You Can't be Financially Independent in Debt

So I was thinking the other day how fast I would be able to pay off my debt . I knew that the only way I'd be able to be financially independent is that I paid off each and every loan it's not something I'm proud of but I am in debt and the only way that I'm coming out of it is by hard work and making each and every payment till they're gone.

I have a student loan that's with Discover(bought from Citibank aka the Satan of banks) and this loan is keeping me from being $250 closer to financial independence . The loan is $250 a month that means that every single f****** month, I have to pay the bill they charge me interest,they even send me a statement and I open it and read over the numbers and usually it's depressing.

As previously mentioned this is my old Citibank student loan, I used this for extra money to go to the university of Syracuse, because I wanted to study abroad. This is my pain for living in small mansion in London, getting on a plane to go see how many countries, spring break in Spain, this is a private tuition to Syracuse this is even get in including a $5000 scholarship that barely even put a dent in it. But it's not a that I didn't have a great experience or meet some great people, this is the extra holding me back of getting rid of debt, I am to $250 month closer to never having to pay a single payment ever again to Discover/Citibank, what a powerful statement, what a great feeling. Who knew that paying off debt or the anticipation of paying off debt would be so exciting, must be because I am that closer to financial independence.

I think about my money all time whether it's my job salary, investments, paying off loans, credit cards, cash, I really do think about it all the time. I think you have to, I believe if you want to excel at something you have to obsess over it, always be working towards your goal. If you have read the blog over time you have seen that consistency is one of the things I struggle with and my strategy of defeating this is not making this a marathon, but making each part of my life a sprint and then relax. During that sprint, I'm intense I have a goal, I have a destination that I am climbing towards. You have to want it, simple as that. I go through phases with music and listening to different items, well a while back I couldn't' get enough of motivation videos, they are great for when you are pursuing something and you want a boost.

I think that's where I'm at, I really think that I'm come to the point where I I'll do whatever it takes to get rid of debt and get closer to financial independence, closer to Warren Buffett and that's why I write about this stuff Finance Fitness and Dreams.

Why I hate Mr Money Mustache Part II Cable and Internet Edition

Here's the latest Why I hate Mr Money Mustache Series.  Disclaimer I don't hate anyone, I'm jealous in a couple ways, but I also am not a Mustachian.......Here you Go 

I always read Financial Bloggers alike and many people for that matter scream to the heavens, STOP WATCHING TV, cut your cable cord and save money.    They will then go on to talk about how they stopped spending so much money and in Mr Money Mustache's case "Cut your Cash-Leaking Umbilical Cord". 

Well Guess What?  I want to watch TV!  I want to watch sports, NFL, College Basketball, and any other show that I want to see right this minute!  There I said it, I think the reasoning is completely logic.  Here's goes: 

For example let's say you spend $50 month on the Internet for example, maybe $9/month for Netflix and another $9 for HuluPlus, i don't know, humor me for one second.  So there you are spending $68 for "Cutting the Cord"  Congratulations to ummm saving money? 

Don't get me wrong if you are able to get rid of TV and Wait for It......The Internet then good work, you are Frugal beyond your years and can put that $68 in a monthly account and make 10K in 20 years(no calculations actually done).  But every time I read an article about saving money on Cable TV it still involves the Internet.  So I skoff(not spell checking this word).   

I do think there are many out there spending too much for cable and Internet.  If you are spending $200/month and you are not getting paid to be Movie critic on the Internet, I think you have a cable and Internet problem. However if you are paying the small amounts of $40 or $60 month to have the luxury of watching the Green Bay Packers on Monday Night Football then this seems reasonable.   

