Where should I start throwing my money? | TigerDroppings.com

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rpg37
LSU Fan
Walls, MS
Member since Sep 2008
16510 posts

Where should I start throwing my money?


I am 25, in my first year out of graduate school, teaching and coaching while working on Phd currently. I am basically living paycheck to paycheck currently, as almost all my extra income goes toward student loans. I am down to about $5,000 total in loans.

I make about $55,000 annually with minimal payments outside of student loans. I paid off all my credit cards last month, have a credit score most recently totaled at 758 and have good lines across the board.

My question is after I finish student loan payoff, where do I go next? Savings, 401k, Roth, etc. What is the bext next move when it comes to long-term security?

Sorry for the 'youngster' question, but I want to be fiscally repsonsible and have a plan better than my current generation friends.







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fatboydave
LSU Fan
Fat boy land
Member since Aug 2004
6650 posts

re: Where should I start throwing my money?


Bet the Ponies LINK





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TDsngumbo
LSU Fan
Member since Oct 2011
5207 posts
 Online 

re: Where should I start throwing my money?


Max out your 401k if you have one. Also create and max out a Roth IRA. Growth, aggressive growth, and international stock mutual funds. Whether you max them all out or not, be consistent in your contributions each month and by age 55-60, you will be a very wealthy man.





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Teddy Ruxpin
LSU Fan
New Orleans, LA
Member since Oct 2006
18518 posts

re: Where should I start throwing my money?


For sure. And as i mentioned in another thread, if you qualify get your self an HSA and abuse the hell out of it.

That gives you 3 advantaged accounts for investing






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Powerman
LSU Fan
Corpus Christi, TX
Member since Jan 2004
120423 posts

re: Where should I start throwing my money?


quote:

if you qualify get your self an HSA and abuse the hell out of it.

?






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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
15654 posts

re: Where should I start throwing my money?


DINARS BABY! DINARS!





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Blakely Bimbo
Alabama Fan
Member since Dec 2010
1073 posts

re: Where should I start throwing my money?


quote:

Max out your 401k if you have one. Also create and max out a Roth IRA. Growth, aggressive growth, and international stock mutual funds. Whether you max them all out or not, be consistent in your contributions each month and by age 55-60, you will be a very wealthy man.


Fed have got their eyes on the prize.

quote:

The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments. “That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview. He didn’t provide additional details.


Bloomberg

I don't know if anyone has already posted this article from Jan. 17. Over time, The retirement savings accounts are going to be at risk if this country does not get a handle of spending. You can bank on it.







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rpg37
LSU Fan
Walls, MS
Member since Sep 2008
16510 posts

re: Where should I start throwing my money?


quote:

Over time, The retirement savings accounts are going to be at risk if this country does not get a handle of spending. You can bank on it.


Does this make longterm investment unsafe for someone at my age?






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matthew25
Ole Miss Fan
Member since Jun 2012
3367 posts

re: Where should I start throwing my money?


Not at all. Invest at least 15% of your salary.

I assume you will have a pension in your profession?






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rpg37
LSU Fan
Walls, MS
Member since Sep 2008
16510 posts

re: Where should I start throwing my money?


I apologize for being ignorant, but I am on this: I have not been taught. What exactly is a pension? I am a school teacher and coach. I have benefits, but don't fully understand them to the nth degree, yet.





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siliconvalleytiger
LSU Fan
Northern California
Member since Apr 2004
22167 posts

re: Where should I start throwing my money?


Save money. I invest in 401k and some stock but I'm a traditionalist in that I like to save money in the bank. The only thing for sure.





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Ace Midnight
LSU Fan
Ball, LA - Home, Sweet Home
Member since Dec 2006
29446 posts

re: Where should I start throwing my money?


quote:

Sorry for the 'youngster' question, but I want to be fiscally repsonsible and have a plan better than my current generation friends.


quote:

I am basically living paycheck to paycheck currently, as almost all my extra income goes toward student loans. I am down to about $5,000 total in loans.


Baby Step 1 - set aside $1000 for emergencies

Baby Step 2 - retire all of your debt, aside from a mortgage on the primary home

Baby Step 3 - save 3 to 6 months of your expenses, should you lose your job.

Those are good places to start.

quote:

My question is after I finish student loan payoff, where do I go next? Savings, 401k, Roth, etc.


15% of your income in a Roth account. Make sure to max out anything that is matched by your employer.

quote:

What is the bext next move when it comes to long-term security?


Equities - stocks, mutual funds and (if you can figure them out, ETFs) - over any 20 year period, (even the 1930s and, more recently, the aughts), equities will outperform fixed investments - although timing can occasionally cause you to not realize profits, but you're young, so risk should be a minimal concern, as is your contribution amount.

Another principle to stick to is - steady contributions to your retirement are paramount. As a 25-year old, time in the market is far more important than market timing or how much you contribute. You have 40+ years of compound interest and dollar-cost-averaging to protect you. Budget your retirement like any other expense, with a goal of 15% of your gross income dedicated for that purpose (and if it needs to be 12% or 13%, that's fine, but there better be a good reason - that shiny new cellphone and high monthly plan can cost a young person like yourself $50k, $60k, even more in unrealized retirement savings in 40 years.)

Pay yourself first, avoid consumer (really any unnecessary) debt, plan ahead (emergencies CAN be planned for) and you should do alright.



This post was edited on 2/3 at 9:33 am


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Ace Midnight
LSU Fan
Ball, LA - Home, Sweet Home
Member since Dec 2006
29446 posts

re: Where should I start throwing my money?


quote:

I apologize for being ignorant, but I am on this: I have not been taught. What exactly is a pension? I am a school teacher and coach. I have benefits, but don't fully understand them to the nth degree, yet.


If you work for a public school system, you very likely have a pension plan. Your first step should be to get the basic information on your contributions, where they go, are you also contributing to social security, if you have any control over your pension contributions - and the tax consequences.

The basics of a pension are: you work for x number of years and are entitled to y amount of money for life (a "life" pension). Sometimes they take money out of your check to fund it - sometimes it is funded externally. Sometimes you don't make Social Security retirement contributions (and are, therefore, ineligible for SS retirement benefits - just medicare), and sometimes you do and they factor in both the pension plan AND SS retirement as part of your retirement "package" (with a third element being, typically, some form of 401K or employer-sponsored IRA).

However, current pension structures are so variable and fluid, you need to check your particulars. Some allow "early" retirement, though there are also IRS regs, penalties, etc., so you need to determine when the sweet spot is, or where the various tiers are so that your planning outside of the pension syncs up with that.

Hope this helps!



This post was edited on 2/3 at 9:48 am


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