What can I be doing with my money while I'm young so I can have an even easier future?

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    Feb 28, 2014 3:02 AM GMT
    Okay, here's the deal. I've saved up a great bit in this past year and it's paid off. My bank account finally is looking good, my savings account is at $1,000, and I have money going into a 401k (have been for the past 3 years... 6% of my income).

    I've been budgeting hard, selling unwanted things, and playing smart. I have about 1.5 years left of college until I have my B.S. in Technology Management, and will graduate with very little to no debt. My credit is poor and not too established (yet), but I'm getting a credit card from my bank soon and will be able to raise it. I'm also about to pay off my 2nd loan and haven't missed one payment on either of them. I have all my medical bills paid, and have absolutely ZERO debt at this very moment.

    What are some things I should be doing right now so I have an easier future when I move (I'm planning on moving across the U.S. soon) and so that I won't constantly be struggling through life financially
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    Feb 28, 2014 3:08 AM GMT
    rule #1: don't loose any
    rule #2: never listen to a friggin broker (they want your money, they could give a crap about you)
    rule #3: never buy a new car (especially with credit)
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    Feb 28, 2014 3:11 AM GMT
    Hookers and cocaine.
    Oh, sorry, that's me.
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    Feb 28, 2014 3:12 AM GMT
    somersault saidrule #1: don't loose any
    rule #2: never listen to a friggin broker
    rule #3: never buy a new car (especially with credit)


    Got it!
    Never.
    Just bought an extremely nice (used) car recently and sold my old one. I ended up making a 300 profit from selling my old one and bought an even better, reliable, car (2004 Alero Oldsmobile with 100,000 miles on it)
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    Feb 28, 2014 3:12 AM GMT
    Sharka_Khan saidHookers and cocaine.


    It just gets so old after a while. icon_lol.gif
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    Feb 28, 2014 3:19 AM GMT
    Broseph saidIf you get some excess cash, you could start investing it in other products than the 401k. The general advice is that when you are young you should go for more risk/return and to get more conservative as you get older, but I don't know which products would be optimal for you. I'd do some Googling or maybe even see a financial consultant (if you do get the excess cash). Or maybe someone here is an expert on this...


    financial consultants (and stock brokers) are pretty much bullshit and work on commission. the vast majority of people lose money on stocks
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    Feb 28, 2014 3:29 AM GMT
    kiwiLifter saidThis guy and his family escaped the debt trap and became financially independent by living modestly while on average to good incomes but avoiding new cars, big mortgage and steadily investing in indexed funds.

    He does case studies for various circumstances people contact him with:

    http://www.mrmoneymustache.com/2014/02/23/reader-case-study-going-west-for-early-retirement/


    This looks really solid. I consider myself frugal and I went from homeless at age 18-19 to doing well financially now. Thanks for the link, Kiwi!
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    Feb 28, 2014 3:37 AM GMT
    pellaz said
    JumpMan_Josh said ... I have my B.S. in Technology Management ...
    as a geek you might work 2-10years at each employ so your going to move around some. Pick a larger city with several stable employers. you will have to endure a higher cost of living to live this way.

    A house is is still a good investment, right now rents are twice the monthly cost of a mortgage. Just make sure something livable is totally paid off in the end.

    As you approach the end of your career buy a small low tech business. Run it with employees, put your husband in charge whatever. You plan to retire into that business.

    bump up you skills so you can take care of the house, cars to some degree or have your husband do this. Better to have 2or3 un reliable cars than one moderate one.

    -never ever conduct business illegal
    -never wind up owing taxes, calculate this every year.
    -you can accomplish more with a good husband, make a bad choice and your phucked.
    -various mutual funds, let the experts invest
    -get a husband employed in a another line of work




    Okay... so I'm really going to need a husband from the sounds of it! Honestly, I think doing that is going to be the most difficult task in my life icon_lol.gif
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    Feb 28, 2014 3:41 AM GMT
    ^^

    mutual funds are mostly crap, most don't even match the S&P500 (unless you just luck out), if you go stocks, go with an index fund like the Dow or the S&P500

    don't even think about stocks until you have $5000 in cash in a money market account (other than a retirement acct)
  • equus77

    Posts: 55

    Feb 28, 2014 3:56 AM GMT
    Work on establishing a cash reserve. A typical number is 3-6 months of expenses.

    It's great that you don't have any debt at this point. If you have an unexpected expense, having money in savings can really help vs. trying to put it on a credit card then going back in to debt.