 

 

The goal like with Cell Phones and my favorite Republic Wireless and for many across the board is to save as much money while still getting the highest quality product possible.  So I skoff(yep one more time for good measure) at the idea of cutting Cable TV, because most of the time it's not really true anyway and you are using the Internet to stream TV.  Like every purchase, it's important to do the research and get the most for your money.  $480/year is a lot of money to many people and don't get suckered into that $70/month $840 year after the 12 months are up, look for a deal with other providers, reach out to the customer service and get that bill lowered.  Just Remember It's OK to have Cable and the Internet which most seem to lull over. 

*********UPDATE***************

We made a decision to cancel our DirecTV service and go with the above mentioned Internet Plus option through Comcast, we are fairly new into the conversion, so I want to do a separate blog post explaining the cost breakdowns and if it actually works for us.

I'm a Credit Card Hypocrite

Credit Card Hypocrite

The other day my wife and I were shopping for a new laptop, she changed jobs and were without a computer for the house, unless you include "my computer" which my wife purchased around 2006, it has no battery so it must be plugged in at all times, cannot download pretty much anything because of a certain error message about running a program that from a drive, and heavens forbid you X out of something, it could be another 15 minutes before you are able to get back on, and did I mention you also cannot restart the computer or shut it off without unplugging it.  Oh yeah it's a Peach!  But I digress........ 

We did our research on computers before hand and had maximum budget before taxes, she knew pretty much what she wanted between 1 or 2 computers, it really came down to the size of the screen, which was a difference of $200.  Because my wife and I keep our separate accounts and one joint account for items we equally contribute for ie mortgage, food, utilities, etc  this purchase was all her, I can deal with the Peach listed above.  I like any loving husband gave my wife advice on the purchase as we were doing the research together.  I said and I quote "I would put the purchase on a credit card you might as well get the miles/cash bonus for a purchase you plan to make anyway"  HYPOCRITE!  Now I haven't used a credit card for I believe about 2 years ago to make a large purchase of Airline tickets.  I am credit card debt free and I have been the anti-credit card guy since then.  So why am I giving advice to use a credit card? 

It all starts with what I can control and what I cannot control.  My wife is smarter than I am and I can't make her not use a credit card, I can do my best to influence her and provide her as much information on why you shouldn't use a credit card.  Dave Ramsey for example mentions a study that says credit card use at McDonald's found that people spend 47% more when using credit cards instead of cash (http://www.daveramsey.com/article/the-truth-about-credit-card-debt/).  Now I believe the difference is we are not making a random purchase, this is a planned purchase with an expected amount that we have in cash available for this purchase.  So my turning point would be I believe if you are making a large planned purchase, cash available in your checking account, it is not against the rules(Finance and Fitness Dreams Rules).  If you are able to get an extra $10(1% of $1000) for this purchase.  This makes the assumptions that you will pay the bill in full and on time, which definitely factors into the decision.  There is many factors that need to be considered, but as I have mentioned previously I am not going to use a credit card to make purchases, now or in the future, I have loan debt to pay off and I do not feel comfortable putting any amount of money on my own personal credit card. 

My advice for my wife is slowly progressing to putting ALL purchases on the debit/checking, but like any habit, one of the hardest things to do is stop doing it "cold turkey" so we are working on a process of gradual reduction.  My wife has been in the habit of grabbing whatever card is in her wallet, debit or credit and making a purchase.  We have slowly progressed to using 1 credit card only to make purchases, then using that 1 credit card to make only business expenses.  She has since changed jobs and no longer needs to make purchases on the credit card for business expenses.  After January 2014 is over in theory there should be zero purchases on the credit card and only debit purchases.  Because we tend to travel a credit card purchase will be in the mix in the form of airline tickets, car rental, hotel, etc and I think it is in our best interest.  I will pay cash directly to my wife when these purchases are made.  It's not a credit card free life, but it is certainly still heading in that direction while we work our way to Financial Independence, 

6 years 4 months and counting..................... 

