Financial Advice For 22 Year Old
- Thread starter lancerplayer
- Start date
- Status
Originally Posted By: hardcore302
I know it's simple, but bringing your food to work will save some moolah. It's nice to see young responsible people. Good luck, you seem to be on the right track.
I do this mainly to eat more healthy food and smaller portions. But I do go for a fresh fruit bowl for $1.89 in the morning. I am a master at loading the bowl with as much possible fruit as I can as its not weighed (yet).
I know it's simple, but bringing your food to work will save some moolah. It's nice to see young responsible people. Good luck, you seem to be on the right track.
I do this mainly to eat more healthy food and smaller portions. But I do go for a fresh fruit bowl for $1.89 in the morning. I am a master at loading the bowl with as much possible fruit as I can as its not weighed (yet).
Many folks "maximize" retirement contributions. While good, I recommend only maximizing your matched retirement.
Remember to enjoy your 20's too. You only are 20-30 once. Also don't get married till you finish growing up. Typically 30+.
Skip expensive and/or unreliable cars and purchase something that is generically usable in all stages. Eg 4 door comfortable compact - midsize. Changing out vehicle for needs is very expensive typically. My regret in vehicle buying was that. I sold two perfectly running vehicles due to not going for the most generalized one (4 door midsize sedan/wagon). Civic 2dr coupe (terrible form) and WRX(blast but not practical for family or wife's ears).
Owning a home is wonderful(done that) but make sure it again suits your needs now and future and is in best area for schools. Schools if you settle locally or need to unload the house.
My previous homes too small and then next was poor school system. Too bad since I owned the 2nd outright. 15 years left on this one
but at least I own 60%.
Remember to enjoy your 20's too. You only are 20-30 once. Also don't get married till you finish growing up. Typically 30+.
Skip expensive and/or unreliable cars and purchase something that is generically usable in all stages. Eg 4 door comfortable compact - midsize. Changing out vehicle for needs is very expensive typically. My regret in vehicle buying was that. I sold two perfectly running vehicles due to not going for the most generalized one (4 door midsize sedan/wagon). Civic 2dr coupe (terrible form) and WRX(blast but not practical for family or wife's ears).
Owning a home is wonderful(done that) but make sure it again suits your needs now and future and is in best area for schools. Schools if you settle locally or need to unload the house.
My previous homes too small and then next was poor school system. Too bad since I owned the 2nd outright. 15 years left on this one
Congrats on starting so young. I wish I had started at your age.
-Avoid lifestyle inflation like the plague.
-Shun our consumerism culture.
-Save 50~70% of your earnings. (Seems impossible, but believe me, it really is attainable.)
-Do this and you'll be financially independent (able to retire) by the time you are 35!!!
The following two websites contain all the information you'll ever need.
http://www.bravenewlife.com/
http://earlyretirementextreme.com/
-Avoid lifestyle inflation like the plague.
-Shun our consumerism culture.
-Save 50~70% of your earnings. (Seems impossible, but believe me, it really is attainable.)
-Do this and you'll be financially independent (able to retire) by the time you are 35!!!
The following two websites contain all the information you'll ever need.
http://www.bravenewlife.com/
http://earlyretirementextreme.com/
Move out of Ohio...it is one of the 11 death spiral states
I would save 12months living expense
Buy a decent car. need transportation, dont get stupid here.
Then if you get 401K match that is all you do.
Then pay all your debts off
Then save for deposit on house.
After you get the house then up the 401K
Buy a decent car. need transportation, dont get stupid here.
Then if you get 401K match that is all you do.
Then pay all your debts off
Then save for deposit on house.
After you get the house then up the 401K
Last edited:
Originally Posted By: greenjp
Don't have children until you're ready. Marry well.
As for actual financial advice:
- don't be afraid to be cheap. The monthly bills people can accrue on cell phones, data plans, TV service, internet, etc are incredible. Figure out what you actually need and then be careful when getting extra.
- at a minimum, put whatever you need into your employer's 401k to get the full match if it's available. Beyond that, set aside as much as you can.
- continually save for things that are regular but not constant. For instance, budget $250 a month (or whatever) for your car payment, whether you have one or not.
- don't skimp on dental care.
jeff
Lot's of good life advice here!^
Don't have children until you're ready. Marry well.
As for actual financial advice:
- don't be afraid to be cheap. The monthly bills people can accrue on cell phones, data plans, TV service, internet, etc are incredible. Figure out what you actually need and then be careful when getting extra.
- at a minimum, put whatever you need into your employer's 401k to get the full match if it's available. Beyond that, set aside as much as you can.
- continually save for things that are regular but not constant. For instance, budget $250 a month (or whatever) for your car payment, whether you have one or not.
- don't skimp on dental care.
jeff
Lot's of good life advice here!^
From a 27 year old who owns a bit of real estate, who started 4 years ago in the crash of the real estate market with $0, here is what my advice is for what its worth.
