Just start with any kind of per-pay contribution and you'll be up to five digits in a year or two.
i wish i knew where jobs that paid well enough to generate that kind of sock-away dosh grew. i'm dumping 10% plus a couple percent in employer matching from my pre-tax dollars, and it'll be another two years before i see anything in the fifth column.
sadly, from my own pragmatic viewpoint, i've been looking at the other side of the coin - interest rates on debt are almost always higher than return/growth rates on investments (unless you're clever and/or fortunate) - and thus, it's faster to get ahead by paying down high-interest debt.
if i had the money to both do that -and- dump chunks into some funds, i would. sometime around late 2007, the debt load will be pretty much wiped, barring anything bad and expensive happening, and future-oriented investing can take place.
I got lucky there, I learned very early to despise debt in any form. I didn't have a credit card until late 2003, at which point I decided I needed some kind of credit rating to speak of as people were running checks and treating me like I was bankrupt. I spent about two years doing nothing but paying my rent with it, then paying it off with my check card three days later. Every statement I got came with a credit limit increase. I have no idea what my credit rating is, but it's sure easier to get an apartment now.
As for per-pay contributions, if you put in 10% pre-tax and make $50k/yr, wouldn't that be $10K after two years with no kind of capital gain involved?
working for a credit union does have its perks - i know my credit score, for example (it comes with a halo and angelic voices, and very nearly one of those golden shafts of light from on high). why? because i've had the same credit card since my freshman year of college, have a long history of being on time with my car payments (this is considered "good debt"), and my utility bills have always been paid on time.
I was employing your MO until late 2000, when a lengthy chunk of time between jobs hamstrung my ability to keep my balance nearly zeroed out every month; after taking a poor-paying job to stabilize things, my most recent jobs have allowed me to make headway on debt reduction (as has becoming more savvy about debt management, and not being shy about coming right out and asking for better interest rates, higher credit limits, and so forth - if you don't ask, they won't give it to you, and if you do ask, the worst they can say is "no," but are more apt to say "how about this compromise?")... consolidating things with lower-interest instruments is the simplest measure most folks have available.
i'm not sure when i'll see a 50k/yr paycheck, but it won't be that soon. i'd love to, that's for sure.
also, i'm doing a bit of "hamstring the present to benefit the future" by paying my mortgage bi-weekly (at every paycheck); that, coupled with one mortgage refi, and i'll have my 30 year initial mortgage term paid off in something like 11 years, which saves me about hundred grand (if not more) in interest alone, but means i'm shelling out ~$1500/mo (to cover the payment (including some add'l funds used for high-interest debt consolidation), taxes, and insurance) rather than ~$750.
at the bottom of it all, finance is a balancing act. the bigger your income, the more stable your base. i've taken on some additional plates to juggle because i'm helping my gf get out of debt, too, so that's another "have a good plan for a better future by making a slightly less fabulous present" situation.
I've seen too many good friends get sucked down for years due to a couple months' worth of unemployment like that. Congrats for making headway, that's a massive achievement. When I was unemployed for three months, I resorted to closeout meat products, ramen, and outright begging. In retrospect, I think I would've rather been in debt.
Also, that's some serious budgeting, I couldn't dream of paying a $1500/mo mortgage payment. On top of that, isn't the cost of living relatively high in Florida?
2007-02-08 08:42 pm (UTC)
Sounds like a forced way to pay the mortgage down early.
The other option would've been to use a HELOC and make one lump sum payment to the mortgage at the beginning of the year (which you would pay throughout the upcoming year), and then pay both.
Or the other option, instead of getting a 30 year mortgage and paying whatever the cost of the bi-weekly payment, you could simply get a 15 year mortgage. But this would have been more beneficial before there was only about 1/8% point between a 15 year and 30 year mortgage.
I don't know what you said, but I'm coming to you for advice next time I have money.
*checks out ETF*
share price has, over the life of the fund, been pretty flat - this year's growth was due to a recovery after a serious falloff in value during 2005. however, the ~.75% monthly dividend doesn't suck...
I just got in at the right time with it, once in April and again in October. Even with just dividend reinvestment, ~8% growth per year is nothing to shake a stick at.
indeed. do they have a minimum initial investment? (my favorite mutual fund, VICEX, has a $3k buy-in.)
Nope, it's a CEF, so it's bought and sold per share just like a stock. Taxed like one, too.
And as for VICEX, I've got it in a "test portfolio" along with real estate ETFs, Quantum (since they bought ADIC I wanted to see if they'd finally stop sucking ass) and PLA (heh) and it's up 6% in a couple months. That's damn tasty. Whole portfolio is up 3.5%, only loser was Quantum (big surprise).
Hey Kevin. :-) I'll be up on the ninteenth, I have a flight that will land me in town that evening. My phone is dead today, but I'm hoping to get it fixed or replaced before my trip. How are you doing? What's your schedule like these days? <<<<<<<>>>>>>> ~Nicolette
I'm doing good, I'll be off work all of next week, heading down to Cinci on the 23rd.
Well, very cool. If I get up the night of the ninteenth, maybe I can see you sometime between the 20th and when you leave for Cinci. Should I pack those non working laptops? It'd be great to have one that works, and I want the information of of the dell latitude...but something tells me that they're both dynosaurs. Regardless, it's been months and months, we have to catch up.... I won't have a car with me so you or Pretty would have to fetch me somewhere, let me know if you think you can find some free time and I'll arrange mine around it. Oh, and let Pretty know I wear those neclases all the time and get tons of compliments on them...that was very sweet of her. Anyway, got to run for now, but tag me again when you get a minute. :-)
Yeah, bring the laptops and I'll see what I can frankenstein out of them. I'll get in touch later once I know my schedule.