    If you do decide to invest in the stock market, outside of your 401k, invest the same amount each month rather than investing a lump sum at one point in time. It's a strategy known as dollar cost averaging.

    I worked for a few years as a financial planner but am not any longer. If you want more info, feel free to pm me.
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    Feb 28, 2014 4:02 AM GMT
    ^^

    yup this guys knows about all the scams and "skimming" (when they take 2-5% of your cash EVERY year for doing shit.
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    Feb 28, 2014 4:22 AM GMT
    somersault said^^
    mutual funds are mostly crap, most don't even match the S&P500 (unless you just luck out), if you go stocks, go with an index fund like the Dow or the S&P500

    don't even think about stocks until you have $5000 in cash in a money market account (other than a retirement acct)

    Not always true and if you invest in a mutual fund that mirrors the S&P500 or another index fund (ie: Russell 5000, etc) it should have a pretty close return.

    I highly recommend a NO LOAD, must be no load, index fund. Invest a small amount regularly (dollar cost averaging) rather than trying to time the low points in the market. Low expenses and diversification. Some you can open with $100 or so and then add to it. They invest in the stock market and so as the market goes up, so does your investment. Because it's spreading the money over various sectors and companies within each sector, your risk in a large or sudden drop is minimized.

    Keep adding and it will grow nicely. Eventually you could then try some stocks on your own but never more than 5% of your total portfolio in any single stock and ensure you're keeping your portfolio diversified in many sectors of the market (ie: tech, pharmaceuticals, retail, housing, etc).

    Good to plan and great that you're investing in your 401K, you'll be so glad down the road. Mine is looking rather sweet these days.
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    Feb 28, 2014 4:37 AM GMT
    ^^

    I was talking about "financial planners" (paid sales people who put you in 3-5% loaded funds AND THEN skim 2-5% EVERY year)

    my dad said never do stocks until you have 4-6 months living expenses in cash in a money market account
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    Feb 28, 2014 4:46 AM GMT
    Many financial planners are moving to a fee-based payment rather than commission, exactly because they were losing business. People resented them taking a percentage of funds under management each year; in a bad market it wipes out your gains.

    Indexes are like mutual funds, in the sense that they are essentially a market basket of whatever the index is based on, and instead of placing an individual bet (or paying high mutual fund fees), you're placing a bet on the movement of the market. Movement either way, by the way, since indexes can be shorted, especially by using put options on indexes, which are available on commodities markets (the New York Merc, I think, though there have been so many exchange mergers since I was in the business that I can't be sure).

    Note: options should only be purchased with money you can afford to lose, since you can lose it. However, it also leverages your money several times more than other investments when your prediction is correct. Plus there are a number of hedging strategies that can keep you from losing everything even when things don't go as you hope.

    Research always before investing. If you want more information, send me a message here or on FB. I used to trade these instruments on the floor of the stock exchange in New York.
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    Feb 28, 2014 4:47 AM GMT
    OK, I see lots of good advice on here already, but let me share one more. I've heard many, many financial experts say ROTH IRA is the best thing to ever happen and it's too good to be true.

    The earlier you start on it, the better. You'll give your ROTH IRA investment plenty of time to grow, and the best part is it's tax-free!
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    Feb 28, 2014 5:19 AM GMT
    Build a time machine, go back to 2011 and purchase a shit load of Bitcoins for a few dollars, then cash out in November 2013 when a Bitcoin peaks at $1300, just before the BTC market rollercoaster-volatility-ride, that immediately follows thereafter.

    Hope that helps :]
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    Feb 28, 2014 5:21 AM GMT
    _SAGE_ saidBuild a time machine, go back to 2011 and purchase a shit load of Bitcoins for a few dollars, then cash out in November 2013 when a Bitcoin peaks at $1300, just before the BTC market rollercoaster ride volity that immediately follows thereafter.

    Hope that helps :]


    :]
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    Feb 28, 2014 7:18 AM GMT
    Josh....the last sentence of your original post states your goal but it's a bit ambiguous. The way I'm reading it sounds like you want to make sure you have enough money to move AND you want to make sure you have enough financial resources after you move. Either way, it sounds more short term than a long term goal.

