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Erik Carter with top 5 financial mistakes to avoid if you want to become wealthier than you are
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Welcome back I'm Lawrence in the nanny to think alike could make even more money I should be I should have this much money in the bank right now my net words should be this month sentence not.
So you're likely making a lot of mistakes along the way and we're here to show you.
Some of those mistakes that Eric Carter joining us from financials and ask -- financial educator nice title.
Thank you so what are some tips -- we'll start with five.
Reasons why Americans are not as rich as we should.
Well thanks Lauren and thanks for having me here.
Well first well to take a step back we think about wealthy we often think that what we have to invent the next apple of -- -- win the lottery to become wealthy.
It turns out that things to do to build real wealth when we see with a lot employees he worked with.
He's very basic things the first thing -- -- I probably heard of the book the millionaire next door says the average millionaire she's got 20% of their income in -- -- -- -- -- -- -- -- On typical that most popular car millionaire.
Is a -- corolla really not the Mercedes and BMW we might think other net interest and the parent will -- they don't forget that.
Okay what else you know -- millionaires that the regular.
Aspiring nine action now well they save on average -- -- -- percent of their income okay.
And what we find is that typically for someone to retire on time if they start right off.
In their first job idiocy -- that 50% of their income.
And Americans receiving a lot less -- that you know what we are seeing percent plus 4% allows with third.
A third.
Now here's that.
Tough part -- up for the fact that for years if you've been seeing less than 15%.
And you need to save more than 50% just to get on track.
And this is your salary now.
50000 dollars a year you should be saving 15151000.
There whatever 15% that and a.
50% yeah I'm -- -- at the aggressive kids it's not what I -- Okay C should figure that out and just they gotta wait and adding your paycheck every single month is -- including my 401K contribution that includes 401K contributions also includes the match up that's when things that helps if you're getting 5% from your employer are doing this say about 10% a pac so not on top on off.
OK and then -- you say here on the we carry high interest debt.
High interest that our credit card debt being the biggest one how much is that a top on -- we're talking a lot of money average household -- has that about 151000 dollars in credit cards that.
Percent of -- So that's a lot of money.
That's being paid on interest and athletes that's the average -- a lot of people of a lot more than land.
And what ends up happening -- spend more money in interest that you do in the product you actually purchase.
So knowing you know to figure out ways of paying that down on becoming.
We think that -- really mean high interest debt pretty because -- those interest rates you're gonna make more money.
By paying down the debt in northern -- chances are investing that money and what about the way we make investment decisions what are some tips wasted.
Used it to better make them.
Listen to stand now Warren Buffett was asked the question how do you become rich by investing -- -- a person ask.
And his answer is we want to -- trick is to be fearful when other people are creating yet.
And greedy when other people are fearful.
And unfortunately that's the opposite of what we see typically employees doing in their 401K.
I'm in -- our money outside their 401K is.
When things are looking bad as they were recently that this whole fiscal -- situation.
People become very conservative they take their money out of the market.
I'm -- taking out near the bottom.
And when things are looking really didn't.
Think back to the dotcom era we tend to be more aggressively their mind we put more money into stocks into the more aggressive things unfortunately near the top.
It's like the idea is to reverse that -- get a financial planner that's one -- yeah any type that help.
Any type of help says that you're about 3% more and whether it's using a financial planner.
I'm using a target date funds which might be available again and -- when Hank.
Or using some kind of online tool which -- -- -- employers to make available.
-- how how employees actually getting financial education through there -- -- this is a growing trend.
Odd because the way it stands now is a lot of times the people most need financial help can afford to -- it.
And so what we're seeing is more often employers are offering this is an employee benefit.
I'm fortunate wanna place don't know that that's even available to talk to -- HR department see what's.
There that -- providing either by your retirement plan provider.
Where an unbiased financial education and went so we start our finance plan he said right at a you first shot right at ideally we're right -- -- at a early start to you know how many people actually do that.
Very few.
What we see it that of the people we're talking to most often we're talking to someone approaching retirement.
Telling us you know what I really wish I had done this much earlier yet you know what I've noticed in personal experiences that.
Middle East ten to be able to save more with the last money that you make in the morning make the money spent it's hard to -- make more sometimes in some instances your responsibilities get bigger actually it'll be a better taste -- that.
That's true and I know I saved Mormon -- -- its plan thousand dollars will it there isn't -- funny that you say that because.
You would think -- the other way around but we right at a school you don't have a lot of the responsibility is often have more to China and when it's imperative.
I'm ports are not taking care of anyone Allison.
Armed but there is a -- a tool that you can use to get around that a lot of employers are in 41 K plans have what they call an automatic contribution regret it later it yes.
So the way that works is to fire safe you're putting 5% of your money in your form intent and and you say okay I really wanna -- -- to 20%.
For most people what's it's not going to be feasible -- all their expenses and what -- -- escalator -- is automatically increasing your season 1% year.
Eric Carter thank you so much financial -- with financials the national but the website on the screen and ask for showing it -- -- some of these shafts -- the new chat up.
Viewers Chad and so we have -- from Sacramento saying the reason you're not -- -- is the same reason most people aren't richer.
I didn't work hard enough to be -- want more -- more I'll I look at that.
At some honesty there.
And lady -- and says to save is always the goal however.
It is hard to see we -- living from paycheck to paycheck and highlights that that most things will cost more this year.
So with everything going -- except your paycheck.
Her to say what you should still try to do it as Eric just told us.
