Posted: 10/24/2016 10:59:58 AM EDT
[#10]
Quote History Quoted:
So a person that has been financially irresponsible in the past, has $50k in credit card debts at 15-22% interest, but has started down the path to financial freedom, is financially capable of upping 401k contributions, or can decrease contributions, should never decrease, always increase, even if it means holding onto the bad debt longer?
Mmmmmk.... and this is why the B&I forum has been on a gentle down-slide... people that may or may not actually know what they are talking about giving black and white advice when the real world isn't black and white, it's gray...
One size does not, in fact, fit all... the best advice for one person may be the worst for another... I try to keep that in mind in all my posts here because everybody has different priorities, different situations, and different goals. While I'm sure our personal philosophy is much closer than you may think, I wholeheartedly disagree with what you said.
Case in point; a few years ago I had unusually high income. I needed to reduce my tax liability to still be able to hit some financial thresholds for tax-credits etc, at the same time I was putting money away for a down-payment for our dream house/land. Because I can take a 401k loan, I decided that I can kill 2 birds with one stone, take money that otherwise would have gone into normal investments, and park it in my 401k with the actual intention to borrow from it one day if needed. I contributed the max that year, and worked out beautifully, but had I followed your advice I NEVER would have decreased my contributions back down from the max, possibly putting my family in financial jeopardy if we ever had a need for the added income stream... The plan worked out great; had I taken the money as taxable income I would have ~65% of the money in-hand, and I would have missed out on ~$3000 in tax credits/deductions; but because I contributed to my 401k with the intent to re-borrow that money, I had an extra ~$7k for me to utilize as a down-payment on my house; and I used it too, and despite what many will say, it was a wise financial decision for me and my situation (and I'm not just a nobody in making financially sound decisions, nearly had my 1st mortgage paid off before I hit 30)... View Quote View All Quotes View All Quotes Quote History Quoted:
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Currently putting in 10%, and thinking of going to 15%.
Tired of making .0002% on my so called "high yield" savings account.
On the other hand it's always the wrong time to decrease.
Care to explain this?
Looking at it from a passive investment standpoint, time in the market is key.
See article - http://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/
I'm not a financial genius, but I know enough to know that I am not intelligent enough to beat/time the market on a continual basis.
I should specify: never the wrong time if you are financially capable, and your 401K has good options.
So a person that has been financially irresponsible in the past, has $50k in credit card debts at 15-22% interest, but has started down the path to financial freedom, is financially capable of upping 401k contributions, or can decrease contributions, should never decrease, always increase, even if it means holding onto the bad debt longer?
Mmmmmk.... and this is why the B&I forum has been on a gentle down-slide... people that may or may not actually know what they are talking about giving black and white advice when the real world isn't black and white, it's gray...
One size does not, in fact, fit all... the best advice for one person may be the worst for another... I try to keep that in mind in all my posts here because everybody has different priorities, different situations, and different goals. While I'm sure our personal philosophy is much closer than you may think, I wholeheartedly disagree with what you said.
Case in point; a few years ago I had unusually high income. I needed to reduce my tax liability to still be able to hit some financial thresholds for tax-credits etc, at the same time I was putting money away for a down-payment for our dream house/land. Because I can take a 401k loan, I decided that I can kill 2 birds with one stone, take money that otherwise would have gone into normal investments, and park it in my 401k with the actual intention to borrow from it one day if needed. I contributed the max that year, and worked out beautifully, but had I followed your advice I NEVER would have decreased my contributions back down from the max, possibly putting my family in financial jeopardy if we ever had a need for the added income stream... The plan worked out great; had I taken the money as taxable income I would have ~65% of the money in-hand, and I would have missed out on ~$3000 in tax credits/deductions; but because I contributed to my 401k with the intent to re-borrow that money, I had an extra ~$7k for me to utilize as a down-payment on my house; and I used it too, and despite what many will say, it was a wise financial decision for me and my situation (and I'm not just a nobody in making financially sound decisions, nearly had my 1st mortgage paid off before I hit 30)...
See bolded above. Was a general statement given the lack of detail by OP. Also insinuated by OP that his money was in a savings account, meaning he had the money to invest (assuming this was any amount above emergency fund).
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