Finance=Fitness Lose Weight=Savings, etc

The name of the blog much like most of my posts here are Finance and Fitness Dreams, I think there are so many different correlations to each other, that it deserved a special post to compare a little.  I will be the first to tell you I struggle with both Finance and Fitness, I'm not 600 lbs or filing bankruptcy, but I struggle to not eat an entire bag of chocolate covered pretzels or rack up credit card debt and I think these are highly correlated.

Let's start with a couple things that always pop up when talking about Fitness or Finance.  He's born with great genetics, that's why he has a 6 pack or the finance equivalent they were born into that money, these are the same thing just different worlds.  The real question is ok that's true you don't have great genetics, your family didn't hand you a trust fund on your 18th birthday, so WHAT ARE YOU GOING TO DO ABOUT IT?

There are so many cases of people getting in better shape and increasing there net worth, so I believe these go hand in hand, here's a couple that Finance and Fitness terms that do that:

Finance=Fitness
Budget=Diet
Investing=Gym
Money/Job=Healthy Food You Eat
Credit Cards=Junk Food or Carbs
Cash=Meat/Protein
Good Debt=100 Calorie Snack Packs
Retiring Early=Crossfit or Explosive Movement Exercise
Bankruptcy=Obesity
Side Income=Going for that Extra Gym Session Saturday Morning
Investing in Index Funds=Walking

I'm sure there is 100's more, this was my brainstorm of Finance=Fitness, maybe you can come up with your own and we can get a huge list going or at least bigger list!

So many things have gone the other direction for Finance and Fitness in America and even all over the world, being in debt and overweight is the new "normal"  What are you doing to break out from this, I mean what am I doing?  I'm on a budget, I walk every day, I stay away from Credit Cards, I keep to a Paleo or Paleo Lite eating pattern, I practice what I preach.  Do I fail?  Every day, but if you move on from that daily failure, you can make the next day a success.  I ate chocolate covered pretzels yesterday(a lot of them), does that mean I'm ditching my Paleo Lite(90% Paleo, 10% Organic/Gluten Free), h-e-l-l no(said with attitude, neck cocked, possible finger wave), it means I'm going to do my best possible to eat right today and just as important as that is what went wrong yesterday so I can fix  this.  Because you know the definition of insanity is doing the same thing over and expecting different results.  I know that yesterday my breakfast was very light, so I had a snack early, which left my lunch very small.  That means today a couple things are changing, I went with a heavier lunch, of more meats and vegetables, not just the small sandwich I ate yesterday.  I will not be going to CVS/Walgreen's to pick up some more junk snacks.  Is there other solutions, h-e-l-l YES(just shouting this time), I could have not waited till my 3rd alarm and then slept 20 extra minutes and ate a real breakfast, eggs and bacon.  Today was not that day, so we moved to another option, I was prepared in some way.

Be prepared. if it's one thing that's important about Finance and Fitness it's being prepared, if you are not prepared to make a major purchase you might resort to using a credit card or not have a good lunch and your eating chocolate pretzels and looking like this guy.



I mean if you really think about Jared could be the spokes model, yeah Jared's a model for Finance and Fitness.  What this guy do he got in shape, ate right to lose weight, does some exercise and boom has a net worth of 15mm(here's an article that says so http://www.nydailynews.com/life-style/health/jared-subway-guy-marks-15-years-turkey-subs-article-1.1365511).  I of course prefer David Beckham and Warren Buffett(Mark Cuban rejected my offer, just kidding sorda).

I am also a big believer in "Laser Focus"  If you want to do anything to the best of your ability, you need to dedicate 100% of your energy if not you will not get the best possible results.  A simple way to think about this is try eating a healthy snack while doing a bench press, pretty tough to lift those 200lbs when you have an apple in your mouth.  I know that sounds a little ridiculous, but so is expecting the best results without dedicating yourself.  In previous posts I have mentioned that I Sprint and Relax, because otherwise I end up cheating a little on both.  For me I have 2 focuses currently and that's why I believe I ate a bag of chocolate pretzels yesterday, I wasn't laser focus on my fitness goals.  I have went from my Paleo challenge all the way down to Paleo Lite, I still have the ultimate goal of losing 14.8 lbs(down 2.2 lbs), but I'm not going to get there unless I change my habits Now.  I listen to a Dave Ramsey podcast every morning, as a friend from work says, he reminds you to save every day and I let him know yep I need that reminder.  It's the same for Paleo and Fitness, apparently I need an every day reminder.

