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In which Suze Orman rains on my parade.

April 25th, 2012 2 Comments

 

Would it kill her to say, “Life is short.  Spend money on what you love.  Buy lots of shoes.  Have fun sister.”  I actually think she might keel over if those words came out of her mouth!

As I can finally see the light at the end of my very long, painful, practically shoeless tunnel of debt, I’m dedicated to being financially responsible.

 

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  • sandeep sharma

    1. At very minimum you should be saving $5K/yr for a ROTH or Traditional IRA.
    this equates to $96/ wk off your paycheck. A Traditional is tax deductible at year end. But if you withdraw early there is a penalty. Id say do a ROTH. You can withdraw when ever u like. The advantage is, you can allocate to securities including out of state municipal bonds and earn high interest yields sometimes as much as 11%, and pay no tax till you withdraw the money. So, if a Bond is $16.00/ ea. 1000 will cost $16,000. Interest/ month could be $110. Now $110/month x12 months = $1320. Try earning $1320 on $16K in 1 yr at a bank. Note municap Bonds in different states offer different rates.

    2. Open a SEP 401K or thru your company and start contributing. Here, what ever you contribute is deducted right off your gross. So if I earn $100,000 and contribute 15%/yr
    $15,000 is allocated to my 401K , and now I only pay tax on $85K. But I have also just downgraded my Federal tax bracket from 34% to 31%.

    When you leave any company, make sure to always roll over your IRA and 401K.
    Personally Id consolidate to one account, and invest in some high yield state ETFs.

    3. Build a portfolio using Google Finance. Pay attention to some local Municipals that offer Tax free dividends. Track some stocks AAPL and GOOG is a start. They are volatile and continuously growing, though expensive, but heh if u got the cash….

    4. Im NOT A fan for purchasing any wealth management products at the bank or third party. Remember when it comes to managing your finances, take control of your own cash, like you manage your diet, or wardrobe. The only person that becomes rich when it comes to investing thru a bank investment consultant, or wealth manager, is the bank or wealth manager.

    5. Open a TD account, or Fidelety, track your securities in Google Finance, and start learning about securities that interest you. If its fashion follow Michael Kors, Ralph Lauren,
    or Hermes stock, if its Technology, follow who ever interest you there. Pick companies you like, follow and invest, and plan your future the same way you manage your diet.

  • sandeep sharma

    Anyone that read this and purchased AAPL around this date at $560/share would be a happy camper today. AAPL trading at $612/share. And my analytics project this to hit $650 by July 20.