Use this link below to sign up with Webull and receive up to 12 free fractional shares. ⤵️ When you are a high income earner and receive a W2 you are limited on tax deductions. So in order to reduce your taxable income you have to find out ways to do this. The reason I maxed out my 401k investing in index funds for 10 year was to reduce my taxable income and pay less taxes. When I started working at my corporate job back in 2011 I knew I wanted to be a millionaire and I wanted to do it in 10 years. In order to become a millionaire that means you have to invest your money but 1st you have to have money to invest. Second you need to know how to keep that money in your pocket by learning how your money is being taxed at you job. I calculated how much money I would pay in taxes if I didn't contribute to my 401k and what my paycheck would be. Then I calculated what my paycheck would be if I contributed the max amount. If you want to learn how to do this check out my other video and I explain step by step. After figuring this out I decided to max out my 401k and the reason I was doing this was because that meant I got to keep more of my money that I worked so hard for and my money wouldn't go to paying taxes. The money would be inside my 401k growing exponentially and compounding over time. Another reason I maxed out my 401k was because my company would match 100% up to $5000. So every year I was maxing out my 401k and receiving $5000 by doing this. This means the small sacrifice I made by maxing out my 401k would ultimately set me up for life. Now all I had to do was select a good fund to invest inside my 401k. After comparing all the investments I decided to select an S&P 500 index fund that tracked the stock market. I have only invested in S&P 500 index's or similar funds inside my 401k because these funds have the lowest expense ratios and highest rate of return. Now I know people will say you cant pull money from your 401k before the age of retirement but you actually can in the form of a loan to yourself. If you want to now how to avoid PMI (private mortgage insurance) when you buy a home check out my video in this video I talk about pulling a 401k loan out to put a down payment on a house. If you are reading this I'm definitely not making these video's to brag, I'm simply sharing what I've learned and what has helped me to become financially independent. The whole process takes lot of time and planning. I love running the numbers and making calculations to come up with the best decisions. I am a mechanical engineer and this is how I think. Please like and subscribe and smash that like button. Please follow me on all my other social media platforms #401k #401kcontribution #401kmatch This is Not financial advice. This is For ENTERTAINMENT PURPOSES ONLY. Please consult a licensed, qualified CPA for professional tax advice....(read more)
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