Yes Finance does equal Fitness, neither one is easy, neither one is difficult on a numbers level spend less than you earn and eat less than you burn, seems simple enough.  It's not otherwise everyone would be wearing one of these shirts(abs in cutoff shirt and sweater tied over your shirt equals rich in my crazy mind).  So I guess what I'm saying is when I've made it to where I want to be I'll be wearing a cutoff belly shirt with a sweater tied over my shoulders............I can dream, Finance and Fitness Dreams.

How We Are Cutting Costs on Our Cell Phone and You Can To......Republic Wireless Review

So it finally happened, I got fed up with paying over $200 to have a cell phone.  Sounds crazy but so many people out there are doing the same thing whether it's with Verizon, At&t, T-mobile, or US Cellular. 

One sunny day I was looking at my bills and realized there wasn't a huge amount I could change, my mortgage payment's staying the same, my student loan payment is fixed, what really can I cut?  Then it hit me, I am personally paying $80 every month to be able call a few people, send a boatload of texts, and search the Internet on my train ride home.  $80, that's $960 year, that's almost a $1000, that's crazy.  Doing some calculations on bankrate.com  if you would invest $80 monthly into the stock market and received a 8% return, you would have 119K!!!  You can't buy a Rolls Royce Phantom with this money but at least a huge down payment!  Who am I kidding we wouldn't buy this car, but you see what i'm talking about now.  I didn't want to give up my cellphone, so I needed a solution.



I decided to check out some personal finance blogs(tons of great info out there) and came across a really interesting concept with phones which made a lot of sense to me.  The idea is to use Wi-Fi as much as possible when making phone calls, sending text messages, and checking the Internet.  If for any reason you are unable to connect to those it goes through the Sprint network.  I liked the concept and I liked the price even better.  Here's a Republic Wireless Price Plans below:
                                 



For me there was a ton of Pros and a few Cons.

Pros

• New Moto X Phone for $300, less than retail price
• Monthly Plan similar to mine, except $50 less month
• No 2 year Contract

Cons

• Quality of Service
• Initial Expense of phone and only 1 phone option

I did the math and came to the conclusion that after 6 months I would break even and save $300 in the first year alone and as much as $465 if I went to the $10 Cell and Talk plan. I'm not even taking into account that if I stayed with Verizon I would have bought a new Iphone 5S which starts at $199.99, if you take that into account I would be ahead after 3 months and saving money, like I'm sort of rich rapper guy throwing dollars everywhere. Here's the breakdown:

Month	Verizon Wireless	Republic Wireless $25 Plan	Savings	Republic Wireless $10 Plan	Savings
1	80	$330	-$250	$330	-$250
2	80	30	50	15	65
3	80	30	50	15	65
4	80	30	50	15	65
5	80	30	50	15	65
6	80	30	50	15	65
7	80	30	50	15	65
8	80	30	50	15	65
9	80	30	50	15	65
10	80	30	50	15	65
11	80	30	50	15	65
12	80	30	50	15	65
Total	$960.00	$660.00	$300.00	$495.00	$465.00

I bought the phone and took the plunge. Here's my review over the past 2 months of owning the new Moto X and joining Republic Wireless.(P.S. this link saves you even more if you join)

I purchased the phone online and used a promo code, similar to the link above and received the phone less than a week later in a Republic Wireless box with a shiny new Moto X inside.  Starting service could not have been easier, a few clicks and an email address here and there(Moto X is a Google Phone so having a Gmail account makes everything go smoothly).  I wanted to test it out since you have 30 days to return the phone, so I kept my Iphone and Verizon during this time, also because RW assigns you a phone number(you can change to your old number with a couple clicks as well) based on your area.  I had a couple small issues and huge pros alike, check out what I went through shown below:

