Best Financial Strategies By Income: $50k, $75k, $100k+ #Finance

we talk a lot on my Channel about preparing for retirement and taking full advantage of the Youth of her senior years but how do we actually get there how do we build our Nest EG so when it’s our turn we have the Assets we need to fund our retirement and in

today’s CashNews.co I’m going to share with you strategies that you need to know based on your annual Income level how much are you making and what strategies should you be deploying now to make sure you’re in as good of a sit situation is possible to retire so

we’re going to talk about three different annual Income levels we’re going to talk about $50,000 a year $75,000 and $100,000 and I chose those because the median household Income in the United States according to the US Census is $75,000 a year and Pew

research defines the middle class as 2/3 to two times the median household Income so that would be $50,000 to $150,000 but let’s start with $50,000 and we’ll end with $100,000 a year the types of things that you should do so let’s start with $50,000 a year and the

reality is if you’re making $50,000 a year your after tax take-home pay is probably $440,000 a year and so it doesn’t give you a lot of wiggle room with today ra uh rent cost mortgage cost you don’t have a lot of wiggle room U for for XR so we need to be sure that we’re

doing things right and we want to be building our foundation so the first thing is do not get caught up in in high interest Debt really for most of us that’s going to be um Credit card Debt or buy now pay later which is becoming very very

popular but un fortunately can get pretty expensive pretty quickly so the first thing is just living within your means and not getting caught up into well I can Finance it so I can afford it

today really think about what are the things that are going to bring you Joy in your life and focus on that I also want you to be prepared for emergencies and that’s why an emergency fund is so important and for most of us we want to have at least one month of living EXP expenses in an

emergency fund at a local bank that’s unfortunately probably not earning much but at least it’s there if we have an emergency so we don’t have to put it on our Credit card 2third of Americans say that they could not pay ,000 unexpected Bill like a car breaking

down or unexpected medical bill they couldn’t pay that out of their current Savings and I don’t want that to be you because for many people that’s how you start on this cycle of of of Credit card Debt High interest

Debt which boy paying 20 25% in interest or more um when your when your take-home pays $4,000 a month that can be an extra $100 or more in interest and I I want you to have that $100 a month I don’t want the Credit card companies to have that so first thing

is is to have an emergency fund the next thing I would I would suggest doing is investing in yourself what can you do to skill up in order to make more money at at uh $50,000 a year that’s about $25 an hour assuming that that you’re working 2,000 hours a year so what could you do to

take that $25 an hour and start being making $30 an hour $35 an hour and and think about certifications I’m not talking necessarily about going back to school and investing a lot of time and money um and Skilling up that way I’m not talking about a four-year commitment on time I’m

talking about certifications or different skill sets uh that you could do either for your full-time job or potentially for a side hustle a little less than half of Americans report having a side hustle and the average side hustle is making people an extra $10,000 a year um which is an if

you’re making $50,000 a year is an extra 20% so investing in yourself is the first thing the next thing I want you thinking about is if your company offers a 401k think about up and the company match often times companies for the first 2% you put into a 401k maybe 5% maybe even more

they’ll match that money and that is a 100% return that’s guaranteed and there’s there’s no other place that I know that you can get that kind of return now admittedly many companies have a vesting schedule you don’t get access to the company’s money until

you’ve been at the company for two three four maybe even five years or more so know what the vesting schedule is if you know you’re going to be leaving in two years then that’s less important and if if putting money into your company’s 401K isn’t a match because you

know you’re going to be leaving before it v um then probably an IRA and depending on your tax rate a lot of people would say put it into a Roth IRA but if you’re in a low tax bracket if you’re paying 10 or 12% federal Income tax it might make sense for you to look

at putting your money into um um paying that WTH at the low tax rate and and hopefully down the road as that grows hopefully later in life you’re at a higher tax bracket so you’re paying the tax now yes but hopefully you benefit from that down the road okay so that’s $50,000 now

what about $75,000 which is the median household Income and at that level uh the average person after Taxes is bringing home about $55,000 a year and many of the strategies for somebody making $50,000 is going to be similar for somebody making $75,000 and that is

job number one is to avoid High interest Debt if you do have high interest Debt in both the 50,000 uh in both the 50,000 and the 75,000 category paying off that highin Debt is important and um there’s two strategies made famous by Dave Ramsey

uh he calls it The Snowball Effect and and uh the Avalanche effect and and one is paying off your smallest Credit card balances first and Dave Ramsey would argue that that that feels good paying down that Credit card Debt and that feeling good is

is a positive and is going to encourage you to pay off more Debt and I think there’s a lot of Truth to that but I also think there’s there’s a lot to be said for paying off the most expensive Debt so if most of your Debt is uh at

