This is for all my fellow NPs or anyone who wants to chime in, not sure if this is right location for thread, please relocate if need be.
How is everyone saving for the future? I started my 401k 2 years ago after realizing the biggest financial mistake of my career. As an RN I never started a 401k because frankly I was young and dumb and didn't know too much about them. 8 years later I finally realized a 401k doesn't really change your paycheck by much because the money comes out before taxes. So now I put 10% of my pay a month into a 401k and my pay check may be 300$ lower each month which isn't bad. 3600$ a year I lose after taxes but 12000 goes into my 401k, it's a no brainier now!!
I also have a Roth IRA which by law only allows 5500$ I think each year. This allows me to put post tax money into retirement and any growth I make I can take out tax free after the age of 65 I think.
I started a money market account with a brokerage company as well last year which acts like a retirement account as far as growth but I can touch it at anytime if I need the funds with no penalty.
This is is my PSA to anyone who reads this, don't make the mistake I did, please start a 401k with your employer if you haven't started one already!!!
Dave Ramsey actually uses index funds for shorter term investing (5 years or so) but I've heard his argument against using them in general is that you can seek out funds with long histories of good track records that beat the index funds on rate of return since index funds only do the average of what the market does and half of mutual funds will beat the market average. I guess I don't see what's wrong with that. Would you enlighten me?
When asked to produce these index funds that earn 12% per year, Dave never could answer. The fact is it is very rare for an actively managed mutual fund to beat a similar index fund. It'll end up costing you more because the funds are actively managed and thus have higher fees. It is never worth it to pay someone who thinks they can time the market. Over the long-term, over 80% of actively managed funds underperform the benchmark (S&P 500). The best approach is to invest in the whole stock market and diversify with some bonds and international markets. So why does Dave Ramsey recommend these actively managed fees? Because he wouldn't make any money if he just told everyone to invest in index funds. He makes money because "advisers" (who are not fiduciary so are not legally required to give you advice in your best interest) pay him to get into his network. He then recommends these advisers to his listeners.
Check out this thread on Bogleheads where people are discussing Dave Ramsey's fund picks, which do not beat index fund benchmarks btw
Don't get me wrong. It's still investing, which is more than most people are doing in regards to their retirement. All I'm saying is that there are better and more efficient ways where you will end up with more in the end.
Don't get me wrong. It's still investing, which is more than most people are doing in regards to their retirement. All I'm saying is that there are better and more efficient ways where you will end up with more in the end.
Totally agree and it blows my mind that so many of us get to a ripe old age and all the sudden are like WTH? I needed to save for retirement? We, as RNs, NPs etc. make a decent wage and in most cases if someone lives within their means and starts saving for retirement things will go relatively smoothly in later years.
Contribute at least what your employer will match to your employer retirement plan. Mine doesn't have any match of substance although I still contribute 5% to a Roth 401k.
Make the max contribution to your Roth IRA or IRA. If you have an IRA get your planner to do a Roth conversion at end of year. It's a process.
Do not go to commission based financial planners.
Index funds beat mutual funds beat individual stocks. Forget any one guy's "stock picks."
If you're young a term life policy for a million bucks is reasonably cheap.
I fund my own long-term disability policy and hope to someday become psychologically disabled by work. It'll pay 70% of what I make plus whatever other career I choose to embark on.
Whole life policies may work if you're old and loaded like Jules A. They're a tax sheltern more than anything.
Automate your savings and retirement contributions. Seriously, this is the only way short sited humans can lead a rich life.
If you can, pay cash. If you're exceptionally disciplined one school of thought is to charge everything to take the 2% cash back. I'm not that guy.
Money market accounts generally have higher rates of interest. Online banks often have higher rates of interest bit can be a pain to access.
I believe in keeping a minimum of 4 months living expenses in liquid savings plus a separate account capable of meeting all of our insurance deductibles. My automated bill pay is a separate account, and we have a primary/personal checking on top of that for groceries, fluctuating utility bills, gasoline, underwear, pens, etc.
Loan consolidation isn't always bad. I've never done it but would.
Trusts are great but make sure your life situation is right for one. Wills are a must. LLCs are awesome particularly if you're an employee and your mom owns it. There are ways to make your assets darn near untouchable to litigious clients. You'll need about 10k in my area to make that happen.
Just because someone has a TV/radio show doesn't mean they know what they are talking about.
