Financial Samurai

Slicing Through Money's Mysteries

Financial Goals By Age So You Can Retire Comfortably

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The sooner you start planning for retirement the better. Too many people wake up 20 years from now and wonder where all their money went. By having specific financial goals by age, your retirement will be more comfortable than if you had decided to just wing it.

I suspect being overwhelmed with choices is one of the main reasons why folks don’t start financial planning as soon as they find their first job. When you’ve got to decide between various retirement plans, various investments, and learn about various rules, it’s much easier to just hoard cash.

Financial Goals By Age So You Can Retire Comfortably

Heck, some people even find hoarding cash hard. It’s sometimes easier to spend all your money now on the good life instead of figuring out how to make your money grow over time.

Don’t procrastinate when it comes to retirement planning. The more time you have to let your money compound, the better.

To make retirement planning easier, let’s go through some financial goals to achieve by age. To make retirement planning even easier, I’ll just highlight one main financial goal by decade.



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Disadvantages Of The Roth IRA: Not All Is What It Seems

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Many disadvantages of a Roth IRA
If you contribute to a Roth IRA

Updated on July 1, 2020. Despite all that’s happened since I first wrote this post during the Obama administration, there are still many disadvantages of the Roth IRA.

For years I’ve been an opponent of the Roth IRA. After the government came out with its tricky dick way to let us all do a “one-time” conversion from our traditional IRAs, I knew something was up. The government was so successful in getting people to pay huge sums of taxes on their IRAs up front during the financial crisis that I just shook my head in disbelief. Now we are in another financial crisis in 2020, and I’m afraid the government will do the same thing.

As a personal finance blogger who wants to help you achieve financial freedom sooner, rather than later, it’s my duty to write this post to help you see the error in contributing or converting to a Roth IRA if you have not maxed out your 401(k).

Of course if the choice is between NOT SAVING and saving via a Roth IRA for your future, then the answer is that one should open up a Roth IRA rather than piss their money away on stupid stuff that depreciates in value.

However, do know that you are still pissing money away by giving more of your money to the government. And if the choice is between choosing a traditional IRA over a Roth IRA, choosing the traditional IRA is hands down the way to go.

Please read all the disadvantages of the Roth IRA to keep an open mind. You can contribute to a Roth IRA if you are in the 24% federal marginal income tax bracket or lower. However, there are strong arguments as to be made why you shouldn’t contribute to a Roth IRA.

I really hope this article will wake you up to the tremendous government brainwashing that is being conducted to get you to part more with your hard earned money. If you’re still in favor, at least you know the other side of the story and Uncle Sam thanks you!



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How Much Should People Have Saved In Their 401Ks At Different Ages

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The 401k is one of the most woefully light retirement instruments ever invented. The maximum amount you can contribute is $19,500 for 2020. Let’s go through how much 401k savings by age you should to live a comfortable retirement.

Although the 401k pales in comparison to a nicely funded pension, even more disappointing than thee 401k is the IRA. With the IRA retirement plan, you can only contribute $6,000 in pre-tax dollars. Further, you can only contribute if you make under $72,000 a year as an individual and $119,000 as a married couple. What about the rest of us?

Meanwhile, you have to make less than $139,000 a year as a single person or $206,000 as a married couple for the privilege of contributing the maximum $6,000 in after- tax dollars to a Roth IRA. I do not recommend doing this before maxing out your 401k.

Give me a pension that pays 70% of my last year’s salary for the rest of my life over a 401k or IRA any time! At least with the 401k, anybody can contribute.



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Ranking The Best Passive Income Investments

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After about the 30th day in a row of working 12+ hour days and eating rubber chicken dinners at our company’s free cafeteria, I decided I had enough. I needed to generate more passive income to break free. This post will highlight the best passive income investments in the new decade.

There was no way I could last for more than five years working in a pressure cooker environment like Wall Street. I started focusing on generating passive income in 1999.

However, it wasn’t until the 2008-2009 financial crisis where I became obsessed with building passive income. The previous financial crisis made working in finance no fun. I’m sure many people during the 2020 global pandemic are feeling the same way about their occupations as well.

We’ve discussed how to get started building passive income for financial freedom before. Now I’d like to rank the various passive income streams based on risk, return, feasibility, liquidity, activity, and taxes.

I’m updating my passive income rankings for 2020 given so much has changed since my original passive income rankings came out in 2015. I’ve included taxes as a key new ranking variable as well. After all, tax treatment can significantly affect returns.

The rankings are somewhat subjective, but they are born from my own real life experiences attempting to generate multiple types of passive income sources over the past 20 years.

The passive income journey is a long one. But thanks to innovation and technology, the ability to generate meaningful passive income is accelerating!



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States With No Estate Tax Or Inheritance Tax: Be Strategic Where You Reside

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Although taxes are astronomically high in California, one positive is that it has no estate tax upon death. As it turns out, the majority of U.S. states do not collect an estate tax. This is good because there is already a federal estate tax that tops out at 40%.

Let’s take a look at the list of states with no estate tax, also sometimes known as the death tax. We’ll also look at states that have no estate tax and no income tax.

Finally, I’ll highlight my top five states to have legal residence in when you die based on the combination of low taxes, natural beauty, and opportunity for your heirs. After all, you want to think about those who carry your proud name long after you’re gone.



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Personal Capital Review 2020: Best Personal Finance Tool

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After eight years of using Personal Capital’s free financial tools to track my net worth, manage my cash flow, and optimize my investments, let me share with you the most thorough and honest Personal Capital review about their free financial application.

From 2013 – 2015, I was also a consultant for the firm and therefore have intimate knowledge of their people, their technology, and their product. I still keep in regular contact with all the senior management.

It’s my belief that Personal Capital is hands down the best free financial tools you can find online to help manage your finances and achieve a more secure retirement. I’ve tried everything from Excel, to Mint, a plethora of other financial apps, and nothing comes close to Personal Capital’s tools.

With Personal Capital, you can do the following things for free:

  • Automatically track your net worth
  • Analyze your investment portfolios for excessive fees
  • Analyze your investment portfolios for proper asset allocation
  • Track and manage your income and expenses
  • Run various retirement planning calculations to ensure a better financial future

Personal Capital currently manages over $12.5 billion in managed client assets as of 2Q2020 and they track over $850 billion in assets for over 2 million registered users for free. This amount is a testament to their money management capabilities and product offerings.

Their competitive advantage is that they built their company from the ground up with technology at its core. As a result, they are much more flexible in tailoring offerings to meet consumer demand. Let’s move onto the detailed Personal Capital review.



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