When people come into large sums of money quickly or early in life, be it from a new job or inheritance, it can take some time to understand how to best use those funds. Are you setting aside enough for later?
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If you started making millions at 18 or 19 years old like some professional athletes, it might be tough to figure out what to do. That’s why Milwaukee Bucks owner Marc Lasry is setting aside 10 percent of players’ salaries for their future.
Similarly, if you come into an inheritance you may have a lot to learn on how to manage the money appropriately. You need to think about the future, not just the large sum of money in the short-term. What are the tax implications of that money? How can it best be used in the long-run?
Regardless of your salary (because let’s face it, most of us aren’t pro athletes), setting aside 10 percent of your salary is crucial to saving for the future. Do you set aside at least that much now?
Then what about the mortgage? Is that something you should pay off in a hurry or is it something you should be cautious about paying off aggressively? You may want to do the math to see what will be a better use of your funds.
Listen to the entire episode or click on the timestamps below for a specific segment.
[0:16] – Co-owner of Milwaukee Bucks setting aside 10 percent of athlete’s salary for retirement.
[2:32] – Everyone should set aside 10 percent of salary or more toward retirement.
[3:35] – A million dollars in savings is a lot of money, but if your spending habits are high and you don’t have enough saved for retirement it’s not as much as it used to be.
[4:43] – Education is critical with your finances, whether you made money a lot of money fast or if you are just starting out.
[6:03] – How do you prepare for 30-40 years in retirement?
[8:42] – Should you pay down your mortgage before retirement?
Brian Bowen – Contact