Another Investment Question- 22 YO

[175gr7.62]

Ok, I have some questions about how to get started in this whole investment thing. I'll start with my background.

I graduated college in May od 17. I'm getting married in April of this year, and she is currently still in school. She will graduate In May of 19 with a Bachelors in Nursing. I'm a contracted sales territory manager, so commission only and technically self-employed. I'm currently trying to decide how to start the saving process. Currently, I just have a work checking account, a personal account, and a few hundred dollars in stocks (more playing then investing).!

Here is your first problem......

[BTGuard]

Here is your first problem......

The plan is for her to make the big bucks and fund all my hobbies

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[Rush2Judge]

I'm with Throwin' Darts. That's how we set my son up when he got some money from internships. Super easy to do.

Sounds like you are on the right track. 1) pay off high interest debts, 2) build some liquid emergency savings, 3) liquid investment account (Vanguard Index), 4) retirement account (Vanguard IRA).

In my opinion 1) and 2) have to be taken care of first. Then you have some leeway with 3) and 4). Getting started on retirement is very important but I like to use 3) for big ticket purchase (house down payment, new car, other investments like land or rental property).

[Thorcules]

Read and/or listen to the audiobook "RICH DAD POOR DAD". If you truly listen to hm it can change your life.

[Ryan-in-SA1]

Live below your means. Spend much less than you earn. Invest the rest in Index Funds unless you can really understand a balance sheet and cash flow statement (most can't and that's OK) in which case buy individual stocks when the price dips below value. Don't buy Mutual Funds, they charge you a bunch of money and underperform the S&P. BUY S&P INDEX FUNDS/ETFS. Compound interest will do some serious WORK for you over time. Just keep saving.

Be careful with debt. It can be useful, but paying interest is a killer.

Also, if you want to learn how to understand a balance sheet and cash flow statement and identify an undervalued company, I suggest "The Intelligent Investor" by Benjamin Graham; it's a classic, but very very worthwhile (this is the person, and the book, that Warren Buffett credits with much of his success).

Also recommend you check out Mr. Money Mustache (blog). Bottom line is LIVE BELOW YOUR MEANS.

[whitetailtrail]

I am in a similar situation, I am 22 and getting married in June. I have worked full time through school and now have a salaried position and one year left to graduate.

1) Any CC debt should be paid off immediately.

2) With a relatively low interest rate I say keep the car loan and build an emergency fund instead

3) Create a budget in Excel and work like heck to stick to it. Best thing I ever did. Ive been a strict budget person since I was 18 and it has served me well. Tell your money where to go instead of wondering where it went.

4) Once that is finished, instead of throwing extra money at the low interest car loan open a Roth IRA at Fidelity, contribute with each pay period. You can either build up to roughly $2500 (Fidelity usual minimum to invest in a mutual fund) and fund a total market index mutual fund or you can acquire similar index tracking ETFs and contribute per share and manage the allocation yourself. (This is what I’m doing but in a taxable account). Fidelity allows you to buy shares of IShares ETFs commission free. A lazy 3 fund portfolio should start you off okay. ITOT(total market), IXUS(international)and AGG(US bonds) or something similar. Some people like growth funds in a tax sheltered account.

5) Have fun! Getting your finances together can be rewarding and exciting. Don’t forget to enjoy some of that money as well




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[TxAg]

I posted a thread about personal finance a while back that hits a bunch of your questions. Check it out if you're interested

http://discussions.texasbowhunter.com/forums/showthread.php?t=515163

I'd suggest opening your Roth IRA at Vanguard or Fidelity and investing it in a low cost index fund. At Vanguard you could look at the Total Stock Market Index or you could keep it super simple and simply and buy a target retirement fund with the target date closest to your retirement date. You open the account online, link it to your checking account and transfer money, and then buy the investment that you want. Captial One will have higher fees than both Vanguard and Fidelity and most likely less investment choices. Be wary of advisors that will come along and say they can beat the indexes after fund fees, their fees, and taxes because time and again its been proven that they can't over the long term.

