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I'm a single 38 yo female needing financial advice

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money7
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Joined: 27 Mar 2015

I'm a single 38 yo female needing financial advice  Reply with quote  

Thank you in advance.

I admit to having been negligent with personal finance over the years and I hope it's not too late.

The below are some facts about me:

1. Single, 38 yo female.
2. Live in Manhattan, $1500/month rent including utilities.
3. Make 60K/year + 15-20K freelancing.
4. 9K in savings.
5. 20K on IRA.
6. 4K credit card debt which i can easily pay in 3 months. I just opened a balance transfer so I'm not paying any interest in 16 more months.
7. The 4K credit card debt is mostly for an online business venture which will be operational in a few weeks.
8. Monthly maintenance: Food ($250), Gym ($100), Health Insurance ($310), Miscellaneous ($400)
9. No other obligations.

How do I become financially independent one day? Also, do I invest in stock all of my 20K IRA contributions? All 20K is with Chase bank.

Appreciate your help.
Post Fri Mar 27, 2015 6:25 am
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oldguy
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Location: arizona
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NYC - I s'pose the $1500/m is your half of an apt?
And I s'pose that you don't own a car?

If that's the case - yeah, you can build wealth on $75k/yr, even in a HCOL area. (Not needing a car is huge, most folks do not realize that they spend about $8000/yr on a car, that's "$8000 net", they have to earn an extra $10,000/yr gross.)

Two scenarios -
1. If you keep your $20k +$5k/yr in a 1% saving account, it will be $175,000 at age 65.
2. If you keep your $20k +$5k/yr in an 11% fund, it will be $1,045,000 at age 65.

So that shows you the key metric is - ie, the rate of return.
I would move the $20k IRA from Chase to a no-load fund company such as Vanguard or Fidelity, and invest the money in a SP500 Index Fund.

Here's a site that gives you the history -
http://politicalcalculations.blogspot.com/2006/12/sp-500-at-your-fingertips.html#.VRWmIOHmeUl

The SP500 average return for the most recent 30 yrs was 11.2%/yr. That's typical, check a few 30 yr-blocks to see. Stocks are a longterm commitment - they might go down 40% one yr, up 50% the next - but over 30 yrs, the ups/downs statistically average and converge on about 11%/yr.

If your IRA is a TradIRA it is serving you well from a tax standpoint, probably saving you $2000 or $3000/yr in Fed, NY, and NYC taxes. But if the IRA is a Roth you may want to switch to a Trad.
Post Fri Mar 27, 2015 6:55 pm
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annelious450
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Joined: 16 Mar 2015
Location: United states
Re: I'm a single 38 yo female needing financial advice  Reply with quote  

quote:
Originally posted by money7
Thank you in advance.

I admit to having been negligent with personal finance over the years and I hope it's not too late.

The below are some facts about me:

1. Single, 38 yo female.
2. Live in Manhattan, $1500/month rent including utilities.
3. Make 60K/year + 15-20K freelancing.
4. 9K in savings.
5. 20K on IRA.
6. 4K credit card debt which i can easily pay in 3 months. I just opened a balance transfer so I'm not paying any interest in 16 more months.
7. The 4K credit card debt is mostly for an online business venture which will be operational in a few weeks.
8. Monthly maintenance: Food ($250), Gym ($100), Health Insurance ($310), Miscellaneous ($400)
9. No other obligations.

How do I become financially independent one day? Also, do I invest in stock all of my 20K IRA contributions? All 20K is with Chase bank.

Appreciate your help.


If you want hassle free and high profitable business invest in buying ready-made websites.
Post Sat Mar 28, 2015 4:32 am
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GardenCat
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Location: Colorado
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With some respect, Forget the second posting.

Follow OodGuy's advice.

You have time on your side to do the slow but steady ride that can lead you to significant resources in 30 years!!!
Post Sat Mar 28, 2015 11:20 pm
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littleroc02us
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I can't believe twice in one day I'm going to suggest following Old Guy's advice on this one. Being 38 still gives you 30 more years to use the power of compounding. I'd suggest investing the 20k in a no load company like Vanguard in something like VTSMX which is an index fund that follows a broad sense of the market and has returned an average of 16%. Historically it has returned around 9%.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Mon Mar 30, 2015 3:03 pm
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edward222
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Location: USA
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You have a good monthly income,
not expensive life style,
no obligations,

hhhhhmmmm, invest your money into mutual fund,
in the age of 45 you can actually achieve financial freedom.
Post Mon Apr 06, 2015 10:37 am
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vishal07
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Location: mumbai
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Post Wed Apr 08, 2015 9:34 am
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perkinsilas
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The way of investment mode which you planning was looking good. But first of all you can get a basic idea about the most happing things regarding these kind of field and you can take the decision you have to invest in mutual funds or any other insurance related investments.



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Post Sat Apr 11, 2015 6:15 am
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vishal07
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Post Sat Apr 11, 2015 7:34 am
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JackClark
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What you consider yourself to be is a perception. It's not backed up by numbers. You are well above middle class (even by SEA COL) even if you don't feel that way. I think you are being thrown off by all the other well-off people living in our community.

http://trantr.com/category/finance
Post Fri Apr 17, 2015 10:21 am
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GardenCat
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Hi Money7

A little delayed reply to your original post but...

In general, and as with almost anything posted over the internet...

BE WARY of offers, deals, advice from those that do not know how to spell or understand basic use of grammar. Seems there are many posts lately on this forum that are trying to sell "whatever" to the unaware.

Oldguy and Wino are astute and generous with their advice and have nothing to gain.
Post Fri Apr 17, 2015 3:50 pm
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Offshore-Wealth.com
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Invest in yourself, you mentioned you are starting a business venture, so put your time and effort, as well as money into yourself. Nothing is better than starting and succeeding in your own business, but it takes time and effort, so don't give up, and forget about investing your money where you can barely get 2% interest.

Success to all,

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Post Fri Apr 17, 2015 8:49 pm
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