Poll: How involved are you in financial planning?

Our goal is to retire in our early 50s. We fund both our 401(k)s to the max, and then save an additional 10% of our pre-tax income into our own private retirement portfolio.

Stocks, bonds, gold, and cash. That's the way to go.

erm...

I have a growing savings account. I have 401k. And I live paycheck to paycheck.

right now i'm incurring debt like it's going out of style :p
living pay check to paycheck, plus some :p

however, when i was workign full time i was investing in RRSPs and growing a savings account, two in fact.

I think my intention was that you picked what represented the upper reaches of how much you plan, not to the exclusion of an option before it. So the 401K/annuity folks can also have the savings account...the stock players might likely also have the 401k and savings account, etc. That was my logic anyway, to try to deliniate levels of planning.

The reason I was curious is because it seemed there has been a shift in the community in some respects. I mean, there always was a big chunk of us around the same age...and with that big chunk aging (like, weird, I was 21 when I got into Fruvous and I'm 28 now) it fascinates me that we talk about different things on the wall. I mean...maybe I'm just only noticing it because it applies to me now but 5 years ago I can't imagine us talking about stock prices and careers and taxes and some of the scary grown up shit we sometimes get into on the wall these days. :)

Am I the only one surprised? And is it growing older or is it just getting more capitalistic? :)

So...yeah...I was just curious...because I think 5 years ago this poll would get wildly different results.

and very little savings... and I live paycheck to paycheck. So... I guess 401k should be, like, at the bottom of that list.

:)

But still...in terms of planning for your future it's still probably more involved than a savings account, you know?

a 401k is a form of saving. And living 'paycheck to paycheck' with a 401k isn't really, because if you want to take home more, you always have the option to.

I always thought that living paycheck to paycheck kind of implied that you're not able to save anything, because everything you earn goes to pay rent and other necessary expenses.

(and yes, I know I didn't hit the reply button. that's because more than one person has made comments to this effect, so I wanted to respond to all of them. :)

See, I think it's less so.... 401k just comes out of your paycheck.. and you kinda forget it even exists. heh.

I'd also be curious to know how many here have a planned out budget of their expenses. Living paycheckto paycheck also means to me that someone doesn't really have an idea of what their finances are.

Me, I'm so anal retentive I have a detailed budget and could tell you where every cent we have is located/allocated.

It shocked me to hear that last month the average personal savings rate in the US dropped to 0.4%, which means that out of every 100 dollars the average American earns, they save just 40 cents!

Do you manage your 401k? I mean you've probably picked your fund allocation percentages (assuming you have choices) when you started it, but do you ever look at how it's doing and rebalance your investments at all?

Yes 401K is a type of savings...but it does have more complicated rules and is something a lot of people get involved in muchlater in life than when they start a bank savings account.

And also, I can see how you can live paycheck to paycheck even having a 401K because having one and it having money in it does not necessarily mean you are contributing to it at this particular time. As you say, you have the option to take home more. So if you take that option because times are tight...your 401K still exists and is hopefully still working for you.� I have money in an annuity...but that doesn't have a lot of bearing on the fact that I currently struggle with my monthly expenses pretty badly. So yeah...there are ways to have uncommon combinations of these items.� What I'm mostly after are the indicators of how much we are planning towards "the future", whether that be housebuying or wealth growth or retirement, etc. Or who is not able to think about the future yet at all and are trying to hang on in the present.

Well I'd break that down a bit.� Living paycheck to paycheck when you have a good salary may mean someone doesn't really have an idea what their finances are. But if you have a low wage or similar circumstance...I'd think it's more about just not making enough to cover your basic needs reliably.� There's not getting a handle on your finances, and not being ABLE to get a handle on your finances.� Your level of control over the result differs.

I live paycheck to paycheck and I have three jobs. I know where every dime goes and how much I need to just scrape by. I don't live lavishly but I have a lot of student debt. Right now, saving simply isn't an option without starving or bankruptcy.

Fair enough, I can see that distinction.

I do wonder sometimes about even low wage earners who live paycheck to paycheck. There are some I know that may earn a low salary, but they also seem to spend money on things that, to me, would be luxury items if I were earning the same amount. Things like satellite TV or cable, buying little technogadgets like mp3 players or palm pilots, etc.

I'm not saying that everyone who earns a lower wage does this, and I have lived at a salary (granted during college) where I did essentially live paycheck to paycheck, so I understand the struggles. There do seem to be a certain segment that seem to waste money on what, in my opinion, would be frivolous and luxury items or status symbols.

Then again, I know a guy who makes very good money, but truly lives paycheck to paycheck. He just can't understand why he can't save, yet he leases a new sports car every 3 years, has all the latest "cool" gadgets,and hell, even spends $10/day on coffee!

Not really... I picked one of those self-managed portfolio model thingies that they do....
I just don't want to worry about it.