1. Become cheap, save most of what you make. This way you can reinvest your income.
2. Get interested and involved in a business, always good to have lots of irons in the fire. Invest in stocks, do a bit of real estate if you have the stomach for it, etc. Jobs can be fantastic but they only make you so much.
3. Ignore the stupid [censored] your friends do with their money, just keep investing.
4. Think of your dollars as soldiers. You want to send them out all the time to wage war and come back with lots of prisoners. Where is the best use of your money?
Right now I'm a real estate guy, but in a few years I'd love to get into something else. Shipping maybe? Always thought owning a container ship or two would be a fun way to make a buck.
JHZR2 I'm building a house for myself next year in a very desirable area and would like to have it paid off in 5-7 years.
1. Become cheap, save most of what you make. This way you can reinvest your income.
2. Get interested and involved in a business, always good to have lots of irons in the fire. Invest in stocks, do a bit of real estate if you have the stomach for it, etc. Jobs can be fantastic but they only make you so much.
3. Ignore the stupid [censored] your friends do with their money, just keep investing.
4. Think of your dollars as soldiers. You want to send them out all the time to wage war and come back with lots of prisoners. Where is the best use of your money?
Right now I'm a real estate guy, but in a few years I'd love to get into something else. Shipping maybe? Always thought owning a container ship or two would be a fun way to make a buck.
JHZR2 I'm building a house for myself next year in a very desirable area and would like to have it paid off in 5-7 years.
Last edited:
If you can mooch off your parents' health insurance until you're 26 (and you're healthy and their jobs are stable), do it.
Figure out how to do stuff for yourself: car repairs, haircuts, cooking. Any time you have a human paying attention to you is expensive!
Agree on the match 401k thing.
I'd make the regular minimum payments on your student loans if they're under 4% or so. Save for a house. Put that nearly first. House prices AND interest rates are poised to jump "sometime" though they sure have been in the doldrums. Buy something plain and boring, you can always rent it out when you own your dream house.
Rent is money down the toilet. PMI insurance on your mortgage is as well but it's better than rent. See if you can refinance at 20% equity to shake that off a year or two after you buy your house. If you own your home the chicks will find you!!!
Figure out how to do stuff for yourself: car repairs, haircuts, cooking. Any time you have a human paying attention to you is expensive!
Agree on the match 401k thing.
I'd make the regular minimum payments on your student loans if they're under 4% or so. Save for a house. Put that nearly first. House prices AND interest rates are poised to jump "sometime" though they sure have been in the doldrums. Buy something plain and boring, you can always rent it out when you own your dream house.
Rent is money down the toilet. PMI insurance on your mortgage is as well but it's better than rent. See if you can refinance at 20% equity to shake that off a year or two after you buy your house. If you own your home the chicks will find you!!!
1. live well below your means,
2. plan well ahead for stuff you need like major expenses
3. first pay off your debt, I mean get rid of it.
4. when you hear the following phrases "I own real estate", "I am not throwing away money by renting" - you should translate these to "I have large loan that I will never pay off", "I am throwing money away by paying interest" it is like paying a dollar to save 10 cents.
5. discipline - sit down and make a budget and stick to it.
6. perverse demand - don't get emotional on stuff like say engagement ring, first car, house etc.
7.Lastly - put away the MAX possible in 401k, I think it is $16k or something, keep in cash if you don't understand stocks. This is the ONLY thing will save you money.
8. Marry a lawyer, doctor, surgeon etc ;-)
2. plan well ahead for stuff you need like major expenses
3. first pay off your debt, I mean get rid of it.
4. when you hear the following phrases "I own real estate", "I am not throwing away money by renting" - you should translate these to "I have large loan that I will never pay off", "I am throwing money away by paying interest" it is like paying a dollar to save 10 cents.
5. discipline - sit down and make a budget and stick to it.
6. perverse demand - don't get emotional on stuff like say engagement ring, first car, house etc.
7.Lastly - put away the MAX possible in 401k, I think it is $16k or something, keep in cash if you don't understand stocks. This is the ONLY thing will save you money.
8. Marry a lawyer, doctor, surgeon etc ;-)
Yes, max out your 401k denominated in depreciating U.S. dollars and untouchable for decades without hefty penalties by which time the government may have outright seized that 401k, crashed the dollar, or both.
Put a portion of your savings in physical gold, silver and if possible income producing real estate to protect wealth.
Put a portion of your savings in physical gold, silver and if possible income producing real estate to protect wealth.
I agree with paying off the mortgage asap. I was shocked how much interest I was gonna pay on a 30 yr loan. 200k in just interest with 4.25 fixed rate. so I'm gonna pay my home asap. I'm aiming for ten years. I don't wanna go to 15 yr b/c anything could happen with our jobs.
A good start might to think where/what you want to be in life in 5-10-20 years. It sounds like you're happy working for someone right now, but if at some point you want to "run the show" you might make some different financial planning decisions among many other decisions.
I'll give you some solid advice, from an old and experienced, low income man. You can "save" and "invest" all you want, but if you don't have significant income, your money won't be worth much at the end. Real world inflation gobbles up any long term interest. You must EARN to have. Period, end of story.
