Thread: "100% of people who do not save money do not have any!"--Dave Ramsey
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Old 05-05-2023, 08:20 PM   #1233 (permalink)
Isaac Zachary
High Altitude Hybrid
 
Join Date: Dec 2020
Location: Gunnison, CO
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Avalon - '13 Toyota Avalon HV
90 day: 40.45 mpg (US)

Prius - '06 Toyota Prius
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Quote:
Originally Posted by redpoint5 View Post
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k (traditional or Roth - see "Why #4" below) up to any company match
2. Pay off any debts with interest rates ~5% or more above the current 10-year Treasury note yield.
3. Max Health Savings Account (HSA) if eligible.
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level
5. Max 401k (if
- 401k fees are lower than available in an IRA, or
- you need the 401k deduction to be eligible for (and desire) a tIRA deduction, or
- you earn too much for an IRA deduction and prefer traditional to Roth, then
swap #4 and #5)
6. Fund a mega backdoor Roth if applicable.
7. Pay off any debts with interest rates ~3% or more above the current 10-year Treasury note yield.
8. Invest in a taxable account and/or fund a 529 with any extra.

As an aside, while janitorial work makes decent money and is a respectable job, your intelligence seems like you could be earning more doing something else.

As an aside, aside, I would be tempted to keep my emergency fund in a stock market index fund. A credit card could cover any unexpected expense interest free for 30+ days while you sell whatever amount of stock is necessary to pay off the balance. The advantage is your emergency fund is on average earning ~7% (inflation adjusted).
Sounds good! So far:
0. I'm good with my Emergency Fund I think
  1. I've never had a 401K, so I'll have to figure out how to open one.
  2. I don't have any debts.
  3. We have an HSA account. So I could do that.
  4. I don't have an IRA or ROTH. I guess I better figure out the difference.
  5. Um, ok.
  6. I'll figure that out if I get to that level.
  7. I don't have any debts.
  8. Ok.

Aside: I probably could make more money elsewhere. I'm just not sure what that is though. I'm making more money than I ever have, and I've had many different jobs over the years.

Aside Aside: I was thinking of investing in the stock market for that very reason. I wonder if a 401K, IRA or ROTH can be a stock market investment, or are those just a type of savings account?

I guess you're saying don't put any cash towards a car than necessary?
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