    What am I missing or not understanding from your post?
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    Feb 28, 2014 7:58 AM GMT
    somersault said
    Broseph saidIf you get some excess cash, you could start investing it in other products than the 401k. The general advice is that when you are young you should go for more risk/return and to get more conservative as you get older, but I don't know which products would be optimal for you. I'd do some Googling or maybe even see a financial consultant (if you do get the excess cash). Or maybe someone here is an expert on this...


    financial consultants (and stock brokers) are pretty much bullshit and work on commission. the vast majority of people lose money on stocks


    88% of short term traders lose money (mostly to the other 12%).

    Most funds underperform the index, but there is a good reason for this. So much money is controlled by funds that they basically control the indices. It is important to not be out of the market during sustained boom periods e.g. 2003-2008.

    To answer your question though, the best return you can get at your age is to invest in learning about a vocational skill which is somewhat difficult and people think is boring: for example, computer programming, being an electrician/plumber, something like that.
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    Feb 28, 2014 9:56 AM GMT
    JumpMan_Josh said
    pellaz said
    JumpMan_Josh said ... I have my B.S. in Technology Management ...
    as a geek you might work 2-10years at each employ so your going to move around some. Pick a larger city with several stable employers. you will have to endure a higher cost of living to live this way.

    A house is is still a good investment, right now rents are twice the monthly cost of a mortgage. Just make sure something livable is totally paid off in the end.

    As you approach the end of your career buy a small low tech business. Run it with employees, put your husband in charge whatever. You plan to retire into that business.

    bump up you skills so you can take care of the house, cars to some degree or have your husband do this. Better to have 2or3 un reliable cars than one moderate one.

    -never ever conduct business illegal
    -never wind up owing taxes, calculate this every year.
    -you can accomplish more with a good husband, make a bad choice and your phucked.
    -various mutual funds, let the experts invest
    -get a husband employed in a another line of work




    Okay... so I'm really going to need a husband from the sounds of it! Honestly, I think doing that is going to be the most difficult task in my life icon_lol.gif


    Learn PHP scripting and become a six figure PHP script kiddie so you can supposedly help a company do something in which they could do themselves. Wealth is not being created as readily as it was before and economic opportunities are dwindling. Be fortunate with whatever money you can get in this economy unless you know how to create wealth or can add value to things or people.
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    Feb 28, 2014 5:20 PM GMT
    Ohno said It is important to not be out of the market during sustained boom periods e.g. 2003-2008.

    Of course this requires you to do some homework and have sources you can trust where you can intelligently know when to move your money into something safe while the market is on the downslide and when to move it back in when the market is about to take off like a rocket ship. If we all knew this, we'd be rich however there are ways to follow many of the market's statistics to determine volatility.

    A good source that I've used for years is a guy by the name of Bob Brinker. He has a syndicated show (Money Talk) on during the weekend but his recommendations have taken me out of the market on the top, put me back in at the bottom and allowed me to ensure capital preservation of the increased value of the investments.

    He has some free advice on his site, along with explanation of some of the investment terms. His newsletter is pricey but worth it once you've been investing a while.

    http://www.bobbrinker.com/index.asp
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    Feb 28, 2014 5:53 PM GMT
    ROTH IRA.
  • equus77

    Posts: 55

    Feb 28, 2014 6:26 PM GMT
    somersault said^^

    yup this guys knows about all the scams and "skimming" (when they take 2-5% of your cash EVERY year for doing shit.


    Fortunately or unfortunately, I never got in to it far enough to ever make commissions from that.
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    Feb 28, 2014 7:32 PM GMT
    eb925guy said
    Ohno said It is important to not be out of the market during sustained boom periods e.g. 2003-2008.

    Of course this requires you to do some homework and have sources you can trust where you can intelligently know when to move your money into something safe while the market is on the downslide and when to move it back in when the market is about to take off like a rocket ship. If we all knew this, we'd be rich however there are ways to follow many of the market's statistics to determine volatility.

    A good source that I've used for years is a guy by the name of Bob Brinker. He has a syndicated show (Money Talk) on during the weekend but his recommendations have taken me out of the market on the top, put me back in at the bottom and allowed me to ensure capital preservation of the increased value of the investments.

    He has some free advice on his site, along with explanation of some of the investment terms. His newsletter is pricey but worth it once you've been investing a while.

    http://www.bobbrinker.com/index.asp


    Golden cross and death cross are reasonably reliable
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    Feb 28, 2014 7:57 PM GMT
    ROTH IRA, I put the max in every year. Then I do my work 401k and own personal stock investing.