Financial advice - options instead of a savings account??

a reply to: Wetpaint72

Awesome! I discovered him quite some time ago. My SO doesn't really read, but I share tidbits with him and were on the way to early retirement.

a reply to: charolais
I have read most of the others suggestions and I see that most of them suggested investing into something.

What I have done when I was your age was to pay of my loans first before I decided what I need to do with the extras, the cost of the loans with interest are eating up your potential growth earning in the near future.

Once I paid my loans and things off, I first got my reserve funds put away, in case something happened I had 4-5 months of my earning in savings so that I could use it for emergencies.

Then I went after property, yes another thing to either pay for all at once or pay off as quick as you can with out sacrificing your living expenses.

During the above I had a 401k, I maxed it out with my employer, 5 % of my pay goes in there and they match for every 5 dollars I put in I get 4. they also have an employee stock option, here I put 4% of my pay into.

We also have some IRAs that we just keep rolling over, we stay away from CDS because of the rates are so low, but we also opened up a Etrade account and have been investing in some companies, we stick to around 100-500 shares and our dividends are decent at the end of the year, a little play money, or we just roll it back into the stocks, one example is "Dollar Tree".

I never use a Money Manager from any where, I do it all on my own, I like that kind of thing, when the 2008 markets crashed I know a lot of people that lost huge amounts of money, I actually made money since I foreseen this coming. I have always said that Money managers are only out to make themselves money, they really don't care if you loose money, so I have always said I can loose my money just as easy as they can.

My oldest son always paid for his schooling and is working, he has followed my advice and I thing I notice you never mentioned not being married, here is the advice I gave my son, "Get a sound prenup" and make sure she has her own job and money, this way you can meet in the middle.

GOOD LUCK

Wow I am amazed at all the great responses from everyone!

I currently have well over a year worth of expenses stowed away in savings, so I think the best thing to do is take the next year and pay heavily into student loans and get them paid off. I figure I can have them 100% paid in about 16-18 months and still add a fair amount of cash to my savings from each paycheck. Once I have those debts off my shoulders I will re-evaluate my situation.

As far as vehicles go, you will never find me buying a brand new vehicle! I have always bought fairly new but high mileage cars/truck (about 5 years old) for dirt cheap and maintained/repaired them myself. Being raised on a farm I am able to fix just about anything, so repairs do not cost me much other than a weekend or two of my time.

originally posted by: Atsbhct
Go to the forums here: Mr. Money Mustache

I'll be sure to check this out

originally posted by: Ksihkehe
a reply to: charolais

I'm glad you have no vehicle debt, it's best to have a used vehicle with a good track record. Let somebody else pay the premium of a new vehicle.

You should pay off that student loan debt, imagine how good it will feel to be completely debt free. At the same time a bit of greed isn't a bad thing. You should always have a cash reserve for emergencies. Three months of expenses is a good place to start.

If you plan on buying a home you will want to keep your investing in liquid funds so that you can move that money to buy a home. Buying a home cash is awesome. You're young so you may want to consider if you plan on staying where you are or following the money.

There are some telling you to invest in gold and silver. While those things can be a part of an investment strategy I'm not sure that's a good route right now. When you invest in commodities like gold and silver you need to keep an eye on historical values and right now, given the abnormal state of the economy being propped up by the fed, I don't think gold and silver are a good buy. They will go up as inflation hits after the rate hikes, but I think if you look at historic prices they will eventually drop lower and be a much better buy in 2 or 3 years.

Even with the inflated prices you can't go wrong buying a market index fund. Even if it drops history tells us that it's a good investment. Right now is a good time to be paying down debt. In a year or two it will probably be a very good time to be dumping as much as you can into the markets.

Thank you for the advice, I agree now is a good time to become debt free (until I buy a house/property in a few years )

I have tossed around the idea of trying to chase the money and to optimize my salary but overall engineering is fairly stable around the entire country. Of course you will find increased salaries in the premium cities (Boston, LA area / CA, Dallas / TX, etc.) but to each of these comes their own expenses and associated costs. I rather work hard where I am at now and earn the higher salary via experience then to move to a more wealthy area.