From Heinlein: "$100 placed at 7 percent interest compounded quarterly for 200 years will increase to more than $100,000,000 — by which time it will be worth nothing"
If you don't believe me, consider the cost of a Ford Mustang. Adjusted for inflation, a Mustang is more expensive today than it was at any time in the past. And, real world returns over that time will not have given you the power to purchase a Mustang with your mustang sized investment.
From Heinlein: "$100 placed at 7 percent interest compounded quarterly for 200 years will increase to more than $100,000,000 — by which time it will be worth nothing"
If you don't believe me, consider the cost of a Ford Mustang. Adjusted for inflation, a Mustang is more expensive today than it was at any time in the past. And, real world returns over that time will not have given you the power to purchase a Mustang with your mustang sized investment.
There is no denying the younger you start saving for the future the better.
I know lots of 'cash poor' folks in their 50's that did not seriously start thinking about their retirement until 10 years ago. The always complain and say they will be working till they die.
I know lots of 'cash poor' folks in their 50's that did not seriously start thinking about their retirement until 10 years ago. The always complain and say they will be working till they die.
Originally Posted By: Hallmark
Investors can be broadly identified as (1) misinformed/uninformed, intimidated folks who often depend entirely on investment advisors/brokers to direct their financial affairs or (2) self taught, well-informed, knowledgeable persons who have the interest and skills to successfully self-direct their investments.
It is frustrating to observe the former as they forfeit thousands of dollars of their earnings/savings over a lifetime paying fees, commissions, mutual fund loads, etc. If you have the interest & aptitude to self-direct your investment, my advice would be to do proceed following the advice of others above.
I agree entirely. If you're really that interested in the markets and you want to take control of your money, take the second approach. But first? Read. Read, read some more, stay up until 3 in the morning everynight for 6 months straight and learn how financial markets work, and keep a completely open mind. No dogmas, no preconceived notions of how you think the markets should be going. Buy charting software and learn it. Learn technical analysis, how to draw trendlines, how to do ratio analysis between various asset classes. Most important, learn money management principles. A wonderful gentlemen who runs the website swing-trading-stocks.com has a treasure trove of information on the subject. You don't have to buy individual stocks, but the principles still apply.
Once you start amassing questions, write them down in a notebook and start goggling them so you can amass knowledge of how to trade. With the internet and all the knowledge that is on it, there's never been a better time to be an active investor because all the information you could ever need is literally right at your fingertips. If you start young and get the foundation in your head, you'll be set for life.
Investors can be broadly identified as (1) misinformed/uninformed, intimidated folks who often depend entirely on investment advisors/brokers to direct their financial affairs or (2) self taught, well-informed, knowledgeable persons who have the interest and skills to successfully self-direct their investments.
It is frustrating to observe the former as they forfeit thousands of dollars of their earnings/savings over a lifetime paying fees, commissions, mutual fund loads, etc. If you have the interest & aptitude to self-direct your investment, my advice would be to do proceed following the advice of others above.
I agree entirely. If you're really that interested in the markets and you want to take control of your money, take the second approach. But first? Read. Read, read some more, stay up until 3 in the morning everynight for 6 months straight and learn how financial markets work, and keep a completely open mind. No dogmas, no preconceived notions of how you think the markets should be going. Buy charting software and learn it. Learn technical analysis, how to draw trendlines, how to do ratio analysis between various asset classes. Most important, learn money management principles. A wonderful gentlemen who runs the website swing-trading-stocks.com has a treasure trove of information on the subject. You don't have to buy individual stocks, but the principles still apply.
Once you start amassing questions, write them down in a notebook and start goggling them so you can amass knowledge of how to trade. With the internet and all the knowledge that is on it, there's never been a better time to be an active investor because all the information you could ever need is literally right at your fingertips. If you start young and get the foundation in your head, you'll be set for life.
Cars, adjusted for inflation, have actually dropped in price over the past few decades.
http://bp3.blogger.com/_otfwl2zc6Qc/SFTd8BuJdeI/AAAAAAAAE2o/4Ptb3RAsRK4/s1600-h/newcars.bmp
http://bp1.blogger.com/_otfwl2zc6Qc/SFUpAnVYGkI/AAAAAAAAE2w/ifahS8kTeAc/s1600-h/newcars2.bmp
Inflation adjusted prices of mostly consumer items, save for energy and food, have dropped in price dramatically. Computers? TVs, anything electronic? CHEAP.
http://bp3.blogger.com/_otfwl2zc6Qc/SFTd8BuJdeI/AAAAAAAAE2o/4Ptb3RAsRK4/s1600-h/newcars.bmp
http://bp1.blogger.com/_otfwl2zc6Qc/SFUpAnVYGkI/AAAAAAAAE2w/ifahS8kTeAc/s1600-h/newcars2.bmp
Inflation adjusted prices of mostly consumer items, save for energy and food, have dropped in price dramatically. Computers? TVs, anything electronic? CHEAP.
- Status
