Comments on: Reverse Strategy: Decreasing Contribution Percent http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/ because money doesn't grow on trees Thu, 09 Feb 2012 19:16:13 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Madison http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4968 Madison Thu, 25 Sep 2008 15:13:55 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4968 @ Carmen: The $100k salary for a couple out of school is reasonable, but of course it depends where you went to school, your major, and your location. I would say those salaries are more common in larger cities and with business and IT degrees. Ours were higher than that about 6 & 10 years ago, but we had very marketable degrees. And thanks - I will enjoy the kids. It seems like time has flown by since they were born, I can only imagine how it will just keep speeding up. @ Carmen: The $100k salary for a couple out of school is reasonable, but of course it depends where you went to school, your major, and your location.

I would say those salaries are more common in larger cities and with business and IT degrees. Ours were higher than that about 6 & 10 years ago, but we had very marketable degrees.

And thanks – I will enjoy the kids. It seems like time has flown by since they were born, I can only imagine how it will just keep speeding up.

]]> By: Carmen http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4962 Carmen Thu, 25 Sep 2008 08:46:48 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4962 Hi Madison I have recently found your blog and it's perfect timing since I'm currently devising our how to retire early plans. I agree that whilst this strategy is the best one, it is also due to increasing salary as well as the (massive) effects of compound interest. Salaries increase hugely in the first ten years after leaving college. Also, is $100k a realistic starting salary for a couple with zero experience? It sounds high to me, but then I am mid-30's so no doubt my graduate starting salary of $30k may well be $50k now. But brilliant post and congrats to you. Enjoy your kids - it goes so fast. Mine are now 8 and 7. :) Hi Madison

I have recently found your blog and it’s perfect timing since I’m currently devising our how to retire early plans.

I agree that whilst this strategy is the best one, it is also due to increasing salary as well as the (massive) effects of compound interest. Salaries increase hugely in the first ten years after leaving college. Also, is $100k a realistic starting salary for a couple with zero experience? It sounds high to me, but then I am mid-30′s so no doubt my graduate starting salary of $30k may well be $50k now.

But brilliant post and congrats to you. Enjoy your kids – it goes so fast. Mine are now 8 and 7. :)

]]> By: Madison http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4643 Madison Tue, 02 Sep 2008 16:04:13 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4643 @ BTGNow: They always say a picture is worth 1,000 words right? @ BTGNow: They always say a picture is worth 1,000 words right?

]]> By: BTGNow.net http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4434 BTGNow.net Tue, 19 Aug 2008 16:57:25 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-4434 I'm so glad you posted this: this is incredible! I always knew starting early was the secret to huge compounding, but I'd never seen it illustrated in terms of percentage of incoem invested over the years. Of course, it makes perfect sense: save more when you have less things to spend it on (house, kids, etc..) Thank you very much! I’m so glad you posted this: this is incredible! I always knew starting early was the secret to huge compounding, but I’d never seen it illustrated in terms of percentage of incoem invested over the years. Of course, it makes perfect sense: save more when you have less things to spend it on (house, kids, etc..) Thank you very much!

]]> By: Madison http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-3426 Madison Tue, 03 Jun 2008 02:24:03 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-3426 @ WealthBoy: You're a walking example of compound interest! Great job! And how nice to be able to take your contributions down but have your portfolio still going up. @ WealthBoy: You’re a walking example of compound interest! Great job! And how nice to be able to take your contributions down but have your portfolio still going up.

]]> By: WealthBoy http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-3419 WealthBoy Mon, 02 Jun 2008 18:39:23 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-3419 I can attest that this is an excellent strategy. As soon as I entered the workforce, I was contributing 15% pretax to my 401k. For the past four or five years, I've only been contributing just enough to take advantage of the company match (5% of salary). In eight years years with my contributions and capital appreciation I've managed to accumulate just over $100k. You really gotta love compound interest. I can attest that this is an excellent strategy. As soon as I entered the workforce, I was contributing 15% pretax to my 401k. For the past four or five years, I’ve only been contributing just enough to take advantage of the company match (5% of salary). In eight years years with my contributions and capital appreciation I’ve managed to accumulate just over $100k. You really gotta love compound interest.

]]> By: Pros vs Joes: What Advice Do Their Professionals Give? | My Family's Money http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-2925 Pros vs Joes: What Advice Do Their Professionals Give? | My Family's Money Sun, 11 May 2008 03:11:37 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-2925 [...] point it becomes a simple matter of discipline and forward thinking. (See My Dollar Plan “Reverse Strategy” for a better understanding of what front loading your retirement investing can do for [...]

[...] point it becomes a simple matter of discipline and forward thinking. (See My Dollar Plan “Reverse Strategy” for a better understanding of what front loading your retirement investing can do for [...]

]]> By: Madison http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-2539 Madison Fri, 18 Apr 2008 02:27:06 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-2539 @Cyan Squirrel: I used 4% raises each year in all three scenarios. I reran the numbers dropping the raises to 0. The percentage increase from the declining to the increasing only changed by 1% in the final year. The declining compared to the static didn't change at all. @Cyan Squirrel: I used 4% raises each year in all three scenarios. I reran the numbers dropping the raises to 0. The percentage increase from the declining to the increasing only changed by 1% in the final year. The declining compared to the static didn’t change at all.

