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Investment/savings advice for a young professional

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Nycnole
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Investment/savings advice for a young professional  Reply with quote  

Good morning, folks.

Stumbled across these boards as I was searching for some financial advice this morning before work. I'm eager to invest and set myself up for the future and would love any advice anyone might have to offer.

Here's where I currently stand: 24 years old living in New York City. Have a salary job and also work for my father's company on an as needed basis in the evenings. This provides me with a little extra leg room to invest within the cramped confines that are NYC living expenses.

I have my 401k set at 10% and I also opened an account with Betterment in January. And I pretty much put as much of each paycheck in that as possible. However, I'm still very young and hungry to learn.

What other investments should I be looking into? Betterment was a way for me to get my feet wet in the stock market, as I admittedly still don't know as much about it as I should.

Also, remember I live in NYC and I'm not exactly breaking the bank with my salary, so my available funds to invest are limited. It's a big reason why I'm planning my exit to a more affordable location in the near future.

Real estate has always piqued my interest, but I know I'm nowhere near financially capable to get into that field yet. I would also love to begin buying individual stocks as I learn more about the market.

So, in a nutshell, what are the best investments for a young, poor college grad like myself?
Thanks!
Post Thu Apr 09, 2015 12:05 pm
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oldguy
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quote:
Also, remember I live in NYC and I'm not exactly breaking the bank with my salary, so my available funds to invest are limited. It's a big reason why I'm planning my exit to a more affordable location in the near future.


True, the City is a tough place to prosper unless you have an income that is tied to NY - actor, etc. For wage earners, the ratio of salary-to-COL holds you back. But you are mostly confined to small living quarters & no grounds. NYC, Boston, San Fran, Seattle, LA, San Diego are the VeryHCOLs. And most towns in 'fly over' country have lower costs and way more space. In the Midwest, eg, there are 2000 sq foot near-new houses on 12,000 sq foot lots for $100,000.

quote:
I have my 401k set at 10% and I also opened an account with Betterment in January. And I pretty much put as much of each paycheck in that as possible.


The 'as much as possible" plan doesn't work. Also, the plan to "save what's left at month end" doesn't work. You have to reverse it - ie, invest first and then live on what's leftover. Think of it as the difference between "I'm going to try to lose weight" vs "I'm going to lose weight" - one works, one doesn't, lol. Betterment is a new brokerage, about 6 years since inception, so far, so good. The 'majors' in the business are Vanguard, Fidelity, etc - slightly lower costs, longer track record.

quote:
I would also love to begin buying individual stocks as I learn more about the market.
So, in a nutshell, what are the best investments for a young, poor college grad like myself?


The Market is an interesting dichotomy -extremely complex in theory, yet deceptively simple when reduced to practice. Traders buy derivatives, options, penny stocks, futures contracts, individual stocks, high-flyers, yada. Ironically, the holders of an SP500 Index for any 30-yr period have been the winners - and that includes the professional fund managers, only 15% of them 'beat' the SP500.

What was your major in college?
You are way ahead of most 24-yr-olds in that you are asking the right questions. You'll do very well - consider that the US Market average return is 11%/yr - $5000/yr invested at 11%/yr for 36 yr is $2,100,000. And also note that, at 1%/yr, it is only $217,000 - so the key is the "return", a wage earner cannot 'save' their way to wealth, you must invest to build wealth.
BTW, that "$5000 > $2.1M" is linear, ie, if you want $4.2M, invest $10k/yr. Very Happy
Post Thu Apr 09, 2015 3:53 pm
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Nycnole
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quote:
Originally posted by oldguy
quote:
Also, remember I live in NYC and I'm not exactly breaking the bank with my salary, so my available funds to invest are limited. It's a big reason why I'm planning my exit to a more affordable location in the near future.


True, the City is a tough place to prosper unless you have an income that is tied to NY - actor, etc. For wage earners, the ratio of salary-to-COL holds you back. But you are mostly confined to small living quarters & no grounds. NYC, Boston, San Fran, Seattle, LA, San Diego are the VeryHCOLs. And most towns in 'fly over' country have lower costs and way more space. In the Midwest, eg, there are 2000 sq foot near-new houses on 12,000 sq foot lots for $100,000.

quote:
I have my 401k set at 10% and I also opened an account with Betterment in January. And I pretty much put as much of each paycheck in that as possible.


The 'as much as possible" plan doesn't work. Also, the plan to "save what's left at month end" doesn't work. You have to reverse it - ie, invest first and then live on what's leftover. Think of it as the difference between "I'm going to try to lose weight" vs "I'm going to lose weight" - one works, one doesn't, lol. Betterment is a new brokerage, about 6 years since inception, so far, so good. The 'majors' in the business are Vanguard, Fidelity, etc - slightly lower costs, longer track record.

quote:
I would also love to begin buying individual stocks as I learn more about the market.
So, in a nutshell, what are the best investments for a young, poor college grad like myself?


