Comments on: Guest Opinion: 7 steps to a millionaire mindset

By: Matthew Illian

Matthew Illian — Fri, 05 Mar 2010 17:25:47 +0000

Gordon, I certainly wouldn’t turn down a 6 or 7 figure salary but I’m fishing in the same pond right now. We are writing from the perspective of after-tax income but I understand that the reference to 401(k) savings could be confusing. We recommend that most people use a Roth 401(k) which is after-tax if their employer allows it.

The big picture break down is:

15% Long term savings (10% Retirement and 5% taxable)
10% Charitable Giving
10% Mid term savings
65% Living Expense

This is not easy and the first thing to go is the mid-term savings which is why we are often forced to go into debt to replace cars and heat pumps, etc.

By: Gordon Paterson

Gordon Paterson — Wed, 24 Feb 2010 19:59:40 +0000

Let’s see now:
5% to 401k
5% to IRA
5% to taxable account
10% to charity
10% to taxable account for “periodic expenses”
30% to the IRS (maybe more)

and now I get to “live” on the remaining 35% ?
I don’t know anyone with a mere 5-figure income who could do it.
Maybe you 6- and 7-figure guys can, but not us.

By: Stephen Jenkins

Stephen Jenkins — Fri, 22 Jan 2010 23:38:22 +0000

Matt
Thanks for the sound advise very well written

By: Matthew Illian

Matthew Illian — Fri, 22 Jan 2010 21:28:22 +0000

Susie, first I want to commend you for taking your financial planning seriously. We have an article that will help you understand how to calculate your net worth viewable online at: http://www.emarotta.com/article.php?ID=370.

Roth IRA accounts allow your investments to grow tax deferred and come out tax free. We encourage all of our clients (who are income eligible) to fully fund their Roth accounts because they never have to pay tax on this money again. Tax brackets are currently at historical lows and are expected to increase significantly in the future in order to pay off the mountain of debt our nation has built up. In light of these realities, tax free growth is very attractive.

You can find out more about a Roth by reading the article, “Remember to Fund Your Roth IRA” at: http://www.emarotta.com/article.php?ID=274.

By: Susie Cummings

Susie Cummings — Fri, 22 Jan 2010 20:07:55 +0000

Great article. Very practical. I’ve done 1, 3, and 5. I guess that makes me odd! I’m working on #2 for this year. I’ve never done a net worth statements. I looked at #2. I’ve never understood Roth accounts. What does it take to have one and why would I want one? I don’t think my work has anything like that. Maybe I will save figuring that one out for next year.

By: Bob Arms

Bob Arms — Fri, 22 Jan 2010 16:43:25 +0000

Excellent article and very helpful.

Thanks!