Quote:
Originally Posted by pilotbob
I found this online:
Although Harry says they will pay more in than you had withheld... I guess I don't understand that math. But, he is the guy that lives here.
In the US you would usually contribute pre-tax $'s. So, the result is basically the same. If you earn $30k and you deposit 10% or $3,000... you will not have any tax withheld on that $3,000 that you deferred.
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Okay that makes a lot more sence than the government just paying in 40%.
If this is how GB handles the pension plan this is quite a brilliant marketing move by the government.
1) They make their citizens feel like they are getting a payment when in fact it was their money all along.
2) <More Importantly> The government gets the money before the citizen, which means they get to put the money to work before the citizen. I don't know how the payouts work but if this is done on a yearly basis that means the citizens contribution was not put to work for a whole year.
I think you and PKFFW captured the
1.
Pay yourself first, 10%. So, it is pretty easy if you have access to a 401k... just elect 10%.
2.
Compound your savings --make your money work for you. Make your money work for you. So many people miss this part. Instead they stick their money into a bank account earning 1% or less with account keeping fees that eat most of that up and then tax on any profit eating up the rest and think they are doing good because they aren't in debt. You really need to learn to make wise investments.
3.
Live within your means: Don't buy stuff you can't afford. All debt is bad. The sorter the term the worst. The less secured the worst. Which means, while a mortgage is probably acceptable buying a TV with your credit card, not such a good idea.
PKFFW[/QUOTE]
Yeah I agree with you both. In fact I belive you guys have listed 3 of the "7 cures to a lean purse". I've added my spin to each one of your points.
One thing I'll add to your #3 bob is that the author is not against debit, but only believes they are a good idea if they will increase your wealth. So in your example a house typically gains 10% a year in value over time a TV set will lost most of it's value over time.
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