Do you live within your means and how?

A lot depends on the city you live in. Making $35,000 in podunk isn't bad ... making it in a major market is shit. And you'll struggle.

 

I make $35K in podunk, which makes it easy to put most everything in the bank.

But I'd still like to invest. Just don't know how, or whom to trust.

 

The best investment you can make is an investment in yourself. That is what college is, but if you learn things which you can make income for yourself later or learn how to make home improvements, that may be better than investing in a stock.

I wouldn't worry too much about whether you have $15,000 or $20,000 or nothing in a CD at the end of college. If you graduate without any debt, you are ahead of the game. If you don't have credit cards or expensive habits, you are way ahead of the game. If that is your situation, you should be giving advice rather than asking for advice (OK, I'm kidding somewhat but there is a truth to what I'm saying).

Somebody once asked a top investor on Wall Street what was the most important advice he could give to regular people, and the investor said the most important advice was that he was their competition. That is the problem with investing in individual stocks - you could double your $4,000 next year - or, you could lose it.

I would say get in good habits in saving for retirement and learn about retirement accounts. Learning how to make home repairs would probably be time better spent than learning about investments. The other thing is to learn about real estate - how to buy and value property. Learning about these things will be the best investment you can make.

 

My wife and I could maybe, maybe retire right now at age 49. It would be kinda sketchy, but I guess we could manage. But we like working and we have some professional goals we'd like to accomplish. I'm willing to push real hard on the career front for about six more years, Lord willing, and then I'll be looking for a significant shift in priorities -- less work, more fun.

 

Our goal is to work until the last kid graduates from college. That should be another 22 years and we'll be about 60 then. After that, we've decided we'll go on a humanitarian/church mission or two to destinations unknown. Chances are we will be sent somewhere like Costa Rica or Bolivia and work a medical/educational mission.

Then, we think working a few months a year doing seasonal stuff at resorts or national parks would be a fantastic way to ride out our golden years.

If you don't know how to plan for retirement or to invest, all you really need to do is call someone at your bank or a brokerage. Even if you have next to nothing right now, they'll help you because they know how to make that next to nothing become something.

 

Great. I've finally found a topic I can argue about. I suck at everything else.

Unless I missed it in the pages prior to this post, I have yet to see the word BUDGET. People have given the advice to write down all the expenses, but no one has specifically mentioned the dreaded "B" word. We've all given pretty good advice on such things as how to slowly begin to save for retirement or cut back on the lattes, but not how to live within his means.

Here's how we do it, Pringle. Mrs. tbf and I both get paid bi-weekly. Therefore, we budget bi-weekly. We sit down together at the kitchen table, list our income for the period (it can vary a little in our situation) and then list our expenses. The balance at the end of the sheet will read "0" when we finish. We tell every dollar we make WHAT to do -- and then WE make it happen. It's up to us to hold one another accountable for sticking to the budget. It's up to us to make sure we are disciplined enough. And that's what personal finance is all about, having the discipline to do what you say you're going to do. PM me for more details if you'd like, for this is one of the two subjects I know enough about to help people with. I'll even e-mail you a copy of our budget sheet (it's an excel file).

For those of you who say you don't understand, start by reading "The Total Money Makeover," by Dave Ramsey. He's a fairly popular Nashville-based financial consultant who has an afternoon radio show on a couple hundred stations. Some people say he's crazy. I think he uses a common sense approach to the things we know we should be doing. If you'd like to know more about mutual funds, start by reading, "The Complete Idiot's Guide to Making Money With Mutual Funds." It's a great book that obviously starts with the basics.

Just remember: BUDGET. STICK TO IT. BE DISCIPLINED.

 

That's so true. Although I'm irresponsible, we do well enough to afford a decent lifestyle. But I have this friend who got a business management position about eight years ago. He bought a big house, using a large chunk of change from a house he sold after nearly paying it off. But he and his wife act as though they're somehow in a higher class. They're forever giving us tips on how to save on little things while noting their grand lifestyle. The truth is that both of their cars were donated by said friend's in-laws, as was much of their furniture. And the week-long vacations that they take twice a year are gifts from the in-laws, who own a timeshare.

 

BMWs and big houses aren't status symbols.

 

Look into land investments. Check out communities with enormous growth potential. It should be a gut feeling, most modest fortunes come out of that. Being that we travel so often you can see areas that could be comstock lodes down the line. Inspect growth and development ratios, and especially the educational system. The proportion of population to development should be a good, healthy curve even before you invest. If there's 50-75,000 people already and it's one-third or two-fifths developed, you've got a golden ticket in your hip pocket.

 

One thing to consider is marital status. Married professionals with no kids make out like bandits in most cases.

I think having a second income in the home is a key for a lot of people. I know it's true for me. If I were single, a lot of shit would have to change.

 

Absolutely.

While many expenses "double", the ones that do NOT are among the biggest expenses: Mortgage, property taxes, hazard insurance.

Two incomes, one mortgage.

Two incomes, one property tax bill.

If you have two incomes and no children and aren't socking away 15% of both your incomes for retirement . . . you are guilty of financial malpractice.

 

I'll be 52 later this month and I have a six-year-old daughter. So the answer is no, I can't retire any time soon. No problem with that - my two daughters are the joy of my life and are well worth it