Small Issues

• I couldn't receive text messages from Iphone users because my imessages was still turned and my phone number was still registered as an Iphone user so all messages were trying to go to my new Moto X phone and would reject.  I actually blame this on Apple more than RW but it was an issue for about a week until this was eventually fixed
• Sending picture messages in the first week or two was either extremely delayed like a day or two or the user did not receive them at all.
• Overall voice/service quality is lower than my original Verizon phone.  My wife probably notices it more than I do, I would say if Verizon is a 10 for service, RW has been an 8 for me.

Huge Pros

• Moto X phone is amazing!  I have been so impressed with the apps being just as good and in some cases better than Apple.  The Google Voice recognition(similar to Siri) is great, I couldn't be happier. The screen size, resolution, and camera are better in every aspect.
• My bill since I have started has amounted to a total of $22.05, with a $12.25 bill coming.  I started with the 3G plan and it worked well, I switched about 2 weeks ago to the $10 Cell and Text plan and haven't missed a beat along the way.
• Everything being connected to Google has been great, from Google Hangouts, Play Store, Gmail, the previously mentioned Google Voice, just great, much more friendly than every Apple product and Cloud system I have ever used.

Overall I have really enjoyed owning my new Moto X and being apart of Republic Wireless, it is a great way to save money and not to sign a contract for 2 years and pay $100 month to own a phone.  I highly recommend Republic Wireless, I have gone through the first 2 months of RW releasing the Moto X and it has been great.

 If you want to cut your cell phone bill and make the switch make sure to use this link to save an additional $19 by using this referral link http://referrals.republicwireless.com/a/clk/20z49M or clicking on this Republic Wireless hyperlink.  Any questions or concerns, let me know and I can tell you first hand!

Why this is a Retire Extremely Early and Paleo Lifestyle Blog

As you have probably seen in a few posts previously the overwhelming direction of Finance and Fitness Dreams entails two distinct directions,  Retiring Really Early and the Paleo Way of Life.

Many of you might think this is pretty interesting or many might think I'm crazy.  Good news is I'm OK with either one.  I don't want to be normal, I have absolutely no desire to be 45 and working in corporate America waiting for the day I can retire and "enjoy my older years".  One of my favorite quotes is "youth is wasted on the young". Why not retire at 30, 40, or 50?  Think of the things you would be able to do with your free time:  visit family, volunteer at a non-profit, maybe travel.  I'm not sure what your dream is but mine is many of these and more.

I'm on my way to retiring in 7 years. The concept is simple, have a passive income(non 9-5 job) that is greater than your monthly spending.  If you have 2K in income per month, well you better not spend a dime over that, whether you are traveling, buying groceries, or making a payment to the IRS.  Make more than you spend.  Crazy concept I know.  As most in there 30's are figuring out this is the  best income producing time you have had, so this is when you pile up savings and pay down debt.  We are currently on our way and our plan looks something like this in terms of year by year:

• Year 1(the next 7 months for us)-Pay off Half of my Student Loan Debt, pay 33% of our Rental House Off, Pay Regular Payments on our current home, Contribute the Matching portion to our Roth 401K and 401K(Year 1-7), Contribute personal savings to a personal Stock Portfolio(Year 1-7)
• Year 2-Pay off Student Loan Debt, Pay 33% of our Rental House
• Year 3-Pay off our Rental House(creating a Passive Income Stream in Year 4).  At the end of year 3, based on a tight budget we would be able to retire, since the income from the Rental House and our Current Home(paid for with rents coming in) would satisfy our current costs.  But to say it would be tight would be an understatement and I don't think that's my dreams to be living on a tight budget, it would take away some of the very things I want to do with my retirement.
• Year 4-Reevaluate our current situation, time frame, pay off schedule, and goals.  Pay 25% of our Owner Occupied Home
• Year 5-Pay 25% of our Owner Occupied Home
• Year 6-Pay 25% of our Owner Occupied Home
• Year 7-Pay 25% of our Owner Occupied Home and be Debt and Mortgage Free

