LOL
Last year savings for me was somewhere ~40% of take-home pay…But a big chunk of that is going to pay for our wedding this year.
haha wow. He sure does love to talk about how much better than everyone else he believes he is.
Yeah, I traveled a ton in my 20’s and spended pretty irresponsibly. Do not regret. That being said, I would love to save more now. We’re single income so 14% to me feels like a herculean feat.
that… or he’s done one helluva good job trolling this forum for a year or so now…
I save a depressingly high percentage of pay. It’s good to save money, but one implication is that I don’t enjoy enough things to be willing to spend money on them. I suppose people spend money going out to eat in NY. However, since I regularly visit expensive restaurants as part of work, I do not feel the occassion to go out myself. When I travel, I prioritize visiting relatives, since my family is globally scattered. This reduces the cost of travel, since sitting around in your family’s house is less expensive than going to a safari or something. The other thing is that I thought about this the other day, and about 50% of the value of my physical belongings is in the form of watches.
I have no idea of the percentage. I max $ contribute to my 401k and cash piles up in the bank until Mrs. higgmond decides it time to buy a new, more expensive, house or ridiculously over-priced furniture for the current one.
^ #truelife
Hard to argue that though, at least you didnt waste it on material junk you didnt need. Those memories will last a lifetime.
Between rent & student loans I dont have much disposable income, but I do try to make a point to save a bit. Took a new job a year ago and that has finally allowed me to start putting a bit more away into savings & brokerage.
Are pension/401k plans or whatever common down in the U.S.? My work “pension” (really just a restricted 401k) is I contribute 6%, employer 9% of gross. I find between 10-15% is common here. Something that Vandy referenced earlier when pointing to vMoney Mustache though is saving is only have the battle. If you’re only spending 60% gross pre-retirement, then retiring is really easy relative to if you need to replace 100% of your income.
Any professional employer has one, but the contributions and rules vary like crazy. Between the contribution amounts, caps, timing of contributions, vesting period, etc. I found I was explaining it to my own coworkers a couple times a year at my old job.
The 401k at my new employer kind of sucks to be honest. 50% match up to 6% of salary and a 5 year vesting period on the match. I’ll make do with it just because at least I have the sense to save outside of my 401k too.
My old employer it was $1 for $1 up to $3k or 4k and then at year end they’d kick in 6.5% of your gross pay from that year. But you had to be employed on that date to get it. My former life at a Big 4 firm, they matched 25% up to 6%, 5 year vesting, but they kicked in 3-6% of salary at year end depending on your level in the company.
401k’s are basically the norm. I get 100% match at 4% so thats what I do, the retirement plans in the US suck compared to the rest of the world. They also give you terrible investment options with oversized fees usually, its a massive scam.
I saved close to 100% during the first few years out of school. The company I worked for provided everything. I expensed $150 hiking shoes. Never a question. Never any guidance. The health insurance was great as well. Part of my contract was that if the insurance didn’t pay 100% for some reason, the company would pick up the difference. Yeah, I quit that job. Never cry a river for me. I’ve made my bed. And blowing your nut on a wedding has to be the poorest life decision ever. Find a new girl if you must. Postpone the party. Whatever it takes.
Vandelay,
I read mrmoneymoustache sometimes as well. Definitely an interesting perspective on realizing what you can control and why you should prioritize financial independence over material possessions. I thought I was good at saving and not over-spending until I read some of his stuff and a few other books.
Have you read Rich Dad, Poor Dad? I’m in the middle of reading it and he’s making the argument that you need to incorporate to realize tax benefits that 95% of the world don’t realize. He basically cites that corporations earn, spend, then pay tax, whereas most people earn, pay tax and then spend what’s left. I don’t know much about taxes, but it seems like this can’t be as simple as starting a small business and then basically running all personal expenses through the corporation as ‘business expenses’…but i could be wrong.
For example, let’s say I want to own a second home and rent it out. If I form an LLC and run the rental property as a business, can I go out and buy a masarati as a ‘business expense’? If so, I basically bought myself a new car using untaxed income from my rental property. If I bought that car using the income from my rental property (in an unincorporated business), I’d have to pay tax on that rental income first.
It can’t be that easy…right?
Good luck with that. Even the IRS has discovered big data. But yes, huge advantage if you’re self employed. I put away more tax-free in qualified plans every year than most of you make, well, at least greenie anyway. Fair it is not.
That’s called tax evasion.
Do you need a vehicle for that business? Is a Maserati suitable for that? Don’t forget you still have to buy the damn car and spend the cash or sign the debt. So in theory, yes you could, but if they ever catch on the IRS could disallow the deductions. I mean no reasonable person would think a Maserati would make sense as a car you needed to deal with a rental property. You always run the risk of an audit, and the chance of getting audited goes up materially if you’re self employed or have lots of weird deductions like that.
There are lots of perks of self employment and other stuff like that, but there are also pitfalls and if you play fast and loose with it, they probably will catch on.
^ Small businesses do that all the time. For most small business owners if it can be classified as a business expense they do it.
New vehicle? Business expense. You need it for transporting clients and business trips. Mercedes seems excessive for that? Compare that to corporate aircraft and company drivers that are expensed (I’ve seen aircraft expensed too). I’ve heard there’s a way to lease the vehicle with heavy depreciation somehow within the corporation then sell it to yourself as a personal vehicle after a few years to really optimize the tax benefit but don’t know the details of it.
Think a family trip can’t be expensed? Not if every family member is employed by the business in an executive capacity on paper and the trip is a corporate retreat / offsite. I’ve seen that too.
New computer? It’s for the office. Cell phone? Work phone. Etc. etc.
It has to be within reason, but within reason can be pretty broad.
I’ve said it before. RDPD is the worst ever financial book. Ever. Worst. Worst Ever.
I think I’m going to read it again, just to see if there is one single useful piece of advice that doesn’t advocate fraud or deceit. (Tax fraud, insider trading, weasel clauses, usury laws, etc.)
I did intend the masarati to be tounge in cheek… hell I’d take a ford focus if I can buy it on tax free income. Agree that I’d probably get audited real quick buying a lavish car for something like this.
From what I can tell it seems to be a pretty sweet deal. Deduct the interest payment on the mortgage, deduct the maintenance, the utilities…depreciate the property… there’s almost no ‘income’ left to be taxed. On top of it it’s cash flow positive and you get a fully paid off home at the end.
Worried about not finding tennants to rent the place? Form a LLC and flile for bankruptcy if need be.
Seems pretty shady to me but I’ve always heard that the rich don’t pay their fair share. Even buffett and other rich people say it. I guess this is just the way it works.
I agree with this part.