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re: What would you do if you were me?
Posted on 5/26/15 at 2:25 pm to Lou Pai
Posted on 5/26/15 at 2:25 pm to Lou Pai
Open a brokerage account and buy a bunch of mutual funds.
Many offer a ton of free trades to begin with, if not low fees.
You can get in and out pretty easily and earn a lot more than the savings account.
Get one of the higher yield savings accounts out there. Barclays etc.
Many offer a ton of free trades to begin with, if not low fees.
You can get in and out pretty easily and earn a lot more than the savings account.
Get one of the higher yield savings accounts out there. Barclays etc.
0
Posted on 5/26/15 at 2:26 pm to Lou Pai
quote:
Yeah, just pick out a couple ETFS and allocate very aggressively (at least 90% equity if not 100%). Just to warn you, a market "correction" is assumed to be very likely over the next 6-12 months; however, this should really not affect you at all given your time horizon.
Yes, I've been told this by my dad. And I'll definitely go the aggressive route until I'm older.
Posted on 5/26/15 at 2:28 pm to The Spleen
quote:
It's a good idea to keep 3-6 months of your salary in some sort of liquid account you can easily access if you were to lose your job for some reason. So I wouldn't take all of that out.
It should be 3-6 months of living expenses, not salary since he is saving so much.
Personally I would keep 2-3k in a bank account, throw as much as you can in a roth and then invest the rest in the market. Unless something like a home or car purchase is planned. Then set that aside.
But don't buy a house when you are 22, that is retarded.
Posted on 5/26/15 at 2:31 pm to Hawkeye95
quote:
But don't buy a house when you are 22, that is retarded.
What's retarded is throwing money at an apartment complex and not owning anything. It's like burning money. At least with a house/condo you might see your money back.
But I agree. I'll probably get a house around 28.
Posted on 5/26/15 at 2:34 pm to Aubs10
quote:
What's retarded is throwing money at an apartment complex and not owning anything. It's like burning money. At least with a house/condo you might see your money back.
Not as "retarded" as you think.
You can get your arse handed to you if you have to sell your house in a pinch to move jobs etc which could be 20-30 months rent even on a cheap house. Hell, not to mention if the market crashes out of your favor.
It's a nice stationary asset but at 22, its not that big of a deal paying rent. I'm 26 and don't plan on owning anything until at the very least 28 and I would really only consider buying a townhouse that has 2 units so I could use the other side's rent to pay the mortgage.
Selling houses can be a bitch and its a nice head ache not to have that is worth paying rent for.
In my field there's shite tons of opportunities to move careers/companies so I expect to do that for a while before wanting to own anything.
You're a much more attractive prospective employee btw when you tell them you "rent" when they ask about your re-lo. Companies get their asses handed to them helping people sell houses and they try to avoid it.
This post was edited on 5/26/15 at 2:37 pm
Posted on 5/26/15 at 2:40 pm to Aubs10
quote:
Also, are you including general living expenses in your "emergency fund"? If not, how much do you have in general expenses?
Yes, that emergency fund consists of enough money to pay the bills and put food on the table for 8-10 months.
Yes, the house thing is all situational. Unless you think you have a chance of getting transferred in the next couple of years, I'd start thinking about buying a house and budgeting for down payments, etc. Don't get in any hurry, but rates are really low right now, and if you're pretty comfortable in the city you live in, I don't see why you shouldn't buy a house.
Posted on 5/26/15 at 2:50 pm to STLhog
quote:I don't think investment property would be a bad idea for the OP at his age and situation.
I would really only consider buying a townhouse that has 2 units so I could use the other side's rent to pay the mortgage.
Posted on 5/26/15 at 2:52 pm to Aubs10
quote:
What's retarded is throwing money at an apartment complex and not owning anything. It's like burning money.
At 22, you have your whole life in front of you. You should be out having a good time, meeting people, doing things, not working on a house. Renting offers you flexibility, which can help if you want to move or have to move.
Also, chances are the OP is not married. Woman have a very strong opinion about homes.
And paying rent isn't that bad IMHO. Yes, you will be losing money but that loss comes with added flexibility in life. And less time doing chores, and more time out there enjoying your $75k salary. You will never feel as rich as you do now.
I got out of school and was make $65k at 24 (1998). I felt so fricking rich, much richer than when I was making $100k at 30. or even now where I make more.
