“Compound interest is the eighth wonder of the world

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Presentation transcript:

“Compound interest is the eighth wonder of the world “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein

Get Rich Slowly First job out of college: $34,900 annual salary, $200 monthly health insurance premium Figure out Gross Pay and Taxable Income per month Use Taxable Income to figure out SS, Med, Fed , and State taxes

Get Rich Slowly A new elective deduction: The IRA IRA (Individual Retirement Account) Can be either a 401k or a 403b Tax codes 401k is for private workers (Business, Medical, etc) 403b is for public workers (Teachers, Firefighters, Cops, etc) Allows workers to use pre-tax funds to save for retirement IRA funds will not be taxed by federal or state Unfortunately WILL be taxed by Social Security and Medicare.

Get Rich Slowly First job out of college: $34,900 annual salary, $200 monthly health insurance premium Now: Set up a pre-tax 401k or 403b Deduct $260 per month in wages toward your 401k or 403b Find your 4 taxes now. Compare your net pay with 401k/403b to net pay without How much is the $260 ACTUALLY costing you in net pay?