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You don't seem to get the other half of the advice - earn more money. Get better at making money. If you spend a lifetime to save $100,000, you won't be a milli

You don't seem to get the other half of the advice - earn more money. Get better at making money. If you spend a lifetime to save $100,000, you won't be a millionaire.

pjc50 10y ago
"Earn more money" seems like the most tautologous kind of financial advice.
massysett 10y ago
The advice in earning money is good. The advice on where to park it is absolutely awful. Learn from Trump and Romney here: you must get the taxes under control. If you put 100k into a bank account, it will earn nothing and taxes will eat you alive. The point of a 401k is that it is tax advantaged and the money is there when you get old, when you need it. I can understand piling money in a bank if there is something you plan to do with it. But piling 100k in a bank when your only plan is "so NOW I am ready to do something with it" is some of the dumbest financial advice I have ever seen. Even if this guy is good at making money, he must be even better at spending it, and the tax man is going to be his biggest payee.
- zaccus 10y ago
  >If you put 100k into a bank account, it will earn nothing and taxes will eat you alive. Huh? Assuming this is all after-tax money and isn't earning anything, what would you be paying taxes on exactly?
  - massysett 10y ago
    You pay taxes when you earn the money as salary, pay taxes on the interest. With a 401k, you pay no taxes when you earn the money as salary, and the earnings compound tax-free. A bank account is the absolute worst place to park any significant amount of money. The only reason it's better than a mattress is you don't have to worry about the bank catching on fire.
    - zaccus 10y ago
      You pay taxes when you withdraw from a 401k, and the IRS has minimum distribution requirements that ensure you will pay taxes on all that money at some point. Personally I think a Roth IRA is the better deal from a tax standpoint -- pay taxes on contributions and then you're done. With a long enough time horizon and a little luck those contributions will be dwarfed by earnings, and I would rather pay taxes on the lesser amount. A savings account earning >=1% interest is a negligible tax burden. What you lose from inflation is far greater than what you pay in taxes. Even so, saying it's "the absolute worst place" to put money is beyond hyperbolic.

You don't seem to get the other half of the advice - earn more money. Get better at making money. If you spend a lifetime to save $100,000, you won't be a millionaire.

pjc50 10y ago

"Earn more money" seems like the most tautologous kind of financial advice.

massysett 10y ago

The advice in earning money is good. The advice on where to park it is absolutely awful. Learn from Trump and Romney here: you must get the taxes under control. If you put 100k into a bank account, it will earn nothing and taxes will eat you alive. The point of a 401k is that it is tax advantaged and the money is there when you get old, when you need it. I can understand piling money in a bank if there is something you plan to do with it. But piling 100k in a bank when your only plan is "so NOW I am ready to do something with it" is some of the dumbest financial advice I have ever seen. Even if this guy is good at making money, he must be even better at spending it, and the tax man is going to be his biggest payee.

zaccus 10y ago
>If you put 100k into a bank account, it will earn nothing and taxes will eat you alive. Huh? Assuming this is all after-tax money and isn't earning anything, what would you be paying taxes on exactly?
- massysett 10y ago
  You pay taxes when you earn the money as salary, pay taxes on the interest. With a 401k, you pay no taxes when you earn the money as salary, and the earnings compound tax-free. A bank account is the absolute worst place to park any significant amount of money. The only reason it's better than a mattress is you don't have to worry about the bank catching on fire.
  - zaccus 10y ago
    You pay taxes when you withdraw from a 401k, and the IRS has minimum distribution requirements that ensure you will pay taxes on all that money at some point. Personally I think a Roth IRA is the better deal from a tax standpoint -- pay taxes on contributions and then you're done. With a long enough time horizon and a little luck those contributions will be dwarfed by earnings, and I would rather pay taxes on the lesser amount. A savings account earning >=1% interest is a negligible tax burden. What you lose from inflation is far greater than what you pay in taxes. Even so, saying it's "the absolute worst place" to put money is beyond hyperbolic.