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saving at the beginning of your career.

Posted on 11/12/13 at 11:53 am
Posted by kingbob
Sorrento, LA
Member since Nov 2010
67218 posts
Posted on 11/12/13 at 11:53 am
Knowing well the power of compounding interest, I want to be able to start saving and investing as soon as I start my career post graduation. I'll probably be making in the 50-60k range in South LA while saving up to get married and build a starter home on land I already own. What kinds of investments and accounts will work in the short term for saving up for these expenses in the next 2 years and what types of investments are great for saving and building a nest egg in the long-term?
Posted by beaverfever
Little Rock
Member since Jan 2008
32762 posts
Posted on 11/12/13 at 12:10 pm to
quote:

What kinds of investments and accounts will work in the short term for saving up for these expenses in the next 2 years and what types of investments are great for saving and building a nest egg in the long-term?
right now, literally none. Work on your credit and take out a loan for a house asap.
Posted by Ace Midnight
Between sanity and madness
Member since Dec 2006
89640 posts
Posted on 11/12/13 at 12:59 pm to
quote:

What kinds of investments and accounts will work in the short term for saving up for these expenses in the next 2 years and what types of investments are great for saving and building a nest egg in the long-term?


Mutual funds with Vanguard is a great way to start. Obviously, you will want to make sure you take advantage of any 401k matching with your employer, but, really, 15% of your gross income should go towards retirement, ASAP. You can never get this time in the market back (and that is a more important factor than the percentage, right now.)

As a basic example - every $120 dollars saved in 2013 will be about $20k in 2053 (assuming a modest 6%). If you wait until 2033 - it will cost you about $500 to get that same $20k in 2053.

With more aggressive 12% return projection, that $120 dollars in 2013 will be over $100k in 2053.

Likewise, you'll need $1200 to $1300 invested in 2033, to get that same $100k (again, at 12%) in 2053.

So, even if it is $10 per month (then up it whenever you can) pay yourself first. Then you can laugh at the debt/wage slaves when you're 65 and chartering your own spaceship to the moon.
This post was edited on 11/12/13 at 1:05 pm
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
73290 posts
Posted on 11/12/13 at 1:27 pm to
quote:

types of investments


real estate....as a great man once said....

quote:

"It's the cash flow stupid"


You can also put in what your employer matches in a 401k and max out a roth ira. Plenty of good funds out there for you to choose from.
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 11/12/13 at 4:05 pm to
You won't make much in 2 years off investing only a small amount.

If you had 1000 in the market at the beginning of this year, you'd have what, 1200ish now? And it's been a great year.

Not much when facing a house payment and kids

ETA at the beginning of your career.
Savings rate>>savings placement (unless you put everything in bonds of course)
This post was edited on 11/12/13 at 4:11 pm
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 11/12/13 at 9:13 pm to
So what I can tell you is,

Invest towards retirement
Make a lot(or put yourself in a position to)
Don't spend a lot
That's about all you (and me too) can do for now
This post was edited on 11/12/13 at 9:13 pm
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
73290 posts
Posted on 11/13/13 at 8:38 am to
quote:

kingbob



you want a decent return SECURED by RE?

Do some short term private lending. That is is you are not interested in rental cash flow or flips.

It can give you a decent return without a long term commitment.
This post was edited on 11/13/13 at 8:40 am
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