What do you do with your disposable income?

Hello. Let's say you work and have some disposable income that you can spend. What do you do with it? Do you spend it? Or save it in a savings account? Or do you invest it in things like the stock market, or through mutual funds?

Right now all of my life savings are tied up in these three mutual funds. However, I am really scared that my funds will get merged with some other funds and I will end up losing money. So right now I am thinking about buying the stock shares of all the major banks of Canada (I live in Canada), which I think are blue-chip and therefore very safe.

But I wonder what other people do with their money. Maybe you guys invest it/save it in more clever ways. Thanks.

Please go buy a book on diversification of your assets.

You neet to spread it out: CD's, REits, precious metals, Mutal funds, Swiss Annuities, even land, the works.

Never put all your eggs in one basket.

wan said:

Hello. Let's say you work and have some disposable income that you can spend. What do you do with it? Do you spend it? Or save it in a savings account? Or do you invest it in things like the stock market, or through mutual funds?

Right now all of my life savings are tied up in these three mutual funds. However, I am really scared that my funds will get merged with some other funds and I will end up losing money. So right now I am thinking about buying the stock shares of all the major banks of Canada (I live in Canada), which I think are blue-chip and therefore very safe.

But I wonder what other people do with their money. Maybe you guys invest it/save it in more clever ways. Thanks.

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I save as much money as possible. In fact, my savings are pretty darn good for a 24 year old with a ****** job. Once a year, I like to use some of my savings an go out on some kind of long journey. Like this year I went to aspen and it was beautiful.

But yea, Saving money is important for rainy days and the like.

Blaze said:

I save as much money as possible. In fact, my savings are pretty darn good for a 24 year old with a ****** job. Once a year, I like to use some of my savings an go out on some kind of long journey. Like this year I went to aspen and it was beautiful.

But yea, Saving money is important for rainy days and the like.

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Its incredibly easy to save money for your retirement now. It will be incredibly difficult when you are 65. I have a friend who never paid any attention to that until he was 60. He new realizes that he can never stop working.

What is really unfortunate is that in the 80's he was the historical consultant on movies like Gettysburg and Glory! and was making $200,000 a year. He blew it all. If he'd put just $100,000 a year away back in the 80's on just CD's he would be living in easy streak now.

I got a job with an untouchable pension, and which forced me to put 11% of my salary BEFORE TAXES into it. I'm doing pretty well now, but then I essentially saved 11% of my gross income for more than 35 years.

Compound interest will really work for you when you are 24 and have 41 years to compound it.

What is the significance of "before tax" income?

wan said:

What is the significance of "before tax" income?

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If you make 100,000 a year in the USA, you don't have 100,000 to use, you first have to pay about 20% of it in taxes. This means that you really make about 80K.

If you take 10% of 80K that is $8,000 that you have put into your savings. And that means that you really have only $72K for expenses of your life.

However, if you take the 10% out of the gross before taxes, then you are saving $10,000. When you take the $10K away from your net after taxes, you only have $70,000 to pay for your expenses.

BTW, these are easy round numbers. I never made even close to $100K in a year in 40 years of working.

Zarathu said:

If you make 100,000 a year in the USA, you don't have 100,000 to use, you first have to pay about 20% of it in taxes. This means that you really make about 80K.

If you take 10% of 80K that is $8,000 that you have put into your savings. And that means that you really have only $72K for expenses of your life.

However, if you take the 10% out of the gross before taxes, then you are saving $10,000. When you take the $10K away from your net after taxes, you only have $70,000 to pay for your expenses.

BTW, these are easy round numbers. I never made even close to $100K in a year in 40 years of working.

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Thanks for explaining. I do have a question. Which is better? Taking 10% from the gross before tax income, or 10% from the income that has already been taxed?

the thing i wanted just was sold for 4.5 mil!

Zarathu said:

If you make 100,000 a year in the USA, you don't have 100,000 to use, you first have to pay about 20% of it in taxes. This means that you really make about 80K.

If you take 10% of 80K that is $8,000 that you have put into your savings. And that means that you really have only $72K for expenses of your life.

However, if you take the 10% out of the gross before taxes, then you are saving $10,000. When you take the $10K away from your net after taxes, you only have $70,000 to pay for your expenses.

BTW, these are easy round numbers. I never made even close to $100K in a year in 40 years of working.

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Thanks for taking the time to elaborate on this! Very informative!