ChooseFI 513 | Make Your Own Dividend | Mailbag with Rachael
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Sep 30, 2024 In this discussion, Rachael Camp, a CFP with Creative Financial Designs, shares valuable insights on achieving financial independence. They tackle the benefits of starting early, the nuances of the 4% rule, and how to navigate retirement accounts effectively. Rachael emphasizes strategies like house hacking to boost savings, deciphering Roth vs. Traditional accounts, and managing safe withdrawal rates post-retirement. The conversation also highlights the psychological aspects of early retirement, providing listeners with a roadmap for their financial journeys.
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Early FI and Savings Rate
- Gabby's 51% savings rate at 22 is excellent; prioritize increasing income after establishing an emergency fund.
- Focus on maximizing income since there's a limit to reducing expenses.
Roth vs. Traditional for Young Investors
- Consider Roth contributions in a low tax bracket (10-12%) for potential long-term benefits.
- Pay attention to Roth vs. Traditional, especially when starting young, as future income might increase.
House Hacking and Real Estate
- House hacking can significantly reduce housing costs, allowing for increased savings.
- Treat any real estate investment as a long-term hold (5-10+ years).