Financial Samurai

$180,000 by age 30, $500,000 by age 40, $1 million by age 50, and $2 million by age 60. These are the rough estimates for what I think everybody needs to have in their 401Ks to have a reasonable attempt at a comfortable retirement. If you read the comments from my “401K amount by age” article, you will notice that those in their mid-30s and below tend to disagree with these amounts, while those older generally agree, verify, and accept.

I don’t know why younger folks aren’t willing to follow along. It’s often times just rebel and justify why they aren’t saving.  ”Live life!“, they say.  True, but who says you can’t live life while saving?  The easiest way to learn, is to listen to an older person who has gone through what you will go through. Perhaps it’s immaturity, or the way things are where every generation needs to question the next generation and the status quo.

There’s really no mystery to money. The more you have, the more you can make.  It’s all about building the NUT large enough so that when you make a fortuitous 10% return, you’re pulling in an extra $50,000-$100,000 on your $500,000-$1 million portfolio.  Saying you doubled your returns from $10,000 to $20,000 due to contributions is fine, but it’s really chump change and misleading.  Build the nut, so that you can have real returns.

If you aren’t on retirement track based on my 401k age chart and disagree with my figures, just do the math YOURSELF and see whether you’ve saved enough to retire on. I don’t think you’re going to like the results.

There’s one question that kept coming up over and over again, and that’s, “How can I save so much, if I don’t make so much?” It’s a fair question that needs addressing. One commenter mentioned my table must be of “California Currency”, which made me chuckle. The problem of not making enough and therefore not being able to save enough is an honest problem which I’d like to address via a change in mindset and a chart. Read more…

The 401K is one of the most woefully light retirement instruments ever invented.  The worst is the pathetic IRA which limits you to only $5,000 if you make under $58,000 a year for a traditional IRA to completely participate.  Meanwhile, you have to make less than $110,000 a year for the privilege of contributing after tax dollars in a a Roth IRA.

Give me a pension that pays 80% of my last year’s salary for the rest of my life over a 401K any time!  With the government only allowing individuals to contribute $17,000 a year in pre-tax income into their 401Ks in 2012, once again, our politicians fail us with their regulations.

You know from a previous post that the average 401K balance is around $70,000-$80,000, which is incredibly low given the median age of an American is 36.5.

As an educated reader who is logical and believes saving for retirement is a must, I’ve proposed a table that shows how much each person should have saved in their 401Ks at age 25, 30, 35, 40, 45, 50, 55, 60, and 65.  We stop at 65 because you are allowed to start withdrawing penalty free from your 401K at age 59 1/2.  Meanwhile, I pray to goodness you don’t have to work much past 65 because you’ve had 40 years to save and investment already!

HOW MUCH YOU SHOULD HAVE IN YOUR 401K AT DIFFERENT AGES Read more…

Feel like losing weight?  What a surprise, me too!  Like every other knucklehead, I went to workout on New Year’s day to lose some weight I gained during the holidays.  I got a sweaty two hour tennis match in and then hit again with my buddy for another 1.5 hours the very next day.  I’m not delusional to think that after two days I would lose any amount of weight, but I stubbornly got on the scale before and after anyway.

Hoping to see a loss of a at least a pound due to less water weight, the damn scale betrayed me.  In two days, I had gained 5 pounds from 164 lbs to 169 lbs!  How the hell does someone gain 3% more body weight in just 48 hours.  I didn’t gorge myself during this period, so I’m at a loss for words.  I could blame the flashing “battery” signal on the scale, but that’s just an excuse.  I suck.

At slightly over 5 feet 10 inches tall, 169 lbs is a lot to carry on the tennis court.  Allen Iverson of the 76ers was my height (listed as 6 feet), but could easily dunk and weighed only 155 pounds for example.  Ever since that trip to India 11 years ago, my weight hasn’t fluctuated more than 4-7 pounds (162-169lbs).  But, now I’m dangerously close to breaking this 11 year record with all the crap I’ve been eating.  I feel guilty because in high school, I was a trim 150-155 lbs.  I also feel guilty because I’m disrespecting the poverty I witnessed in India and all around me.

I don’t accept mediocrity in my work, so why the hell do I accept being overweight and mediocre in my health?  Makes no sense at all.

MAN ON A MISSION Read more…

Americans are rich by world standards.  With an average per capita income of ~$47,500, America ranks in the Top 10 in the world.  The other nine include Qatar ($88,300), Luxembourg ($80,000), Singapore ($57,230), Norway ($52,230), Brunei (~$47,500), Hong Kong ($45,000), Switzerland ($41,800), Netherlands ($40,800), Australia ($39,632), and Austria ($39,100).  The data comes from the IMF (2010), and the World Bank and CIA World Factbook collect and corroborate similar data.

