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Hello new to the forums and was just wondering how I could build more wealth besides storing it in my banks savings account that has an interest rate that is little to nothing I currently do not have a Roth and my job currently does not offer any 401k plans. I did manage to save $10,000 so far since starting work back in October last year. I currently do not have any debt as I am 20 years old and save about $1,000 to $1,500 a month. I plan to have saved a total of $25,000 give or take by the end of this year if nothing gets in the way. I tried making money from other sources I did have success making $3,000 in about three months time when I was 13 years old however at that age I blew it pretty quickly now Adays I save every penny. These forums seem to have nice members who help each other and give great advice so I hope to gain some more knowledge in what I should be investing / saving in as I personally do not have any family besides my uncle who has retired age 37 and generates around $3,000 a month in pensions and other sources to get some financial advice from.
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Kennstro, welcome to SA. What type of work are you doing? I understand you're wanting to have your money work for you but it helps if we understand your long and short term goals for the money. Short term is spending desires in one to four years. Long term is more than five years. It's smart to also save for retirement, way in the future to capture tax benefits and compound so that you need less in contributions.
Have you filed Income Tax [2015 earnings]? If not, I suggest you run the numbers in something like Turbo Tax as IRS may owe you money.
The best advice I got when I started my 1st job was 'give every dollar a job.' You control your money and you decide how it will be used. You plan how many dollars to save and how much to spend on each of your categories like rent, food, utilities, clothes, entertainment and transportation for example. -
CapitalOne360 has 0.75% interest in a money market.
They also have 12-month CD at 1.3% or so.
others on here have found other online banks paying 1% I believe for a money market.
At 20, you have a whole lot of financial milestones ahead of you (cars, house, marriage/kids?). are you going to retire early like your uncle?
Hoard as much cash as you can.
Consider a ROTH IRA for retirement purposes now and contribute what you're comfortable with. I had started with 1800/year in my 20's.
More details you provide about your future plans, the more advice you can get from here.
Great job so far in saving!Comment
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Hello I don't plan on having kids in the foreseeable future as I'm still young and not in a hurry to pop out kids that I cannot financially support as far as marriage that's a slim chance as I don't care much for relationships. I don't blow my pay checks when I get them so I could put $1,000 up to $1,500 a month into a Roth if I choose to which I have to see with my federal credit union what their options are. I'm a huge gear head when it comes to cars but I also take into consideration that cars are a depreciating asset so I'm fine with driving something less than $10,000 that is reliable my future goals are saving for retirement as well as saving for a down payment on a home I understand your suppose to have like 20% down payment on a home houses over here are pretty cheap per sq ft. And I wish I could retire around the same age as my uncle but he gets a pension from being in the military and I believe a pension from the state but he was making well over six figures which let him retire and purchase his house early in lifeOriginally posted by Jluke View PostComment
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Hello I currently have no short term goals mainly all long terms such as retirement and a down payment on a home. My rent and utilities are pretty cheap as I pay a fixed income which helps me save more in the long run I hardly ever spend money on materialistic things I might spend maybe $60 a month on myself every few months I usually wait until there's sales or deals on what I want. I did file taxes and I owed about $300 due to not having medical which I'm currently browsing for some on the market place. I also do not have a car payment my phone bill is about $80 with 13% discount every month I'm on my sisters plan as I didn't have any credit when I got my phone.Originally posted by snafu View PostComment
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Kennstro, I feel certain you will reach your goals with the focus you describe. For the moment, I suggest reading The Automatic Millionaire or The Millionaire Next Door for an easily understood basic 'how to.' These are available from your library to download or from any on-line book re-seller.
While savings rates are particularly low just now, you may find electronic financial institutions offering a few ticks better. Becoming familiar with the rules for ROTH investment and being aware of fees and allowable holdings
is terrific to discuss.Comment
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Okay thank you and I hope to achieve them I understand it's better to start saving at a young age to maximize compound interest. It's just I feel like the rates are so low that there should be better options and I have a hobby in computers / web design and currently teaching myself about apps as I plan to invest $100 for a mobile game that can potentially make me money it's worth the investment because regardless of what happens I will gain experience in it and try again. Where can I find those online books at ? Also is it allowed to link to that capital 360 or whatever website ? I just don't want to go to a false site and I will probably look at some reviews the 12 month CDs for 1.3% seem like something I can do better than storing my money in my savings growing like 0.005% or something maybe lessOriginally posted by snafu View PostComment
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First, get your personal finances in order. Click on the link in my signature for help with that.Originally posted by Kennstro View Post
Once you feel you're ready to invest, read this:
seek knowledge, not answers
personal financeComment
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I think there are a whole lot of folks out there that would be perfectly content to stash their money in a 4% CD and just leave it alone, safe & sound. Unfortunately, those presently do not exist.
If you're not happy with the current CD and savings account interest rates (virtually nothing), then you have to put your money at risk to earn more. Anytime you do this, you could lose, just the same as you could earn, that's the chance you take.
Most folks that want to be pretty safe with their investments, but want a chance to earn a decent return put them in some type of professionally managed, blended stock fund, such as Vanguard accounts that you hear mentioned frequently on this forum.
If a little more risk doesn't bother you, the sky is the limit. Anything from individual stocks, to starting your own business, etc.Last edited by Fishindude77; 02-22-2016, 12:35 PM.Comment
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It sounds like you are off to a solid start in terms of finances at your age. Becoming more educated and putting a solid plan in place will position you nicely as you grow older.
I will echo someone's suggestion of reading a financial guidance book such as The Millionaire Next Door.
If I was in your position, I would start out by taking the following actions.
1) Put 6 months of living expenses into an online savings account, which should earn close to 1% interest. This will act as your emergency fund and should only be used for unexpected expenses life will inevitably throw your way.
2) Put 15% of your gross income into a Roth IRA account (up to $5500 per year). You should dollar cost average your investments, so plan on putting in about $450 per month. If you are looking for a hands off investment with low expenses, I recommend opening a Roth IRA account at Vanguard and investing in their Target Retirement 2060 Fund.
3) Put all excess savings into your online savings account. Build up these savings for a house down payment, car purchase, or any other big ticket items in the next 5 years.
Try to stay out of debt as much as possible, and when it comes to housing, buy something that is no more than 3 times your annual income. Good luck.Comment
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Being your age saving and accumulation is very important, i would concentrate on accumulation and a CD would work for me for liquidity. Once you build a nice amount then it can be used for producing some income, my favorite income producing asset is real estateretired in 2009 at the age of 39 with less than 300K total net worthComment
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My road to success was Stage1 accumulation, stage2 growth, stage3 preservationretired in 2009 at the age of 39 with less than 300K total net worthComment
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Could you possibly buy a house and get a roommate to pay part of the mortgage? How is your credit score?Comment
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books...half.com, electronic books from your local library
I suggest you try to figure out your risk ratio. You need to be able to sleep at night in spite of investments that rollercoaster up and then down. It takes around $ 3K to start an initial mutual fund investment program. You need to learn and understand fees which are often hidden but paid by you [investor] whether your are making a profit or taking a [paper] loss. Boggleheads offer terrific discussion.
The new project seems to have potential, learning Web Design moves you forward but doesn't it require an accredited program to give recognition?Comment
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