I say we hit up that 1 independently wealthy person for money.� Feeling philanthropic�1 person?�:)

smatts

y'all. i play on fhdc to *distract* myself from work, not to talk shop. :) now that i'm making more money, i have a 401(k), but i'm definitely not as active in managing it as i get paid to encourage other people to be. which reminds me, i need to enroll in my benefits before the end of the day.

yeah, today was our open enrollment deadline as well.

Hee, and today was the deadline for our employee stock purchase plan. Which I decided finally to go for because our stock is going insanely high and I'm sick of saying "it won't go higher" just to find months later that it in fact has. :)

See? now you jinxed it, though... and it'll crash.
;)

Well see with this plan, now that I'm enrolled, it's OK if it crashes as long as it works its way back up in the next 6 months. :)�� The deal is you can put between 1% and 10% of your salary each pay period towards the plan...at the end of the 6 months stock will be given to you based on how much can be bought with the money you put in. The price it gets bought at is either the price at the beginning of 6 months or the price at the end of 6 months, whatever is lower. So if it tanks and then grows...I get it at the tanked price. If it doesn't tank but keeps growing, I still do OK. :)� If it shrinks at the end, it's not as good but I at least get that purchase price and the hope it'll go back up again.

Yeah, it's a risk. But I didn't participate last time and people got all their shares for 70 something and it's 124 today. :)

If you're fairly young like most Fruheads, you really ought to be fully invested in the stock market. If you have index funds available in your choices, go 100% with them. S&P 500 funds are a good bet. Actively managed funds are a complete ripoff, and you'll almost never "beat the market" because of the outrageous invisible fees they charge. It goes without saying that you should max out your 401(k) if you can afford it. It's about the best deal going as far as tax goes.

Oh, and if you have an ESOP, be very wary about buying and holding your own company's stock. If the stock price goes in the tank, your job will probably follow, and you'll be doubly screwed.

You shouldn't ever be "fully invested" in any one investment vehicle (stocks, bonds, cash, etc), that's just silly. Even "conventional wisdom" says that young people should have a 80%/20% mix between stocks and bonds respectively.

OK! We get the point. We realise you're better than everyone else and you know more than the rest of us about everything. Sheesh.

Ok, fine, I'll shut up and not share the information I've learned so that someone to whom investing and 401(k)s might seem too complicated won't have the chance to maybe learn a thing or two and make investing less complex.

OK...what I don't understand is why you say such a thing to him and not to Josh. To me they were both doing the same thing...offering advice based on their experiences and knowledge that we may or may not have. I don't think either one did anything wrong, but you start spitting venom at the one who happens to be the one you don't like.

I apologize to everyone for continuing to take the tone further than it should go...but it just didn't seem fair to lash out that way.

There's a lot of information available. Consider your options carefully. The perfect plan is one that is geared for YOU, based on YOUR situation, YOUR risk tolerance, YOUR income, etc.

Not to offend anyone here or elsewhere, beware anyone who says "invest in this!!" when your information hasn't even been examined.

I strongly recommend taking advantage of 401(k) plans, especially if your employer matches. Get some professional advice if you need it.

agreed. And thanks for putting it much more nicely than I could have.

:)

From his first comment in the thread, he's been obnoxious about it. Josh's advice is friendly. Starfox's advice is cold and businesslike and condescending.

Plus, you're right. He does happen to be the one I don't like. And I'm not apologising for it, either.

are you going to apologize for misspelling "apologizing"?

;)

are you going to apologise for punctuating the British way while criticising my spelling? :)

aww. you're just mad because he's better at being obnoxious and condescending than you are ;)

Oh come ON.... *nobody* beats lawrence.

:D

No... but... I *would* like a nice tea.

Well, for him it comes naturally. I have to work at it. :)

i live paycheque to paycheque

and 401(k)'s don't exist north of the border, or at least, not under that name. the federal pension plan is called CPP and retirement funds are usually called RRSP's.

Funny, ever think that your opinion of me is coloring how you read what I post? There are at least two people here who did not read my messages that way, given the frumsgs I've received.

I happen to have alot of experience and knowledge of investing, and I'm sorry you view that as being condescending.

you elitist bastard!!!!

Well, I don't think it's what you're saying... I think it's the way you say (said) it.... "that's just silly" etc.

That said, I do appreciate your input.

Well hence the "401K, annuity, etc" to group into it all similar programs. :)

Hrm, okay, point taken. It didn't sound that way in my head when I wrote it, but I can see how some might take that the wrong way.

Personally, you've given me something to think about.

Once I actually *have* money. Ugh.

If you're in your 20s like most of us, and you're saving for retirement, there's nothing wrong with 100% stocks. Stocks have always outperformed bonds by a huge margin over a period of decades, and it's pointless to be overly safe when you have 30-40 years to ride out the bumps.