The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/paul-wrote-i-think-its-easiest-for-those-like-30656785.aspx

Subject:  Re: Retire at 30 Date:  4/27/2013  5:58 PM
Author:  TwoCybers Number:  72109 of 76395

Paul Wrote I think its easiest for those like Julia Roberts who make $12MM per picture.

Well it would be much harder than you think for people like Julia Roberts to follow your 1/3, 1/3 and 1/3 rule. For starters taxes on the last $11 million are well beyond 33%. Taxes could be 45% of total income in some locations. Most such people have agents who take between 5% and 10%.

But back to normal people - my approach was very simple when I was working. Every time I got an increase in pay, I saved half the take home portion - used the rest for spending. I even applied that when social security payments ending during a work year. Over time I did take the funds I had saved and made investments.

There is one unintended consequence of this approach - one slowly gets into a position of living below your means without feeling like a deprived individual. Of course this approach works best when one is in a mildly inflationary period, so take home pay increases.

Gordon
Atlanta
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us