Best advice you're gona get

[BTGuard]

I posted a thread about personal finance a while back that hits a bunch of your questions. Check it out if you're interested

http://discussions.texasbowhunter.com/forums/showthread.php?t=515163

I'd suggest opening your Roth IRA at Vanguard or Fidelity and investing it in a low cost index fund. At Vanguard you could look at the Total Stock Market Index or you could keep it super simple and simply and buy a target retirement fund with the target date closest to your retirement date. You open the account online, link it to your checking account and transfer money, and then buy the investment that you want. Captial One will have higher fees than both Vanguard and Fidelity and most likely less investment choices. Be wary of advisors that will come along and say they can beat the indexes after fund fees, their fees, and taxes because time and again its been proven that they can't over the long term.

Thanks for the link. I'll check it out.

Live below your means. Spend much less than you earn. Invest the rest in Index Funds unless you can really understand a balance sheet and cash flow statement (most can't and that's OK) in which case buy individual stocks when the price dips below value. Don't buy Mutual Funds, they charge you a bunch of money and underperform the S&P. BUY S&P INDEX FUNDS/ETFS. Compound interest will do some serious WORK for you over time. Just keep saving.

Be careful with debt. It can be useful, but paying interest is a killer.

Also, if you want to learn how to understand a balance sheet and cash flow statement and identify an undervalued company, I suggest "The Intelligent Investor" by Benjamin Graham; it's a classic, but very very worthwhile (this is the person, and the book, that Warren Buffett credits with much of his success).

Also recommend you check out Mr. Money Mustache (blog). Bottom line is LIVE BELOW YOUR MEANS.

Thanks for the tips. I'll have to check that out. Honestly I don't have much desire to really actively manage everything. I know I may lose some in the long run, but to me not having to worry about it as much is worth it.

I am in a similar situation, I am 22 and getting married in June. I have worked full time through school and now have a salaried position and one year left to graduate.

1) Any CC debt should be paid off immediately.

2) With a relatively low interest rate I say keep the car loan and build an emergency fund instead

3) Create a budget in Excel and work like heck to stick to it. Best thing I ever did. Ive been a strict budget person since I was 18 and it has served me well. Tell your money where to go instead of wondering where it went.

4) Once that is finished, instead of throwing extra money at the low interest car loan open a Roth IRA at Fidelity, contribute with each pay period. You can either build up to roughly $2500 (Fidelity usual minimum to invest in a mutual fund) and fund a total market index mutual fund or you can acquire similar index tracking ETFs and contribute per share and manage the allocation yourself. (This is what I’m doing but in a taxable account). Fidelity allows you to buy shares of IShares ETFs commission free. A lazy 3 fund portfolio should start you off okay. ITOT(total market), IXUS(international)and AGG(US bonds) or something similar. Some people like growth funds in a tax sheltered account.

5) Have fun! Getting your finances together can be rewarding and exciting. Don’t forget to enjoy some of that money as well




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Thanks for the insight. It's nice to hear from someone in a similar position. I went ahead and started a wealthfront account. It seemed like if nothing else it was a good way to get started, and they manage the first 10k for free. Should let me know if it's something I want to stick with. I set my risk fairly high, so currently I am set at 35% us stocks, 25% foreign stocks, 19% emerging markets, 10% dividend growth stocks, and teh rest split between natural resources and municipal bonds. I figure I'll give it a shot and see what I think.

Thanks for all the help guys

[Txhuntr2]

I would suggest putting a decent amount into savings so that you could pay all of your bills for some period of time if you lost your job. Find your own comfort zone here. Then, check out index funds at Vanguard.

[Txhuntr2]

I posted a thread about personal finance a while back that hits a bunch of your questions. Check it out if you're interested

http://discussions.texasbowhunter.com/forums/showthread.php?t=515163

I'd suggest opening your Roth IRA at Vanguard or Fidelity and investing it in a low cost index fund. At Vanguard you could look at the Total Stock Market Index or you could keep it super simple and simply and buy a target retirement fund with the target date closest to your retirement date. You open the account online, link it to your checking account and transfer money, and then buy the investment that you want. Captial One will have higher fees than both Vanguard and Fidelity and most likely less investment choices. Be wary of advisors that will come along and say they can beat the indexes after fund fees, their fees, and taxes because time and again its been proven that they can't over the long term.

Beat me to it.