If at birth, you had the mental capacity to choose where you’d like to live for most of your life, one of these 10 countries should be on your list.  Even if you end up being the most mediocre income producer, you are still miles ahead of much of the world.  Too bad many of us can’t pick and choose where we want to grow up and earn a living.  As such, it’s nice to understand how we compare against the rest of the world to give us some perspective.  However, the wages of the rest of the world don’t impact us significantly, unless we are solely focused on trade and competitive advantage.

What we should be curious about is how we stack up against the rest of our countries’ citizens.  If everybody earns $1 million a year, being a millionaire isn’t very special anymore.  Everything is relative.  Let’s learn about each others’ incomes shall we?

WHAT THE TOP 1%, 5%, 10%, 25% and 50% MAKE IN AMERICA Read more…

Yesterday was one of those perfect gastronomic days.  For breakfast, there was all you can eat fruit and pastries.  For lunch, some deliciously “low calorie” Greek baked spaghetti with garlic bread you see to the left.  To top off the evening, a bone-in filet mignon, with baked potato with the works, blue cheese wedge salad, and a couple glasses of pinot noir from Napa Valley.

All told, I probably consumed some 5,500 calories worth of food!  I didn’t feel incredibly sick to my stomach (OK, maybe a little bit!) because I made sure I played an hour and a half of tennis before dinner.  It was actually a wonderful experience since I normally eat half as much.  When I was in the cab ride home, I had an epiphany.

Perhaps the reason why there are so many large folks in America is because people purposefully gorge themselves in order to lose weight!  Eating great food is such a wonderful pleasure that it’s irrational not to.  It trumps any negative feels about packing on weight otherwise we wouldn’t let ourselves go.  Furthermore, the reason why there are so many people in debt is because it’s just so rocking fun to spend money you don’t have!  Finally, it feels great once you pay back that debt!  Double pleasure going both ways is why there is such a correlation.

GAINING WEIGHT IS THE PERFECT SOLUTION Read more…

Sometimes I feel like a genius.  Sometimes I feel like a financial dumb ass.  Today is not one of those days of stupidity.  It hit me during bath time the other evening that the secret to early retirement isn’t spending less than you earn, saving at least 30%+ of your after tax income, buying only what you need and living a frugal lifestyle.  Nope.  That’s just status quo where one should be living that lifestyle anyway.

What I discovered is so much deeper, and so much more powerful than anything ANY of us personal finance “gurus” have discussed.  The secret to early retirement and leisurely living is so amazing that I don’t know if I should even share with you guys since I could probably write a book, do a video, and make tons of money in the process.

Alas, I’m a nice guy, and am down with helping my fellow brothers and sisters get ahead so I’ll share with you the secret.  There aren’t any gimmicks, just the straight up truth.  Before you click the “read more” button, see if you can guess what exactly it is I’m talking about.  Think long and hard.  Now that you have, know that you could have just clicked “read more” anyway because you’ll never figure it out!

THE SECRET TO GREAT RICHES AND KICKING BACK Read more…

It’s apparently very common to live at home with mom and dad after college.  Some statistics have the figure at 80% of newly grads move back home.  Is it really that common?  Have I lost touch with reality, yet again?  After four years of college, where there are just ridiculous amounts of parties and unspoken amounts of fun, who on earth goes home and lives back with mom and dad?

Even if I was unemployed, I’d pay several hundred bucks and rent the sofa in my buddy’s living room or something.  Is there no feeling of guilt living at home with parents as a grown adult?  Perhaps not.  Right on my street, live three 26-27 year old young bucks with grandma.  Come on, how can these guys live with themselves living with grandma?  So I got to thinking, perhaps it is feasible to live at home with mom and dad, or grandma and still get girls!

STRATEGIES FOR GETTING GIRLS WHILE LIVING WITH MOM & DAD Read more…

Whoever said, “money can’t buy happiness” is either poor or wealthy beyond their wildest dreams. The incessant amount of studies by researchers trying to prove money can’t buy happiness is simply a result of the researcher’s own poverty or unhappiness. Because they are financially mediocre, researchers are trying to console themselves that it’s OK not being wealthy.

Generally, researchers have a higher sense of self because they have more educational training. Hence, it tears them up when they see other “lesser beings” make more than them. Meanwhile, those who continue to highlight research stating that money can’t buy happiness are trying to justify their own financially unspectacular selves as well!

You see, the financially mediocre are all in cahoots with each other. They’ve banded together to proclaim that being middle class regular people is good enough. It probably is good enough for most people, but not for these unsatisfied folks who think they are smarter and better than everyone else!  If being middle class or poor was good enough, then they’d leave well enough alone and be happy with their financial mediocrity.  It’s a hard pill to swallow, but swallow they must.  Not everybody can make multiple six figures, live in million dollar houses, and pay cash for luxury automobiles. That’s just life and they are trying to bring you down.  Don’t let them!

THE TRICKY RICH Read more…