Those who fail to plan, plan to fail
T: How much from your take home pay are you putting to savings/ 401k other investments? I feel like I can be making 60-90k and really get a jump start on my 401k.
M: Personally, I am putting in only 4% of my pay because Gartner will match you up to 4%. For that reason it'll be a nice thing to fall back on when I need it down the line. However, I am a much more independent investor with all of my holdings. I would rather invest the money into something like crypto currency, real estate, specific stock picks and myself (self development courses, conferences and books). At the end of the day, I have my sights set to retire before 55-60 so whatever is left over once I turn 55 will be a nice bonus. I think they'll increase the age limit by the time we get to be that old anyway haha. ALSO, if you buy Gartner stock since you will be an employee you are entitled to a 5% discount on Gartner stock. Unfortunately, with the current 401K plan you are unable to buy single stock picks. You are required to buy more of an index fund than anything. Yet another reason, I would prefer putting the money elsewhere. But if Gartner wants to match me at 4% I'm not saying no to free money!!! I'm playing the minimalist approach on this one.
T: Yeah, I totally get that! Do you have a % breakdown you are thinking of when you get the full time? Like I know 4% is going to 401k but I think I want to put 20-30% in investments/ saving money. Also would love to hear more about crypto and what that process looks like.
M: Top of mind, I would say 40% towards investments (5% 401K, 15% Crypto, 15% Real Estate, 5% Self Development). Currently, 24% would go to taxes so that leaves 36% for dispensable income. To make life easy, lets say I kill it my first year and make 100K. $36,000 is what I would have to live off of for the year. 36k / 52 = $692 per week. Let's say $200 of that per week gets used for bills (guestimation) leaves me with about $500 a week for whatever I want (Food, entertainment, retail purchases, Car/gas). It's also critical to do two more things. One, put $100 of that weekly $500 into an emergency fund (Min $1,000 & Max $10,000). Secondly, open up about 7 bank accounts and assign each bank account a certain identity/use THEN set up your accounts with direct deposit so that a specified portion of each paycheck goes into each account. Some of that process may require you to send money to one account before it goes to another. I learned this last summer while working OT at my job in Houston. This video maps it out visually for you.
Additionally, here is a link to a presentation I made for my fraternity about personal and financial development, I have not yet added anything about Real Estate or Crypto. I need to Update it.
T: Bet bro! This is exactly what I was looking for. Do you think that 40% is too aggressive or nah? I just know that rent and car/ expenses can add up quick
M: I'm planning on living below my means so that I can compound my money faster. 40% is aggressive but I'm also trying to retire aggressively early. I've worked out a deal with a friend to buy a house when I get down here so we can fix it and flip it so that covers the rent and I'll be driving an old family car for a few months most likely so I won't be paying too much for that.