25 or 30% uh and you have a small uh Credit card Debt that’s at 10% I’d be tempted to pay off the 20 25% first Dave Ramsey would argue with me on this but either way start paying off that high interest Debt uh because again you can

easily be paying A1 to $300 a month in interest and I want you to have that money not the Credit card company again another thing to do at this is is continuing to skill up are there things that you could do to make more money at work um are there certifications are there courses

maybe your company would pay for these are there new opportunities that that you could get at work um by volunteering to to do some training um by taking on new responsibilities um and also a side hustle is there something you could be doing to make an extra five 10 $15,000 or more a year so I I

think those are really important I also think in both these categories it’s really important to start the process of saving you know I think we need to do what we need to do to save 10% and actually get to 20% as soon as we can and I know that’s hard to do saving 20% is really difficult

particularly when you’re making what the median household Income is in the United States $75,000 there’s there’s not a lot of room left over but what I would encourage you to do one thing to think about is what I call the 503 20 Ru and that is really looking at

what your needs are and try to keep that at 50% or less of your after tax take-home pay which again if you’re making $75,000 after tax you’re probably bringing home about um 55,000 so try to keep your needs which would be your your rent or or your mortgage your utilities your groceries

not eating out um gas for your car things like that try to keep your needs to 50% or less so that would be about $228,000 a year actually a little bit less than that and then try to keep your wants things like going out to eat things like taking a nicer vacation things like the cardboard boxes that

show up at our front door all the time try to keep those wants to under 30% and if we can do that 50% on our needs 30 30 % on our wants that leaves us 20% left over and you know most of us can do almost anything for 30 days and so if you’re not there now do what you can and try it for 30 days

45 days and see how it feels for many folks cutting out some of the wants is is not as sacrificial as they think it’s going to be and your future self will thank you the closer you can get to saving 20% okay so now what about th those of us who are making $100,000 a year or more what what

should be your financial goals and how do you make sure that when when you want to retire you you have the asset base to make that happen you know it’s going to be a little bit easier for you because at this level you should be able to save some money although surprisingly um over half of all

Americans that make $100,000 a year or more report that they don’t save a dime and I know that often these high-paying jobs happen in towns where it’s more expensive but I really encourage you to fight the lifestyle creep that often can come in as you start making more money you you

start buying a more expensive car you start buying more toys you start spending more money on yourself and you’ve worked hard and I want you to reward yourself but I also want you to to think about your future self and split that lifestyle creep between current self and future self and and

one way to to to get your your Savings increased and up is As you get these promotions as you get raises as you get new opportunities at work that maybe pay more I want you to think about saving half of that for your future self and and but you get to enjoy half of that for your

current self and same thing with the 50320 try that and see if you can do it because boy saving 20% % of your after tax pay can really move the needle very quickly for you and and your future self’s really going to thank you for that and then with all of these categories it’s not enough

to just save we also have to invest but I encourage you it’s a long-term game that we’re playing it’s not about getting rich quickly it’s about getting rich with certainty and and so for many of us we’re much better off seeking the Seven 8 n 10% returns than trying to

find the stock that’s going to double in the next 12 months because any stock that can double in the next 12 months can also have a hiccup and be cut in half uh so I want you to be careful you’ve worked hard for your money I want your money working hard for you as opposed to

disappearing uh overnight so again it’s not enough to just save we have to invest and we we need to be working at at having our money grow at a rate faster than Inflation so compounding is working for us as opposed to against us you know that warm cozy feeling that we get

with the money that’s in our local bank account that’s FDIC insured and there’s a place for that that’s for your emergency money that’s for money that you know you need to access in a year or maybe even two years but for your long-term money money that you know

you’re not going to touch for four five or more years think about how that should be invested with the right asset allocation is for that because for the long term the risk is not necessarily the day-to-day volatility that we see with when the Stock Market goes up and down

the risk is us not achieving our long-term goals if we can save $10,000 a year and get just 7 % on that money then that’s not going to be in the bank account that’s going to be exposed to the Stock Market but if we can do that then we can save our first $100,000 in

under eight years and once we have that first $100,000 then our money starts working harder for us then then we can work for it right that first $100,000 about 80% of that money is going to be the money that you’ve put in and only 20% of that is going to be your money working hard for you but

once you have that first $100,000 then those numbers start to compound very quickly so that’s how to do it by by Income level and speaking of Income level I I think many of us would find it interesting to see what is the average retiree have an

Income in the United States and that’s why I made this CashNews.co here thanks for watching this one and I’ll see you in there bye-bye