Comments on: Ask Todd

By: Todd Tresidder

Todd Tresidder — Fri, 27 Jan 2012 22:30:15 +0000

@Grease – It is net of taxes – spendable income or actual expenses. The calculator adds the taxes and adjusts for inflation to figure out true need. If you aren’t clear just look at the table provided and you can see the columns and how the numbers flow.

Hope that clarifies, and thanks for asking. I will add that to the instructions…

By: grease

grease — Fri, 27 Jan 2012 13:06:15 +0000

Hey Todd. I just ran across your “Ultimate Retirement Calculator” and have a question. In the ‘desired annual retirement incomet’ field, is this net of taxes or is this gross before taxes. In other words, are your calculations grossing up this income to account for the tax % entered or do I have to do that?

Thanks,

Dennis

Mooresville, NC

By: Financialmentor

Financialmentor — Wed, 18 Jan 2012 22:05:45 +0000

@jlmurf If I were in your situation I wouldn’t have any problem with spending 5K per month. Assuming your investments do nothing (don’t win or lose – easily achieved with T-Bills or comparable) that would 60K per year. When you figure in a basic investment return the risk of running out is very small. The key is to make sure you don’t lose significant principle along the way. Stated another way, you claim a 5% yield which almost equals your proposed spending in perpetuity. Again, as long as you don’t lose significantly to earn that return it should be a relatively sound spending pattern. What distinguishes your situation from my writing on safe withdrawal rates is your age. At 82 you can spend some principle (unless you’ve discovered a magic potion for eternal youth).

Hope that helps…

By: jlmurf

jlmurf — Wed, 18 Jan 2012 04:00:31 +0000

I just turned 82 years old and have about $1,008,000 in an IRA. I expect (hope) to live another 18 years.

I would like to withdraw about $5,000 a month. Question: will I run out of IRA money before my demise?

If so, when and, if so, how much should I be drawing out each month. My current portfolio is yielding about 5%.

By: Todd Tresidder

Todd Tresidder — Mon, 14 Nov 2011 21:16:39 +0000

@Penny – Thanks for the acknowledgement on this site. The reality is I have more work here than I can handle. You could offer up a guest post or two to try and bring a unique perspective or voice here. If people resonate and the writing is high enough quality you never know what can happen. The point being, if you are truly committed then just dig in and get started somewhere. Hope that helps…

By: Penny

Penny — Mon, 14 Nov 2011 17:32:18 +0000

I would like to know how I can get a job in this field. I did financial advising but felt like it did not connect well with the client sometimes because you were always being pressured to sell more than educate or help your client.

I do have a fairly strong financial background. I had my LLQP, secrities license, 2 courses towards my CIFP and 2 year Accounting diploma as well. My passion is to teach and help people with their finances, not just selling but helping them with their credit problems as well.

Please let me know what path I can take to do this type of work. I feel this would keep me motivated and feel like I have accomplished something in life as well.

Regards

Penny

P.S. I think this website is phenomenal and thank you.

By: Todd Tresidder

Todd Tresidder — Thu, 27 Oct 2011 04:52:54 +0000

@Joe – This would require a lengthy and thorough analysis to properly explain. Given that it doesn’t exist anywhere on my site that should probably tell you something. If you want to learn more about this there are plenty of sites on the web that will teach you all about it. Just be careful… they all have something to sell you besides education!

By: Todd Tresidder

Todd Tresidder — Thu, 27 Oct 2011 04:19:43 +0000

@Lin – Unfortunately there are no simple answers… and you should be extremely wary of anyone claiming they have simple answers because they probably have something to sell you. There are only so many hours in a day and yours will be taken up by caring for your family and your existing work earning enough to take care of their needs. There isn’t much time or money left to build wealth. That points to two key areas to focus on. The first is obvious – you must create a spread between what you spend and what you earn to funnel income into the asset column. (I know I’m not telling you anything you don’t already know there.) The second is less obvious – leverage. Your limiting factor is time therefore you must become a master of leverage to overcome your primary limitation. Hope that at least helps point you toward the right way given the limitations of a blog comment. Best of luck to you, and I hope to see you in the 7 Steps program when it launches for more in depth support. Thanks.

By: Lin

Lin — Thu, 27 Oct 2011 01:58:36 +0000

Hi Todd, I’m glad I stumbled on to your site – I am learning so much, thank you for all the free advice. For someone completely ignorant of finances, this was a great find for me.

I’m newly divorced, 2 kids in elementary school, steady job at a public school with full benefits, car paid off, no debt except for a 24K student loan. I automatically put away 20% of my monthly income — but have been using it for car repair, glasses, etc. otherwise, I’m quite frugal. I looked into getting my student loan forgiven since I work at a public school, but they said that was only for teachers. I also write on the side — have a couple scripts on option, but all on deferred payment. I’m considering starting my own short film production company next year, but not sure if that’s a wise move. I’ve had short stories published in the past many years before, but not a lot of money in that for what I put in.

Where does a single mom like me even begin?
(P.S. I am looking forward to your 7 Steps next year!)

By: Joe Stanfield

Joe Stanfield — Tue, 25 Oct 2011 16:10:34 +0000

Hey Todd
Are you familiar with the term arbitrage? My understanding is borrowing at a lower rate investing at a higher rate and collecting the spread. Your thoughts? I recently ask a question about the I.U.L opportunity -essentially investing i.e. 25k into it ,adding 2k per month, after year 1 -taking a loan from yourself and investing at a higher rate, while your 25k is growing on a snapshot of the S&P, at the time you put the 25k in and a year later receiving the difference of growth btn that time period, i.e. 10-13%, if its zero you are guaranteed 2% by the life insurance. The idea becoming your own bank. At year ten your invested money is dollar for dollar and would be in the neighborhood of 200k. Obviously if you put more in at the beginning it would be a greater amount. No taxes when you borrow out of it and your only paying 4% on what you borrow and hopefully investing at 10% or greater. If the S&P paid you 6% and you got 10% from your other investments your looking at 16%. Your thoughts?

thanks Joe