This post was edited on 5/26/15 at 2:55 pm
Posted on 5/26/15 at 2:55 pm to Hawkeye95
quote:
At 22, you have your whole life in front of you. You should be out having a good time, meeting people, doing things, not working on a house.
I'm with you 100%. I won't get a house until I'm married and settled on a job that I know I'll be at for a few years.
quote:
Woman have a very strong opinion about homes.
Posted on 5/26/15 at 3:01 pm to Aubs10
quote:I'd spend considerable time testing the market there too with that kind of cash flow.
Women
Posted on 5/26/15 at 3:24 pm to Aubs10
quote:
Jack Sh*t. Like 1% if that. Thanks Wells Fargo.
I would be jumping for joy if i was getting 1% on my savings. Chase is only giving me 0.08% on a fairly sizable balance.
This post was edited on 5/26/15 at 3:26 pm
Posted on 5/26/15 at 3:42 pm to Aubs10
1. Keep 3-6 months of salary or budgeted expenses (your expenses are probably low so you dont need 100% of 6 months salary) in a liquid account as an emergency fund - in case you lose your job, car blows up, break your leg, etc.
2. Invest in 401k up to the employer match, but no more than the match, and no less.
3. Invest full amount (roughly 5k per year) in Roth IRA.
4. Take out some money for fun every month and keep it in a separate liquid account from your emergency fund. You deserve to have fun too you know
5. Invest everything else in your preferred investment strategy, either mutual funds or regular stocks.
Source: Same situation as you my man
2. Invest in 401k up to the employer match, but no more than the match, and no less.
3. Invest full amount (roughly 5k per year) in Roth IRA.
4. Take out some money for fun every month and keep it in a separate liquid account from your emergency fund. You deserve to have fun too you know
5. Invest everything else in your preferred investment strategy, either mutual funds or regular stocks.
Source: Same situation as you my man
Posted on 5/26/15 at 3:49 pm to Aubs10
Time is on your side my friend. Invest with a vengeance and I promise you won't work past 40 unless you want too.
Posted on 5/26/15 at 5:04 pm to Aubs10
As others have said I'd meet employer match (9%) and max Roth ($5500 per year), other than that I'd keep a emergency fund of about 15k and have fun.
If you want to keep saving so much don't get married
If you want to keep saving so much don't get married
Posted on 5/26/15 at 7:46 pm to Aubs10
Take a trip and enjoy your money
Posted on 5/26/15 at 9:43 pm to Upperdecker
I'm curious as to why it isn't recommended to put more than the match into the 401k? Why not the full $18K plus the $5500 towards the Roth if he can easily contribute that much.
Posted on 5/26/15 at 11:07 pm to Aubs10
quote:
22 years old
$75,000 annual salary
America
Posted on 5/27/15 at 8:24 am to Lou Pai
quote:No way OP makes it to retirement before govt steals at least half of it. Anyone who can't see it is completely blind and naive. Unfortunately, there is no good answer.
It will probably be seized from us in 40 years.
Posted on 5/27/15 at 8:48 am to Aubs10
Congrats to the OP! You're in a great position to direct your future.
I think the most important thing at this point is to have all your investment "vehicles" in position. Fund the Roth and open a brokerage account. Once they're open, find a funding level that you're comfortable with and follow through with your plan. Maintain an accurate budget, it will be one of the tools that will give you flexibility to deal with an unexpected event.
You have the income and lifestyle needed for financial success, you just need to get used to the practice of doing the right thing every month/paycheck.
I think the most important thing at this point is to have all your investment "vehicles" in position. Fund the Roth and open a brokerage account. Once they're open, find a funding level that you're comfortable with and follow through with your plan. Maintain an accurate budget, it will be one of the tools that will give you flexibility to deal with an unexpected event.
You have the income and lifestyle needed for financial success, you just need to get used to the practice of doing the right thing every month/paycheck.
Posted on 5/27/15 at 11:31 am to Aubs10
quote:
What's retarded is throwing money at an apartment complex and not owning anything. It's like burning money. At least with a house/condo you might see your money back.
Not knowing what part of the world you live in, I would go the condo route if anything. I was in a similar situation as you coming out of college and had enough money to buy a house/condo, I chose to keep renting and am now in the process of relocating to NYC. I do not think I would have been able to make this move had I decided to buy a house 4 years ago. Give your job 5 years and see where you are at then.
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