Why The Money Guy Show Recommends You Invest 25% of Your Income

Why The Money Guy Show Recommends You Invest 25% of Your Income

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[Sherrillo]

Started at about age 35, saving 25% now. Thanks for all y’all do!!!

[LAZERZ-OP]

A lot to unpack when you think of things overall. I'm currently 24 (about to be 25) and am paying off my student loans which should be paid off around December. After that, I plan on investing 25% into my works ROTH 401k and saving the rest of what I make for an emergency fund and down payment for a modest house. It makes things a lot easier when I live at home with my parents and am able to save a ton of money. For that I am very grateful for them and the education that you all share with us. To those of us that listen to this advice, we all have an opportunity to be a financial mutant. Let's get it!

[gojl]

My first job, they told us to put 4% into our 401k and then with their match it would get us to 6% and that would replace 75% of our income. They didn’t qualify that by age. I listened to my father who suggested 10-15% and increase it each year until I maxed out. I know the Money Guys would have recommended I max out the Roth first, but still it’s better than the recommendation of 6%.

[BitsOfInterest]

About that free deliverable, instead of (or in addition to) "age" you should add a column for "years to retirement". As Bo said, not everyone is planning to retire at the same age, so it's quicker to see where you are. I'm 39 but I have to look at the numbers for age 51 if I want to retire at age 55 instead of 67.

[ronrogers]

My wife and I totally agree that we need to only depend on ourselves. If SS is available a great bonus for us.

[zoraster]

Best thing about saving/investing more is you’re spending less. If you’re investing 25% you only need to replace at most 75% of your income. If you’re investing 10% you may need to replace up to 90% of your income.

Easiest way to build your savings rate is to layer it in over time. Every time you get a raise put at least half of the increase into investing.

[myfinancialclimb]

I wish that I had saved more, earlier. But in my 20s, I just had too much debt. Student loans and a car payment, and my level of income didn't allow for me to have much left over to put away. So, I didn't get started until the age of 27, but even then, it wasn't much. Maybe 6%. However, now that I'm in my early 30s, I'm hypercharged and throwing everything at it. I was around 55% earlier this year and I'm hoping to improve upon that, to get to the place I want to be.

[TartarianTopG]

“We don’t want to be in the curve, we want you to be ahead of it.” Yesss

[Omikoshi]

I could only save about 10% for the first 10 years of my career when I made 5 figures, then 20% for the next 5 years when I made low six figures. Now I've been saving about 68% for the past 5 years. It took 15 years to save my first million and 2 years to double that.

[Aaronsutube]

Taking the advice of your show, my wife and I have been putting away 20-25% since February of this year, an increase from the 15% we have always done.

We’ve had to pinch and save to allow for it, but if we continued on this path, retirement around 55 (25 years from now) would mathematically work.

While we don’t know if we can continue doing this as we have kids, we do appreciate starting our financial life together with a bang.

Thank you for your challenging influence, you raised the bar for us and put us in a better forecast.

[funguy]

Started my 401k in 2005. Opened a brokerage account in 2014. Started a roth ira in 2020. Feels good to watch it grow as I continue contributing. It gives me a certain level of mental freedom knowing I have options.

[Project]

Just heard of the wealthy barber from last episode and just finished it, good points easy read!

[The.Dude.Abides.]

To be fair to Ramsey he states YOU need to contribute 15% outside of any employer match in which case you will get close to the 20%-25%. I myself do 15% of my actual pay and then my employer contributes another 9% plus I have the option each year for my annual bonus to pay into my 401k so there are ways to get there.

[Petra]

2:40 I mistook you saying life for wife, and along with your hand gestures, my mind immediately went to the gutter 😂

[TommyHarkin]

How do you calculate 25%? Is it out of gross income, after-tax, or after-tax-savings (i.e. removing HSA and 401k contributions from income)? Is it retirement only or do mid-term savings (e.g. for down payment on house) count towards the 25%?

[chiparooo]

Looking forward to that deliverable. Great info. Thanks for sharing!

[ericcortez]

Started small with my first job, 3% match 100% invested. 2nd job, 6% match 100% invested. I took every raise and got it up to 15% with 6% match 100% invested. I had to throttle it down for promotions. I am glad I was told at young age to pay yourself first then spend. It looks like I am at 25% savings but it took 18yrs to do it.

[andrewnewbold]

5:02 "That's exactly right" 🤣

[davidpreston]

I have 2 pensions one with the teamsters and one with the operators. Over the years the teamsters put 15% of my hourly into the pension. My current pension with the operators is 25% of my hourly into their pension. I have been maxing out my Roth ira since I was 18 and maxing out my hsa since 2004. Hopefully Ile be set when I retire

[Spladoinkal]

Very wealthy individuals invest 75% or more of their income in order to create wealth! Of course this means getting to a point where you are generating enough income to live comfortably on 25%.