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Afford Anything

Ask Paula | 10-Year-Old Asks: How Do I Save for My First Car?

Aug 30, 2023
01:06:13
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Snipd AI
In this podcast, the hosts answer questions from a 10-year-old about saving for a first car, debate the best investment strategy for a young investor, explore different approaches to investing and the importance of industry knowledge, and discuss retiring on dividends vs the 4% rule. They also provide advice on whether to convert a traditional IRA to a Roth account while having student loans.
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Podcast summary created with Snipd AI

Quick takeaways

  • It is advisable for Erica to prioritize converting her traditional IRA to a Roth IRA due to her low tax bracket and the potential long-term tax savings.
  • Erica should focus on the conversion of her traditional IRA rather than aggressively paying off her student loans in order to take advantage of the current tax benefits and have more financial flexibility in the future.

Deep dives

Convert Traditional IRA to Roth IRA

Erica should prioritize converting her traditional IRA to a Roth IRA as soon as possible. This is a unique opportunity for her to do so at a lower tax bracket, as she will only be earning income for five months this year. By converting now, she can take advantage of the lower tax rates and potentially save a significant amount of money in the long run. It's important to act quickly, as this opportunity may not be available next year.

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