by Trent Hamm
Available in 24 free installments
Owner:
You'll hear a huge variety of advice on how to save for retirement. Most of it is contradictory. In truth, very little of it matters as long as you follow a few key principles. You should be saving 10% of your income at the bare minimum. You should not have more than 5% of your retirement in the stock of any one company. If your company doesn't have a retirement plan, open a Roth IRA on your own with a reputable company like Vanguard. If your company offers any matching on your retirement, contribute enough so that you can get all of it. If you don't know what you're doing, put your money in a "target retirement" fund so that it gradually becomes less risky (read: less stock-heavy) as you approach retirement. If you actually do those things, you're already ahead of the game.
What About College Savings?
College savings are next. If you have kids, set up a 529 college savings plan [96] for them and start automatically putting a certain amount into this account each month. There are a lot of different 529 plans available to you, but don't get stressed out by the details - pick a good one [97] and start saving now instead of hunting for the "perfect" one and wasting valuable investing time. The plan I use for my own children is College Savings Iowa, which is managed by Vanguard.
Pay Off All Debts
If all of these are covered and you still have cash left over (which you will, given some time), the next step is to pay off all of your debts. Get rid of your car loans, your student loans, and your mortgage using the debt reduction method described in the previous section.
Invest!
You might also want to start investing
at this point. My recommendation is
to buy low-cost broad-based index
funds because they don't have many
fees and grow very nicely over long
periods of time [98] , Don't invest in
individual stocks unless you're quite
content to lose the money (i.e.,
gambling) or you want to invest many,
many hours in research - something
few people want to do. I personally
invest with Vanguard directly through vanguard.com - their fees are miniscule, they offer
a huge array of index funds, and their customer service is stellar.
Save Money! Photo by voobie.
Everything PF
http://www.thesimpledollar.com
Idea #5: Control Your Own Destiny!
COUTROL YOUR OWW DEST(kJy!;i ^ * MOr Hour 6 E , ufr rich
* Follow yo^t P/*S5/o<u5 *
HAppy
Freedom is not merely the opportunity to do as one pleases; neither is it merely the opportunity to choose between set alternatives. Freedom is, first of all, the chance to formulate the available choices, to argue over them - and then, the opportunity to choose. C. Wright Mills
Most people see the goal of all of this as being rich. That's why you see so many books about millionaires on bookstore shelves - being a millionaire is something many of us aspire to, right?
Here's the secret: it's not about being rich. Having a big net worth is just an indicator of what this whole process is really about.
It's all about freedom. Freedom from debt. Freedom from supervisors telling us what to do. Freedom to spend the time to do things right. Freedom to try out new things and follow our interests. Freedom to sleep until eleven one day then stay up until two in the morning working on what we're passionate about.
That's what most people really want -1 know that's certainly what I want. Having a big bank account just means that I'm not beholden to others. I can follow my passions and dreams wherever they take me. If my job is not satisfying to me, I'm no longer tied to that paycheck -1 can just get up and walk away. I can do whatever makes me happy and avoid most of what makes me sad, without regrets or worries.
It might be a bit unpleasant to substitute a Starbucks latte for a homemade cup of joe, but compared to that, how can little things possibly compare?
It's a lot of hard work to climb that mountain, but the air up there is the sweetest thing that there is.
Do You Want To Know More?
If you were excited by the information in this document, there are a lot of sources out thereto find out more.
The Simple Dollar
http://www.thesimpledollar.com /
