Specifically if for retirement, time is your best friend. Anything you can put aside will be multiplied down the years and be much more when you need it most
this post was submitted on 20 Dec 2024
164 points (97.1% liked)
No Stupid Questions
36183 readers
995 users here now
No such thing. Ask away!
!nostupidquestions is a community dedicated to being helpful and answering each others' questions on various topics.
The rules for posting and commenting, besides the rules defined here for lemmy.world, are as follows:
Rules (interactive)
Rule 1- All posts must be legitimate questions. All post titles must include a question.
All posts must be legitimate questions, and all post titles must include a question. Questions that are joke or trolling questions, memes, song lyrics as title, etc. are not allowed here. See Rule 6 for all exceptions.
Rule 2- Your question subject cannot be illegal or NSFW material.
Your question subject cannot be illegal or NSFW material. You will be warned first, banned second.
Rule 3- Do not seek mental, medical and professional help here.
Do not seek mental, medical and professional help here. Breaking this rule will not get you or your post removed, but it will put you at risk, and possibly in danger.
Rule 4- No self promotion or upvote-farming of any kind.
That's it.
Rule 5- No baiting or sealioning or promoting an agenda.
Questions which, instead of being of an innocuous nature, are specifically intended (based on reports and in the opinion of our crack moderation team) to bait users into ideological wars on charged political topics will be removed and the authors warned - or banned - depending on severity.
Rule 6- Regarding META posts and joke questions.
Provided it is about the community itself, you may post non-question posts using the [META] tag on your post title.
On fridays, you are allowed to post meme and troll questions, on the condition that it's in text format only, and conforms with our other rules. These posts MUST include the [NSQ Friday] tag in their title.
If you post a serious question on friday and are looking only for legitimate answers, then please include the [Serious] tag on your post. Irrelevant replies will then be removed by moderators.
Rule 7- You can't intentionally annoy, mock, or harass other members.
If you intentionally annoy, mock, harass, or discriminate against any individual member, you will be removed.
Likewise, if you are a member, sympathiser or a resemblant of a movement that is known to largely hate, mock, discriminate against, and/or want to take lives of a group of people, and you were provably vocal about your hate, then you will be banned on sight.
Rule 8- All comments should try to stay relevant to their parent content.
Rule 9- Reposts from other platforms are not allowed.
Let everyone have their own content.
Rule 10- Majority of bots aren't allowed to participate here.
Credits
Our breathtaking icon was bestowed upon us by @Cevilia!
The greatest banner of all time: by @TheOneWithTheHair!
founded 2 years ago
MODERATORS
100% anything you can do is great.
My girlfriend and I have each been putting $50/month into an investment account instead of paying for insurance for our dog, that way if she ever needs a big procedure I can pull money from there if I don't have the savings for it. We've been doing this for 3.5 years and have now built up a good amount! I'll divide the numbers roughly in 2 so you can see what you could be looking at:
Total $2750.
Deposits $2200.
Gains $550.
That $550 will cover two vet visits if you're lucky
Still better than pet insurance though, which is a scam (I mean all insurance is but especially pet insurance)
I don't know about that. Both of my cats would be dead if not for pet insurance. One needed a $10k surgery this summer that I was able to afford because of my pet insurance. The other had $4k of surgeries the year before. Both instances my insurance covered 70%. Neither of my cats are much more than 5 years old, just bad luck with their health.
Right that's about all they cover, the freak stuff that costs thousands. But for routine visits, vaccinations, and even small conditions that aren't life threatening, they're useless.
Correct, but thankfully that won't be a surprise since it is evident when you are enrolling. It's up to each pet owner to decide if that's worth it.
In our case, a few hundred dollars per year to make ER visits financially bearable is a good value.
Pet insurance is a good thing for people with a large number of animals - particularly rescue animal boarding.
For most people though, no.
The others have made great points about how any amount adds up. Especially with compounding.
But the most important reason me just be making it a habit. If you are saving $50/month you have a place to put your savings and an investment strategy for that money. The next time you get a pay raise or get rid of some recurring spend it will be natural to start saving $60/month, then $100 and more and more. It is much easier to improve an existing habit than starting a new one. So as soon as you have the chance start that got habit.
Yes, and actually with low amounts of money to work with you can make your contributions very efficient. To best spend save for retirement, choose the first option from this list that applies to you (and if you are able to save more later, go down the list after exhausting each option):
- 401k up to maximum company match
- pay off high-interest (>4%) debt
- IRA up to the contribution limit
- investment-type HSA up to the limit
- max out 401k contribution
- personal investment account without tax advantage
For most people, it's recommended to use a traditional 401k and a Roth IRA, but it varies by situation. As for what to invest in, I would recommend a popular low cost ETF or index fund, like Vanguard or SPY. You can also look into ESGs if you want to do good with your money, but your expected earnings may be lower. I'm in ETHO and TICRX.
You might check out fire@lemmy.ml or personalfinance@lemmy.ml if you have questions about getting started.
Absolutely 100% yes yes yes.
Compounding is your friend. You can play with the values all you want, but this calculator showed me that if you deposited $50/month at 5%/year compounded annually, you'd end up making >$1800 in profit over ten years. Realistically, you should be able to get a better rate and shorter compounding periods once you've passed the threshold amount for a mutual fund or GIC.
And that's assuming you never increase your deposits.
Realistically, whenever you get a raise you should assign some of it to increasing your monthly payments. Your goal should be to increase your payments faster than inflation. Get a $2/hr raise? That'll probably add $250/month to your paycheque after taxes. You should be able to squirrel away $25/month from that at least.
Here's a great piece of advice from The Wealthy Barber (Canadian financial dude): Pay yourself first. See if you can get your investment amount taken directly off your pay, and then you'll never see it, thus be tempted to spend it.
His other advice is to set a goal of 10% of your income to invest for retirement. Seems like a lot, but it's doable for most people who are talking about investing anything, like you.
Remember: The biggest factor in how much you make from investments over time is how early you invest. Invest now. Invest regularly.
Compounding debts need to go first if their interest is higher than your savings.
Nah, just piss it away.
If you bought bitcoin for $50 every month in the past 10 years, do you know how much you'd have today?
They said investing, not gambling
Someone didn't do the math
Yes. So much yes.
Yes. Investing is always worth it unless you have credit card debit.
Set it up to automatically invest into the lowest fee index fund your broker offers.
load more comments
(11 replies)
As much as I hate to send you to Reddit, the r/personalfinance flowchart is hard to beat for most people. I’d recommend you start there to make sure you’re not overlooking something like your emergency fund.
load more comments
(12 replies)
That's 600/yr and a long enough horizon that most diverse portfolios are likely to be net positive (I'm seeing about 5,000 gained with 8% growth in a basic savings calculator)
I'd spend those 10 years trying to free up cash flow but time's a powerful weapon regardless
8%? Thats 0 gains with inflation, right?
7-8% is the standard value used after taking inflation into account. It's really 10%, but inflation eats 3% yearly, on average. Using the metric this way also conveniently means that the value you calculate for the end of compounding (in 35 years) is interpretable in todays dollars.
So 7% interest on 50$ monthly for 35 years means total principal of 21k$ and total of 83k$ (todays value).
See https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
view more: next ›