry that much about retirement? Is a trip to Italy really more valuable than having proper care when I’m old and without children?
I say this as someone who saw my grandparents deal with this. If you don't have any retirement savings, you're likely to get into more debt and really suffer to scrimp by. My grandparents had savings. They had a small mortgage when they retired, about 400-500 a month. My grandmother got cancer 2 years after they retired and they spend the bulk of their retirement savings on that. For the rest of their lives, they were living off of about 2k a month in social security because almost everything was gone. that's hard when 25% of your expenses is debt. the more savings you have, the better. i still send my grandfather money probably once a quarter and my mom sends him something every month so they aren't in such a hard place. the mortgage is now paid off and the continued rising costs of living have made it almost impossible for them to live. they use food pantries to survive.
@@btbudgets this is so interesting! Thanks for sharing. I’d love to hear more about what people think you need to have in order to retire. Or what people think they can safely live off of. My grandparents retirement home is around 10k a month, and I just don’t know how someone prepares for that without being a little conservative or scared, frankly. My grandma lived until 99 and just barely made it work for her, luckily. She spent over 10 years in a nursing home!
@@kerianneodonnell9324 it truly depends on where they live. this country is so different it would really depend on the cost of living in the area where you live, your health, etc
@@kerianneodonnell9324 you need approximately 25x your annual spending (taxes, living expenses, guilt-free spending, etc.) in order to retire with some degree of safety (this is the equivalent of a 4% safe withdrawal rate). There are different modeling options out there, so make sure you look at ones where they take into account inflation as well as years in retirement (because you can be tricked into thinking you'll have more than you do but then run out at age 84) and compare/contrast good vs poor market performance.
2 minutes in and I had to stop to say this: Retired military does not mean 50s or 60s. I understand the need for an assumption, but it's a much broader range. If I had gone to retirement in the military, I could have been retired at 37. One of my brothers did so at around 40. All you need is 20 years, though the pension is being phased out in favor of the TSP. That said, I would agree they did not factor that into their retirement accounts, as the pension is not an account. It would definitely be in their income section. Edit: It is also not a pension in the traditional sense. There is no account invested in the market, building increases or in any way fluctuating. It is more a line item on the DOD budget. It is absolutely guaranteed until Congress says otherwise, or the government collapses. The TSP is more a modern pension, with visibility into the account and some investment choices.
Yeah they would have to be both officers and have at least 30 years to be getting a pension that high. I know plenty of senior enlisted making a fraction of that with 35 YoS. I did 12 years in the guard with 3 deployments, would have been on my 5 th had I not gotten out. I always thought the pensions were only 50 percent of their base pay?
@@11227denis The budget would be, as a whole, but Congress has to approve the budget. If the DOD tried to strike out that line, they'd have to justify it. Can't just cut it mid-year or something like that.
I absolutely love your content and have just recently started watching and learning, and I am glad I’m starting at the age of 26, but I do wish that you did some content for people that aren’t high earners, and also maybe people in Europe, from my understanding 401k ect are things available in USA; but I have not heard of anything like this in Ireland, which is where I am
I would love if you could one day explain WHY whole life insurance is bad and what are the differences rather than just the frustrated 'this is stupid' message
You just don't get that much and there's no growth. I cashed mine in and it was for 24k upon death and I pay less for $150,000 term policy. My plan is to self insure when I'm 66 or whenever the whole policy was paid up. It's just expensive for what you get.
It's as simple as comparing the low returns of the cash value of the whole life policy vs investing in the stock market. You can expect 3-4% returns on your whole life policy and 8-10% in the stock market. It's a no-brainer.
I hope the second couple move to a lower cost of living area and are able to loosen up their lifestyle a bit to find more joy in their day to day. They sound absolutely exhausted. Would also love to see some single folks on the channel at some point.
Loved the pension discussion. Husband and I both have pensions so I always feel confused when it comes to how much I should invest. This definitely gave me a little peek of what I should do.
The 2nd couple’s numbers are interesting to me. It’s as if they don’t know that properties can be purchased with financing. And I say that while thinking that buying a home with cash is a great idea if you make that your plan and the numbers work out. They also seem way more confident in the rising value of owned real estate vs the stock market given their ratios going towards savings vs investing. However, even in high appreciation housing markets, stocks typically beat real estate in terms of growth rate over a period of 10+ years. This is something that surprised me when I discovered it after buying a house at 29 years old. And that’s not factoring in the higher extra costs of home ownership vs the small fees for an investment account. Perhaps they really don’t want to pay a penalty for taking money out of an investment account early. I think that’s a better idea than taking the financing hit of getting a guaranteed 0-2% return over inflation in a high yield savings account vs around 7% return over inflation on average per year with big fluctuations year to year with money in the stock market. If you’re saving for 10+ years for a house in an investment account, the penalty is equivalent to about 1.5 years of time. And over 10 or more years, you have a pretty good chance of the return being around 10% or more per year on average. And that fee essentially makes the last year 0% rather than about 10%. That’s much better than getting 4.5% every year for 10 years. And for them it was 15+ years rather than 10. I think perhaps a good plan for them would be to house hack a multi family property purchased with financing after they move away. They certainly could afford a down payment for one and have reserves set aside for the extra maintenance and vacancy costs. Overall that’s a pretty easy side hustle. And it’s a side hustle with a lot of tax advantages. A lot of that income can be written off while you pay off the mortgage partially wit the rental income. And for purchasing a small multi family place of 2-4 units, the financing is the same as it would be to purchase a single family house. You can still get an FHA loan or a fixed rate mortgage over 15 or 30 years.
@@NFTMule lol has to be . Must be O6’s or higher. Always crazy to see the salary gaps between enlisted and officers. I didn’t know that the pensions go up with COLA. I went from military to state government which I will have a Pension as well but for my Pension it’s 60 percent of my last 3 years salary. Working in IT it won’t be terrible. By time I retire in 25 years I am not even expecting to see Social Security at this current state.
I think the thing that makes these hard to watch is the fact that people will be like, "OMG, how are we going to survive? We need help with money! Were so stressed! Whats going to happen to us? Theres no money left!!" Then you see their CSP and its like: 1.) 5 mil in investments 2.) 250k in savings 3.) Vanguard + RothIRA's maxed out 4.) less than 30% spent on fixed income 5.) spends 20% in guilt free spending Like what??... 😑😑😑 I wanna see people who have real money problems making serious changes to achieve a better rich life. THAT would make me want to subscribe. THAT is inspirational and motivating for peope who make waayyy less then these people make.
That is a wonderful and informative video. Thanks for sharing. Also kudos to people who have shared their finances and even made a follow-up video - that is awesome. Keep going guys, I wish you luck!
I retired from the military back in 2023, i have a new job and put my pension into my brokerage account as i dont need the income and can save it for when i nolonger work