So this puts us in a situation where we would have the option to retire.  We would live off what is considered the average household income in America.  We would need to budget for the every day expenses of groceries, utilities, etc while making sure our taxes, insurance, and health care were included in this.  After those few expenses everything else would be used to do the things we find retirement worthy.

                                       

During these 7 years there will be bumps along the road, but I have put our 7 year plan on a very Ronald Reagan conservative(I'm not political, although I do think Ronald Reagan seems pretty cool for an old guy) approach, especially with the fact that I think this can be done in 3 years and the reason for an evaluation to see what we think is best.  Along the way we may beef up our HSA Savings or Retirement Bonus of our 401K.  The strategy in year 4-7 may lean more towards creating an even larger emergency fund of all cash, possibly switching the investments to a larger portion in taxable versus non-taxable income.  This is the journey this is my path, I plan to retire early by using Rental Income.  Along the way I will read everything I can get my hands on from retire early finance blogs, books, and anything else that I think will bring me closer to my desired location, Retire Extremely Early!!!



I have chosen the Paleo lifestyle for many reasons but mostly because it yields results.  Recently I did the 30 day Paleo Challenge and was able to lose some weight and feel healthier, with items such as my Achilles being pain free, which is an amazing feeling from walking around every morning like you are 65.  Since the Paleo challenge I have been for the most part Paleo(minus Christmas, HoHoHo) along the way.  I am good not having Dairy, Legumes, and Pastas back in my diet.  The one exception is cheese, I'm from Wisconsin, that's against the rules.  I do keep the cheese to gluten free so usually Boar's Head or if I can find a cheese that is from Grass Fed Cow's then I'm in business.  So this week I am starting back with my Sprint and Relax Paleo.

I really believe eating right with Paleo and exercising(Walking my dog a couple times a day) is the way to health and feeling great.  So this week will be the week of the Chicken!  I will have a couple obstacles with work, new year's, and college basketball game, but will be a great test early.  My goal as of January 31st is to have less than 7 items that are not Paleo or at least Gluten Free.

I can't suggest enough to read up on eating Paleo.  If I could sum up Paleo I would say it's eating like your Grandma and Grandpa used to eat,  just more natural products, not processed or with a bunch of ingredients you can't pronounce.  Have you tried Paleo or thought about retiring early, let me know with a comment.

401K, Sounds Like a New Steroid Cereal

Good Morning FFD(Finance and Fitness Dreams),

As the year ends and we start thinking about Christmas, New Year's Resolutions, and Taxes  I thought it might be a good time to run down my thoughts and directions on a 401K and Roth IRA, two of the best investment vehicles around.  I don't pretend to be an expert and despite my stays at the Holiday Inn, I am not any smarter on the matter because of it.  But what I can do is give a brief common sense picture of what each one is and how I use them in our investment strategy.

First let's start with the 401K.  This is the definition from Investopedia, it's a little wordy but it gets the job done.

Definition of '401(k) Plan

A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.


So a 401K is a place where you keep your investments, depending on what your company offers as a selection it's usually mutual funds and index funds.  What happens for most people is they make a selection when they first start working to take out a % of there pay.  The good news is this is all done pre-tax before the government takes out Federal, State, and Social Security.  So for example if you get paid $1000 each pay period and you have elected to have 1% taken out this would take out $10 from each paycheck and be put into the mutual fund or index fund you have chosen.   By taking this out before taxes it also decreases your tax bill overall since the government has less to be able to tax .   The 401K part is really just a way of saying this is how we are going to tax or not tax your investments.

