- How To Money
- Posts
- Maxing 401ks, Ditching Insurance, & Tiny Triumphs 💪
Maxing 401ks, Ditching Insurance, & Tiny Triumphs 💪
Happy Tuesday HTM Family! Losing momentum? Feel like giving up?...
Happy Tuesday HTM Family!
Losing momentum? Feel like giving up?…
Here’s how to get back on track:
Set a small goal (one that requires little to no effort to achieve)
Smash that goal 👊
Set another small goal, about 10% harder than the last.
Smash that goal too 👊👊
Build on these goals, slowly. 1 per day is enough.
Get to 10 days in a row, then 20. 🔁
Soon you will be back on track, motivated, and kicking more butt than you ever thought.
Remember, winners never quit, and quitters never win. Just keep going! Focus on quick, small wins. Rinse and repeat.
Alrighty, now let’s chat about money stuff! 👇👇👇
TO DO
Send Us a Voice Memo 🙋♀️…
If you have an interesting money question you'd like us to answer on the podcast, we'd love to hear from you!
Relational money hang-up? Frugal vs. cheap conundrum? Maybe your BFF’s neighbor loaned money to your ex a few years ago and now they’re trying to steal your car rims for compensation? The weirder the better! (OK, not too weird… We ain’t Ricki Lake)
But seriously, send us your question. Just record a short voice memo (say your name and where you live at the beginning!) on your phone and email it over to us: [email protected].
🧦🧦 And if we take your question on the pod before the end of 2024 we'll send you a pair of the finest HTM socks pictured above (Photo credit: Judah Wasson 🙏). 🧦🧦
SAVING
Maxed out your 401k? What Next? 🤷♂️
One of the most common questions in personal finance is “what should i do next with my money?”
After filling up the no-brainer tax-advantaged accounts like your 401k and Roth IRA, what’s the next best money move if you have more to save?
Honestly, no one would blame you if you stopped at that point. Seriously, just maxing out your 401k for the next 30 years could build you a nest egg of $2.6M assuming an 8% average return.
In that same 30 years, you’ll also become a Roth IRA millionaire…
But if you want to go even further, here are some thoughts:
First, don’t skip over the basics! Go back and double-check you’ve got a solid foundation.
Fully fund your E-fund with 3-6 months of living expenses.
Pay off high interest debt (credit cards, car loans, etc)
Build sinking funds for short and medium term expenses
Continue saving/investing: To invest more, here are the accounts and options to hit next after your 401k and Roth are maxed out…
Max out your HSA (if you have one)
Invest in an after-tax brokerage account
Consider real estate investing
Invest in yourself! (school, or start a biz)
Other Lifestyle Goals: If you’re pretty far ahead financially, you can afford to take your foot off the gas and prioritize other goals with your money…
Pay off low interest debt (mortgage, student loans)
Start helping your kids (529s, UTMAs)
Donate more money or splurge on your friends
Spend and enjoy more luxuries (within reason)
Buy your time back (always a winning choice)
If you’re new to all this money stuff or want more perspective on what to do next with your money, check out our 7 Money Gears.
Related stuff:
🧑💻 Full Blog: Maxed out your 401k and Roth? What next?
📊 Savings Rate: How much of my paycheck should I be investing?
🔥 FIRE: How to Retire Early
TOGETHER WITH BETTERMENT*
Start earning today
Turn out the lights on traditional savings accounts. With Betterment’s high-yield cash account, your money is earning 11x the national average**. Get started
INSURANCE
6.1 Million Uninsured Homeowners 🤯
Want to hear something crazy?…
According to the latest Consumer Fed report, 7.4% of Americans who own homes (one in every thirteen homeowners) has no home insurance! This is equivalent to 6.1 million homeowners with no safety net.
Here’s a chart from Axios showing some of the major metros and their percentage of uninsured folks (latest data is from 2021) 👇👇👇
The report also found that most folks who forgo home insurance have lower valued properties (under $150k), have no mortgage, and are mostly lower-income households.
Ironically, these are likely the people who need insurance the most. 🤦♂️
Given the uptick in premiums the past few years, ditching your home policy might be tempting… But, it’s super risky — especially if you live in a place vulnerable to climate related disasters - which we’ve clearly seen more of recently.
Sure, you might save $1,000 or so annually. But, do you have a spare $250k for a full rebuild or massive repair if 💩 hits the fan?
If not, you gotta suck it up and stay insured.
Related stuff:
ICYMI
In other news…
Free Pizza 🍕
In a middle school throwback, Pizza Hut is giving away 1 million free pizzas in October for National Book Month. Just use the code “BOOKIT40” at checkout online or on the app to redeem their free Personal Pan Pizza offer (with an $8 minimum purchase of other stuff) from October 1 to October 30.
Veblen Goods ⌚️
A great read from Wired magazine: The More This Rolex Costs, the More You Want It. Here's Why. It’s fascinating (and sickening) how luxury brands can inflate their prices 10x the rate of regular inflation, and people will STILL buy their stuff!
Roth vs. traditional 🤷♀️
Michael Kitces breaks down the nitty gritty math comparing traditional and Roth retirement accounts for tax savings. Which is best for you? Well… it depends on your specific situation, but we often recommend a blend of both for ultimate flexibility.
Small Biz 💥
The Covid spike in small biz formation continues, and many of the companies formed during the Covid-induced economic downturn have been crushing it! If you are a solopreneur or want to be one, go back and listen to Ep# 884 with Laura Adams!
Health Insurance 👨💻
As healthcare costs rise, employers are looking at alternative ways of offering benefits. One option is dropping health insurance altogether, and instead providing employees with a pay raise so they can buy their own health insurance plan. Could be good or bad, depending on the payment amount.
ASK HTM
“Should I buy the house I rent from my landlord?” 🏡
This question came from a long time listener, Ethan.
The short answer is: As a renter, you know the house/street/neighborhood better than anyone and can probably negotiate a deal because you can potentially save your landlord on selling fees and headaches.
There’s no harm in asking the question and having a serious discussion with your landlord.
That being said, just because you might get a deal, it doesn’t mean it’s the smartest financial option. Never skip due diligence and don’t fall for emotional bias because you are attached to the place!
Cheers to a great week ahead. Remember to set that tiny goal —> then SMASH IT! 💪
Best friends out 🍻