Am I over-investing?

**A-Aron1** · 10-07-2014, 07:29 PM

And I meant to post this in the investing section. Sorry!

**UDRogue** · 10-07-2014, 08:30 PM

Originally posted by A-Aron1 View Post

Should I scale back on the investing in order to put more liquid cash in the bank. I've got a beater car that I may need to upgrade in the next year or so and am wanting to purchase a home in the next 1-2 years.

I'm almost 60 and if I could go back and be 24 again, I'd keep putting it in the investments like you're doing. You will be a multi millionaire when you're my age and you will be glad of it.

I'd keep driving beater cars and when you buy a house, make it a modest one, and keep putting the money in the accounts.

**97guns** · 10-08-2014, 04:37 AM

i like liquidity especially at your age, i dont care to have a plan tell me when i can spend my money, 59 1/2 is a long ways away

**feh** · 10-08-2014, 05:25 AM

The road to financial independence is not complicated - live below your means and save, save, save.

There's a lot of grey area there - only you can decide what's reasonable to spend on cars and when/if to buy a house.

**bjl584** · 10-08-2014, 05:47 AM

You can never save enough. Just don't forget to live a little. You'll have to figure out how to balance things.

**A-Aron1** · 10-08-2014, 03:41 PM

I appreciate all the advice. I guess just finding a good balance between saving/spending/investing is key!

**Petunia 100** · 10-08-2014, 06:11 PM

Originally posted by A-Aron1 View Post

I appreciate all the advice. I guess just finding a good balance between saving/spending/investing is key!

Keep saving/investing aggressively, and you may find yourself in 15 or 20 years in the wonderful position of no longer needing to work for a living.

**kork13** · 10-09-2014, 06:08 AM

I'll just echo the others to say that you're doing great. If you are comfortable with your lifestyle while still saving life this, keep doing it. I'm 28 y/o, and have been saving/investing similarly to what you're doing since I was 20. Trust me, having a healthy savings habit will give you a level of financial security that is extremely reassuring. It will prevent a whole host of future concerns, stress, and anxiety. Bottom line: KEEP IT UP!

**Weird Tolkienish Figure** · 10-09-2014, 06:16 AM

Originally posted by A-Aron1 View Post

Hello everyone,

First time poster here. I've really enjoyed reading through the forum over the past few weeks. I'm a younger guy and most of my friends don't sit around talking about investing/financial advice so I thought I would ask my question on here. I'm 24 years old and am blessed to have had family/teachers that bounded into my brain early on the power of compound interest and the advantages to starting out early.

My question is....am I tying too much money into long-term investments based on my life stage? I've been out of school for a couple years now and have been saving like crazy and don't have any debt as well as about 33k in my checking account. Some of that is earmarked for a down-payment on a house and some for an emergency fund.

I currently put about 7% of my income in my Roth IRA (before company match), $5500/year in a Roth IRA, and $5200/year in mutual funds in my brokerage account.

Should I scale back on the investing in order to put more liquid cash in the bank. I've got a beater car that I may need to upgrade in the next year or so and am wanting to purchase a home in the next 1-2 years.

Any advise would be appreciated! I don't know if it is relevant but I make about 75k/year (work on commission and it fluctuates).

The question you should ask is, why do you need our vindication for whether you are over-investing or not? People are individuals with individual goals and values. Life isn't a race to see who can invest the most money.

If you're happy with investing that much, go for it.

**bigdaddybus** · 10-09-2014, 08:45 AM

Looks like you save 13.6% of your income for retirement (5250+5000)/75000. And you invest 6.9% of your income. (5200/75000)

I have read that without a pension, you need to save 15-20% for a retirement greater than or equal to your pre-retirement lifestyle. I suggest you up your retirement savings to 15%, and invest/save as much as you can.

I save/invest in the 35-40% range, but my wife and I are 40 in our peak earning years. I was doing nowhere near as good as you are at 24. nice work!

**JasonSimms** · 10-13-2014, 01:09 PM

Yes, the key is to balance your earning, savings and expenditure! And the best way to utilize your saved money is to make meaningful, timely investments. However, it hardly matters where you invest money. It can be simply anything or any industry as long as you know you are capable of tacking problems that are likely to show up. That means all it takes to make an investment successful is a thorough planning and utilization of all available resources in the right direction!

**Mojave** · 10-15-2014, 04:24 PM

Save every penny you can.

One of the smartest things my wife and I did from ages 24-31 was max out our 401ks and Roths. We also saved a lot in taxable accounts during that time. My wife left the work force when our first child was born, so we haven't been able to save as much the last several years, but our retirement accounts are doing GREAT because of the sacrifices we made in our 20s. At 37 years old, we could probably stop contributing right now (but we won't) and still be OK to retire at 60. That is an amazing feeling.

If you play your cards right, you can set up the rest of your life by what you do over the next 10 years. I wish that would resonate more with young people.

**jIM_Ohio** · 10-15-2014, 07:31 PM

Originally posted by A-Aron1 View Post

Hello everyone,

First time poster here. I've really enjoyed reading through the forum over the past few weeks. I'm a younger guy and most of my friends don't sit around talking about investing/financial advice so I thought I would ask my question on here. I'm 24 years old and am blessed to have had family/teachers that bounded into my brain early on the power of compound interest and the advantages to starting out early.

My question is....am I tying too much money into long-term investments based on my life stage? I've been out of school for a couple years now and have been saving like crazy and don't have any debt as well as about 33k in my checking account. Some of that is earmarked for a down-payment on a house and some for an emergency fund.

I currently put about 7% of my income in my Roth IRA (before company match), $5500/year in a Roth IRA, and $5200/year in mutual funds in my brokerage account.

Should I scale back on the investing in order to put more liquid cash in the bank. I've got a beater car that I may need to upgrade in the next year or so and am wanting to purchase a home in the next 1-2 years.

Any advise would be appreciated! I don't know if it is relevant but I make about 75k/year (work on commission and it fluctuates).

You cannot overinvest

you might be able to make optimized decisions, but absolute numbers mean little. I invest $25k plus per year, when I tell you that is 25% of my income, and you should focus on percentages, not the amounts. Here is what I mean- the IRS allows you to save $5500 into a Roth (7% of your income), and another 7% into a brokerage account (which is 14% savings rate).

I would shoot to keep savings rate at 25%, not focus on $5500 here, $5200 there... if you analyze by percentages, you will learn a lot more about taxes and investing and asset location,

**GeorgetteSpurling** · 10-30-2014, 04:23 AM

There is no disadvantage of saving money in early age, but if you want to invest your money, then make sure you are doing it in the right way because you are too young to get right decision, take expert advice for the right investment.

Am I over-investing?