I agree. That's why I take everything I hear/read from strangers on the internet or on TV with a big grain of salt. I take in a lot of information, then talk with my local certified financial planner about the specifics of my situation ... and then make the choice that seems best-suited for my needs. I don't accept anyone's advice without questioning it.
There's nothing wrong with seeking advice from 'strangers' as long as you don't put all your eggs in one basket. For instance, Dave Ramsey is a 'stranger' but he gives terrible retirement advice, although his getting out of debt ideas are sound. The Bogleheads forum is full of 'strangers' who know more about retirement planning and investing in general than all the Dave Ramseys and Suze Ormans combined. Just because someone has a TV/radio show doesn't mean they know what they are talking about.
Nonetheless, seeking advice from a professional financial planner is a good idea for everyone, as long as the financial advisor is fee based and fiduciary. Dave Ramsey is awful because he recommends you use his network of advisers (who pay to get into his network), and they push front-loaded actively managed mutual funds which are costly, instead of low cost index funds. Dave actually recommends against both index funds and bonds, cementing the fact that he has no clue what he's talking about. Anyway, fee based fiduciary financial adviser is what you want. In the meantime, Bogleheads wiki is a great way to start learning about retirement planning and investing.
Dave Ramsey essentially targets people who I'd say make about 40k/yr.
Also never see someone who doesn't merely charge a flat rate.
Whole life policies may work if you're old and loaded like Jules A. They're a tax sheltern more than anything.
Dude I am neither old nor loaded. Well ok yeah I am old and I do have enough stashed to afford a hot young cabana boy after hubby kicks it but that is beside the point.
Dude I am neither old nor loaded. Well ok yeah I am old and I do have enough stashed to afford a hot young cabana boy after hubby kicks it but that is beside the point.
Specializes in Psychiatric and Substance Abuse Nursing.
I fund my own long-term disability policy and hope to someday become psychologically disabled by work. It'll pay 70% of what I make plus whatever other career I choose to embark on.
If I may ask, which company (Ameritas, Principal, MetLife?) have you chosen for your long term disability. I'm currently shopping around. What type of riders did you choose and find as being "must haves?"
If I may ask, which company (Ameritas, Principal, MetLife?) have you chosen for your long term disability. I'm currently shopping around. What type of riders did you choose and find as being "must haves?"
I'm at a Starbucks right now or I'd go back and look. I presently have MetLife Income Guard for disability. As I understand it, the policy is built to mirror the Own Occupation" rider I purchased when I had Mass Mutual. I'd give it a look. The benefit is a tad better and premium is $100 cheaper each month. When I had Mass Mutual it was 339. ML is 236.
I think Mass Mutual has more money (financial security) should a mass of sudden payouts be required of them, but MetLife definitely isn't going anywhere. I will note that Mass Mutual had far superior customer service, but for 1200/yr I'll allow MetLife to reply less responsively.
Specializes in Psychiatric and Substance Abuse Nursing.
I'm at a Starbucks right now or I'd go back and look. I presently have MetLife Income Guard for disability. As I understand it, the policy is built to mirror the Own Occupation" rider I purchased when I had Mass Mutual. I'd give it a look. The benefit is a tad better and premium is $100 cheaper each month. When I had Mass Mutual it was 339. ML is 236.
I think Mass Mutual has more money (financial security) should a mass of sudden payouts be required of them, but MetLife definitely isn't going anywhere. I will note that Mass Mutual had far superior customer service, but for 1200/yr I'll allow MetLife to reply less responsively.
mzaur
377 Posts
When asked to produce these index funds that earn 12% per year, Dave never could answer. The fact is it is very rare for an actively managed mutual fund to beat a similar index fund. It'll end up costing you more because the funds are actively managed and thus have higher fees. It is never worth it to pay someone who thinks they can time the market. Over the long-term, over 80% of actively managed funds underperform the benchmark (S&P 500). The best approach is to invest in the whole stock market and diversify with some bonds and international markets. So why does Dave Ramsey recommend these actively managed fees? Because he wouldn't make any money if he just told everyone to invest in index funds. He makes money because "advisers" (who are not fiduciary so are not legally required to give you advice in your best interest) pay him to get into his network. He then recommends these advisers to his listeners.
Check out this thread on Bogleheads where people are discussing Dave Ramsey's fund picks, which do not beat index fund benchmarks btw
Don't get me wrong. It's still investing, which is more than most people are doing in regards to their retirement. All I'm saying is that there are better and more efficient ways where you will end up with more in the end.