The Market is an interesting dichotomy -extremely complex in theory, yet deceptively simple when reduced to practice. Traders buy derivatives, options, penny stocks, futures contracts, individual stocks, high-flyers, yada. Ironically, the holders of an SP500 Index for any 30-yr period have been the winners - and that includes the professional fund managers, only 15% of them 'beat' the SP500.

What was your major in college?
You are way ahead of most 24-yr-olds in that you are asking the right questions. You'll do very well - consider that the US Market average return is 11%/yr - $5000/yr invested at 11%/yr for 36 yr is $2,100,000. And also note that, at 1%/yr, it is only $217,000 - so the key is the "return", a wage earner cannot 'save' their way to wealth, you must invest to build wealth.
BTW, that "$5000 > $2.1M" is linear, ie, if you want $4.2M, invest $10k/yr. Very Happy


Thanks for the advice. I guess I wasn't too clear when I referred to my savings habits. When I say as much as possible, I calculate my COL each month and from there I estimate the least amount I need left over for entertainment and all that. But the first thing I do with my checks is invest. Which also is extra difficult in this city, as I often have to pass up on nights out with friends. Most of my friends don't really seem to understand the concept of saving, so I catch a lot of crap for it. Oh well.

I double majored in Sport Management and English. Not exactly a recipe for finding a high salary position. I would like to work for myself anyways, I'm just in the process of figuring out how to do so.
Post Thu Apr 09, 2015 4:43 pm
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oldguy
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quote:
I would like to work for myself anyways, I'm just in the process of figuring out how to do so.


I've been hearing that for 60 years, "the only way to wealth is to own a business, be my own boss, don't work for the Man". lol - but look at the outcomes, the opposite is true. Only about 15% of start-ups succeed, the other 85% fail and end in debt". Meanwhile, people like me, who worked for the Man, become wealthy. As I showed earlier, $5000/yr = $2.1M - most anyone with a steady job can do that, most couples can double it to $4.2M. And the probable outcome is success.

What degree are you using in your current job - sports mmt or english? And is your english for teaching? Or for writing? (Before I retired the co I worked for had lots of writers, some were in the $100,000 range.)
Post Thu Apr 09, 2015 9:00 pm
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Nycnole
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quote:
Originally posted by oldguy
quote:
I would like to work for myself anyways, I'm just in the process of figuring out how to do so.


I've been hearing that for 60 years, "the only way to wealth is to own a business, be my own boss, don't work for the Man". lol - but look at the outcomes, the opposite is true. Only about 15% of start-ups succeed, the other 85% fail and end in debt". Meanwhile, people like me, who worked for the Man, become wealthy. As I showed earlier, $5000/yr = $2.1M - most anyone with a steady job can do that, most couples can double it to $4.2M. And the probable outcome is success.

What degree are you using in your current job - sports mmt or english? And is your english for teaching? Or for writing? (Before I retired the co I worked for had lots of writers, some were in the $100,000 range.)


Neither. I'm currently in sales. Ended up taking this job because I was having a hard time finding a career in my field. My English degree has an emphasis in editing, writing and media. In college, I covered Florida State athletics and I've done various freelance work. Before this job, I worked for an NFL franchise as a "freelance writer" but was more of a glorified intern than anything else and got paid $10/hour.

That is the field I would like to get back into, but it's tough to find something, especially something that pays decent.
Post Thu Apr 09, 2015 11:04 pm
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oldguy
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quote:
has an emphasis in editing, writing and media.


I was an engineer with a Defense Contractor - space flight (Apollo), missiles, smart bombs, etc. When we got a Request For Proposal from the Pentagon, from the Air Force, NASA, another prime contractor, etc - we designed a product concept that fit into the available space/shape, worked with the available electrical power, met the high/low temp specs, operated in the vacuum of space, functioned at missile launch/boost acceleration levels, and so on. We made sketches, dimensions, wrote the narrative about how we would meet each and every requirement.

A tech writer team worked with us, made multiple books - design, cost, manufacturing plans. A Book Boss and a few tech writers were assigned to each book, they arranged, edited, broke the narrative into 1/3 or 1/2 page chunks, had extra illustrations made to explain the text & math. They often came back to engineering with wordsmithing questions to enhance the 'understandability' of our sentences.
Various steps - some jobs required 'story boarding' sessions on the walls of a WarRoom, locked doors, no phones).

The tech writers, editors , graphics designer jobs paid well, in today's wages probably $60k starting, $120k for Book Bosses. List of Defense Contractors - http://en.wikipedia.org/wiki/List_of_United_States_defense_contractors
There are 100s and some in every state (including AK) so you can look in your desired region. Very Happy
Post Fri Apr 10, 2015 2:00 am
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pooja.lily
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You guyz are so amazing! I m a newbie and I love your lifestyle ideas and investment and saving tricks
Good going
Keep updating


Thanks!
Post Thu Apr 30, 2015 6:00 am
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edward222
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quote:
Originally posted by pooja.lily
You guyz are so amazing! I m a newbie and I love your lifestyle ideas and investment and saving tricks
Good going
Keep updating


Thanks!


If you want a really great advice,
oldguy is the real deal Smile
Post Thu Apr 30, 2015 6:46 am
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