]]> By: CyanSquirrel http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1728 CyanSquirrel Fri, 21 Mar 2008 17:56:46 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1728 Now I have to wonder something: with the decreasing model, you don't mention the fact that your income is increasing as the years pass. To what extent does that account for the massively higher amount saved compared to under the increasing or static plan? Now I have to wonder something: with the decreasing model, you don’t mention the fact that your income is increasing as the years pass. To what extent does that account for the massively higher amount saved compared to under the increasing or static plan?

]]> By: Smart Spending http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1641 Smart Spending Wed, 19 Mar 2008 14:16:47 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1641 <strong>Grow your investments one snowflake at a time...</strong> This guest post comes from Madison DuPaix at My Dollar Plan. Once you establish an investment plan, you can contribute regularly and watch your portfolio grow. What if there were a way to give it an additional boost without much extra effort? That's ...

Grow your investments one snowflake at a time…

This guest post comes from Madison DuPaix at My Dollar Plan. Once you establish an investment plan, you can contribute regularly and watch your portfolio grow. What if there were a way to give it an additional boost without much extra effort? That’s …

]]> By: kentuckyliz http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1380 kentuckyliz Wed, 12 Mar 2008 12:44:21 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1380 In the US, retirement plan contributions are based only on work income. If you can pimp out your kid for baby/child modeling jobs, stick their earnings (to the annual cap.) in a Roth IRA equity investment. However, they will be able to raid it later--that's a danger. Of course, you could keep the account a secret from them until they're retirement age. LOL Another way to do it, regardless of work income, is a RIC-E trust. ("Ricky" trust) -- Stands for Retirement Income for Everyone, a patented product by Ric Edelman. For a trust setup fee of a few hundred dollars, you can set up a locked-up (no raiding) retirement investment account for babies/children and use the power of time to make them rich. Brilliant idea. Patented product invented by Ric Edelman, one of the top independent financial planning firms in the USA. http://www.ricetrust.com/ So if a parent or grandparent is flush with cash, and has it to spare without sacrificing their own lifestyle, set up a RIC-E trust for each child/grandchild as it's born and you have changed the family tree. I don't get any kickbacks for recommending it, I just think it's a great idea and wish I had the means to do it for my nieces and nephews when they were bunchkins. In the US, retirement plan contributions are based only on work income. If you can pimp out your kid for baby/child modeling jobs, stick their earnings (to the annual cap.) in a Roth IRA equity investment. However, they will be able to raid it later–that’s a danger. Of course, you could keep the account a secret from them until they’re retirement age. LOL

Another way to do it, regardless of work income, is a RIC-E trust. (“Ricky” trust) — Stands for Retirement Income for Everyone, a patented product by Ric Edelman. For a trust setup fee of a few hundred dollars, you can set up a locked-up (no raiding) retirement investment account for babies/children and use the power of time to make them rich. Brilliant idea. Patented product invented by Ric Edelman, one of the top independent financial planning firms in the USA.
http://www.ricetrust.com/

So if a parent or grandparent is flush with cash, and has it to spare without sacrificing their own lifestyle, set up a RIC-E trust for each child/grandchild as it’s born and you have changed the family tree.

I don’t get any kickbacks for recommending it, I just think it’s a great idea and wish I had the means to do it for my nieces and nephews when they were bunchkins.

]]> By: bethh http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1376 bethh Tue, 11 Mar 2008 23:40:59 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1376 That's quite interesting. I've been putting in 15% for about ten years, since my late 20s (actually do 16% now to get my full 4% match). I've wondered if I could choose to scale back, especially when the interest earned/reinvested eventually outpaces my contributions! But I'm just going to stay the course of 15% and focus on getting cash in the bank for non-retirement savings. That’s quite interesting. I’ve been putting in 15% for about ten years, since my late 20s (actually do 16% now to get my full 4% match). I’ve wondered if I could choose to scale back, especially when the interest earned/reinvested eventually outpaces my contributions! But I’m just going to stay the course of 15% and focus on getting cash in the bank for non-retirement savings.

]]> By: Carnival of Personal Finance #143 - Oh Canada Edition http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1341 Carnival of Personal Finance #143 - Oh Canada Edition Mon, 10 Mar 2008 02:14:56 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1341 [...] Dollar Plan had a very interesting article on why her retirement contributions are decreasing as a percentage. Turns out, it’s a pretty good [...]

[...] Dollar Plan had a very interesting article on why her retirement contributions are decreasing as a percentage. Turns out, it’s a pretty good [...]

]]> By: Weekly Round Up - A New Member, A Milestone, and Free Stuff! http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1339 Weekly Round Up - A New Member, A Milestone, and Free Stuff! Sun, 09 Mar 2008 22:58:37 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1339 [...] Dollar Plan - Reverse Strategy: Decreasing Contribution Percent. invest more when you are younger, because compound interest will work its magic over time. If you [...]

[...] Dollar Plan – Reverse Strategy: Decreasing Contribution Percent. invest more when you are younger, because compound interest will work its magic over time. If you [...]

]]> By: Prime Time Money: Big Winner Roundup | Prime Time Money http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1322 Prime Time Money: Big Winner Roundup | Prime Time Money Sun, 09 Mar 2008 05:38:52 +0000 http://www.mydollarplan.com/reverse-strategy-decreasing-contribution-percent/#comment-1322 [...] My Dollar Plan shares her reverse contribution percentage strategy. [...]

[...] My Dollar Plan shares her reverse contribution percentage strategy. [...]

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