Your 401K is for the long term, we are talking retirement and when I say retirement this time I mean the earliest you can take this money out is 59.5 years old, otherwise they penalize you and we don't want that.  I won't get into to many specifics on each rule because that's not the purpose of this little blog.  The main points are this money is growing from your pre-tax money so it's a little larger % then if it would be taken out if Uncle Sam got a hold of the pay check first.  Your investment grows tax-free, so when you pile up all this money it's growing and growing and you are adding more and more, which allows it to become a huge monster snowball along the way.

One of my favorite features that a lot of companies utilize is what they call the company match.  I like to call it my Retirement Bonus, they give it to me every year as long as I promise to not spend it till I get to be old and don't want to work anymore.  What they say is OK if you put in 3% of your money all year, you know what we will match that and put it in your 401K account at the end of the year, free of charge.  So using the example of someone who makes 50K, you would have put in 3% or $1500($300 for every 10K), they would then put that same amount of $1500 in your account and congratulations you just got a Retirement Bonus!!!  They most commonly put this in as cash or some form of the company stock, but either way it's yours.

Here's a little summary of the Pro's and Cons of 401K so far:

PRO

• Money is taken out pre-tax allowing you to save a little extra(this also decreases your tax bill)
• The investments grow tax-free
• Company match or Retirement Bonus
• Automatic way of Saving Money

CON

• This is a retirement account and you will be penalized if you take out this money before you get old and want to retire
• You do have to pay taxes on the money(Death and Taxes people), so whatever your current tax rate is when you retire, you have to pay Uncle Sam
• Limited Choices of Investments and Not very much guidance from investment professionals on what you should invest in

Here's another option becoming more and more available with employers, but first a definition from Investopedia.

Definition of 'Roth 401(k) 


An employer-sponsored investment savings account that is funded with after-tax money. After the investor reaches age 59.5, withdrawals of any money from the account (including investment gains) are tax-free. Unlike the Roth IRA, the Roth 401(k) has no income limitations for those investors who want to participate - anyone, no matter what his or her income, is allowed to invest up to the contribution limit into the plan.

So the main difference between the 401K and Roth 401K is the money is funded after tax money, which limits the initial investment, but like the 401K this is allowed to grow not only tax-free, but when you decide to take your withdrawls after 59.5 these are also taken out tax free!  For me on this one it's a horse a piece as an old saying goes, since you are contributing to a retirement investment account, I would worry less about which one you are investing in and instead rather that you are investing period.

So what do I do?

Currently I invest 4% of my salary, which is what my company matches as well, I have no plans of changing this now or in the near future.  This is my retirement account, so I treat it like an old man, quiet, nice, and a little boring.  I invest in index funds, which are low cost funds that mimic the stock market.  I have them spread over a broad range, but I have them split between 3 or 4 investments, including the S&P 500, International, Small Cap, and a Target Fund(this overlaps some of the previous index funds).  These funds are low cost, boring investments just how I like it for my retirement.  I don't plan on touching this money until I am at the earliest 59.5 and if my plan goes as I have it drawn up, this will actually be money that I do not rely on and instead is more of a bonus account when I get to when the world thinks you should retire age.

My suggestion is if you have a 401K option at your place of employment  that includes a company match, start it today and put your investment percentage to receive the maximum your company offers.  I believe the 401K is a great tool to help you in retirement.  Even better ask a few people you know who are in the retirement age and see what they did.  Are they living off Social Security?  401K?  Real Estate?  Still Working?  Pensions?  Annuities?  Would they have done things differently if they knew what they knew now?  I'm a believer in the 401K I don't think it's the answer to everyone's retirement problems, but I certainly think it should be apart of everyone's and it's apart of mine that's for sure.    Here is a link to a short video that encourages you to invest as well, take a look it might get you excited to start one today!!

http://www.investopedia.com/video/play/understanding-your-401k/