Author Topic: What to do after maxing out 401k & IRA? Shopping spree!  (Read 3192 times)

Eric

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What to do after maxing out 401k & IRA? Shopping spree!
« on: July 25, 2013, 01:37:40 PM »
This is the from the woman that interviewed and did the video with MMM that came out yesterday.

Quote
Q: What do you do with your money if you have savings and you've already maxed out 401(k) & IRA contributions?

A: ...If you feel financially secure, a nice splurge seems to be in order! Whether a vacation or shopping spree...

http://finance.yahoo.com/news/ask-farnoosh--what-do-you-do-after-maxing-out-your-401-k--and-ira--170043322.html


A fucking shopping spree?  That's financial advice?  I guess that visit and interview with MMM didn't really rub off on this lady much.


Lans Holman

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Re: What to do after maxing out 401k & IRA? Shopping spree!
« Reply #1 on: July 25, 2013, 03:44:31 PM »
This advice brought to you by:  Bank of America credit cards

What do you expect?

superhero

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Re: What to do after maxing out 401k & IRA? Shopping spree!
« Reply #2 on: July 25, 2013, 04:53:37 PM »
Haha, thanks for the laugh. Some people don't get the whole "more/nice things don't equate to happiness" part.

Riceman

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Re: What to do after maxing out 401k & IRA? Shopping spree!
« Reply #3 on: July 26, 2013, 09:39:35 AM »
This is taken way out of context.  First she advises looking into term-life or disability insurance, two great ideas.  Then here is the whole quote on shopping spree:

If you feel financially secure, a nice splurge seems to be in order! Whether a vacation or shopping spree, Mary Deshong-Kinkelaar a certified financial planner with Kinkelaar & Associates. finds it helpful to have a designated splurge “fund” once you have your financial bases covered.  “It can help establish boundaries for people who feel uncomfortable with the concept of spending,” she says. For this she recommends allocating anywhere from 2% to 5% of your paycheck to the fund.


And she concludes by saying to make sure you pay off your balance.

So the advice here is if you've maxed your retirement funds, set an allowance for yourself on discretionary spending to make sure you feel comfortable and having boundaries.  That is perfectly fine advice, and is the kind of advice that is given repeatedly in this forum.


Eric

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Re: What to do after maxing out 401k & IRA? Shopping spree!
« Reply #4 on: July 26, 2013, 10:51:14 AM »
I thought the insurance advice was terrible too, but I ignored that for the more terrible statement.

http://www.mrmoneymustache.com/2011/06/02/insurance-a-tax-on-people-who-are-bad-at-math/

But the question wasn't how to spend more money.  It was what to do with extra money.  Why is a financial advice columnist advising people to advocate 5% of their income to a spending fund?  That 5% could be a huge amount of money.  How about investing it?  That was the first thing I expected to read, yet that can't be found anywhere.

Riceman

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Re: What to do after maxing out 401k & IRA? Shopping spree!
« Reply #5 on: July 26, 2013, 03:53:05 PM »
I thought the insurance advice was terrible too, but I ignored that for the more terrible statement.

http://www.mrmoneymustache.com/2011/06/02/insurance-a-tax-on-people-who-are-bad-at-math/

But the question wasn't how to spend more money.  It was what to do with extra money.  Why is a financial advice columnist advising people to advocate 5% of their income to a spending fund?  That 5% could be a huge amount of money.  How about investing it?  That was the first thing I expected to read, yet that can't be found anywhere.

The three types of insurance she quoted are the three good kinds because they cover real catastrophes--disability, long-term care, and term-life.  The yahoo writer even made the correct the correct qualifiers--that you should consider them based on your own circumstances, and that term-life can be important if you have dependents.  Not that MMM's writing is the Gospel, but it doesn't contradict this either.  He is already retired and has funds that could support his family, so clearly he has less need for disability or term-life insurance.  If you're just beginning to build a nest-egg and have dependents, these can be worth buying.

I don't have any of them for what's it worth...

AlmostIndependent

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Re: What to do after maxing out 401k & IRA? Shopping spree!
« Reply #6 on: July 27, 2013, 03:19:04 PM »
What to do after shopping spree? Swing by my place for a face-punching spree (don't worry; I don't charge much :)