Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Absolutely clueless but I'm eager to learn
Old 06-10-2017, 11:20 PM   #1
Confused about dryer sheets
 
Join Date: Jun 2017
Location: Toronto
Posts: 2
Absolutely clueless but I'm eager to learn

Hey guys. So to sum it up, I am absolutely ignorant about investments and early retirement but it is a concept I am very interested in learning about. Basically today, my parents were looking for a real estate investment in a condo close to a university. I was very intrigued with all the information and the numbers the property manager was telling us while he showed us a few of his units. This opened my eyes to realizing the possible opportunities that can be introduced if I play my cards right and learn about investments like these. I'm 21 y/o and the path I've been taking is going to school for a degree, work until 65 then retire. I honestly believe that path is not the path for me and I want to be more efficient than that and retire early so I can live my life the way I want rather than retiring at an old age when I can't even enjoy that retirement.

Like I said, I am completely clueless about this forum so I will be browsing around to see what kind of information I can absorb and learn from. Although I know there is a search function, do any of you have any tips and advice to guide me? Whether it be a post or discussion, a book that could help me get started and anything helps. I just want to take that first step. Thank you!
__________________

sega is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-11-2017, 08:19 AM   #2
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 775
https://www.bogleheads.org/RecommendedReading.php
__________________

broadway is offline   Reply With Quote
Old 06-11-2017, 08:36 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Jan 2011
Posts: 1,611
Before investing in real estate or anything "exotic," follow these rules first:
  • LBYM - Live Below Your Means. Spend less than your take-home pay.
  • Pay your credit card bill in full every month
  • Avoid debt as much as practical.
  • Save at least 10% of your earnings.

Do these, then consider if you're ready and knowledgeable enough for other investments.
mystang52 is offline   Reply With Quote
Old 06-11-2017, 09:06 AM   #4
Moderator
MBAustin's Avatar
 
Join Date: Jul 2010
Posts: 5,288
Quote:
Originally Posted by mystang52 View Post
Before investing in real estate or anything "exotic," follow these rules first:
  • LBYM - Live Below Your Means. Spend less than your take-home pay.
  • Pay your credit card bill in full every month
  • Avoid debt as much as practical.
  • Save at least 10% of your earnings.

Do these, then consider if you're ready and knowledgeable enough for other investments.
All of these, plus track your expenses in detail for 3-6 months to understand where you are spending your hard-earned $$ and see if that's in line with your priorities.

On the savings side, build an emergency fund first (3-6 months basic living expenses) and also invest in your 401K if you have one to get the company match. After the emergency fund is built up, save for major expenses (so you can pay cash for the next car, down payment on house) and invest more into your retirement funds.

The good news is that you are thinking about this way sooner than many folks, so if you educate yourself and stick to the plan, you will do well.
__________________
"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
----------------------------------
ER'd Oct. 2010 at 53. Life is good.
MBAustin is offline   Reply With Quote
Welcome.
Old 06-11-2017, 11:01 AM   #5
Recycles dryer sheets
 
Join Date: May 2015
Posts: 54
Welcome.

21yo. That's your best start. You have time on your side. Do everything the above posts have said. Read, read and read investment books focused on sensible investing. Not those that want you to make lots of money investing in options or some new SYSTEM or whatever.

Remember that no one and I mean no one can forecast the future or the direction of the market.

Learn about mutual funds, back door roths, tax loss harvesting and rebalancing.

You don't really need a financial advisor but you may need one to coach you. Only pay for one as needed per hour. Use them to learn some skills and then do it yourself.

if you save 50% of your after tax salary you can retire in about 17 years.

If you save 70% you can retire in about 10 to 12 years.

I hope that degree you are getting is in a high paying job or at least a well paying job. If you have debt for school, get rid of it as fast as you can.

If you are someone who can start a business and have the stomach for it, you should consider at some point.
slv1 is offline   Reply With Quote
Old 06-11-2017, 12:23 PM   #6
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 2,947
Start with this:

https://www.etf.com/docs/IfYouCan.pdf

+1 on not messing with real estate. At least for a while. It is a tricky business and definitely not one for an amateur's speculation. Eventually you may want to get into rental properties (I did for 20+ years.) but for now just do what Bernstein says and read what he recommends.

And never, ever, borrow money to buy a car or any other toy. Never, ever, lease either. That is just a complicated and expensive way of borrowing money. There are exceptions, but few, so don't worry about them.
OldShooter is offline   Reply With Quote
Old 06-11-2017, 01:54 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Mar 2017
Location: New York City
Posts: 2,838
Written budget. Use cash . this game of using plastic for miles, cash back etc, works for some but i read you spend 14 or 18 % more when you use credit cards. Trust me its painful to whip out a "C" note and get back 3 bucks in change. Dont buy a brand new car till you have a million bucks, Im serious. Save at least 15 % of what you make. At 21 i was pushing a baby carriage, and on my day off i was moon lighting at a second job. You are off to a great start.
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
Blue Collar Guy is offline   Reply With Quote
Old 06-11-2017, 03:54 PM   #8
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 19,482
In addition to what the others have said (save, LBYM, track spending, use cash whenever possible, never pay credit card interest, etc.) some books I found helpful are these:

The Millionaire Teacher by Andrew Hallam

How a Second Grader Beats Wall Street by Allan S. Roth

These first two are the ones I absolutely recommend.

I also have read these:

Predictably Irrational by Dan Ariely – I found this very interesting!

The Four Pillars of Investing by William J. Bernstein

Why Smart People Make Big Money Mistakes by Gary Belsky & Thomas Gilovich

Your Money & Your Brain by Jason Zweig

The Investor’s Manifesto Preparing for Prosperity, Armageddon, and Everything in Between by William J. Bernstein

A Random Walk Down Wall Street by Burton G. Malkiel

And if you really want to get deep into behavior issues with money– Thinking, Fast and Slow by Daniel Kahneman, the only psychologist to win a Nobel Prize in Economics. It’s probably more than most people want to get into but I found it fascinating. It’s also a rather thick book.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 06-11-2017, 05:06 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 21,667
Pay yourself first.... target a sensible % of savings given your income put it on auto-pilot and spend the rest (having the fun that a 21 yo should have.

Put a portion of each raise that you get into savings... I would typically increase my savings for 1/2 of my raise and spend the rest.

After you have an emergency fund of 3-6 months of savings (in an online savings account that will pay ~1%... much better he 0.1% or less at your local bank), invest in a domestic equity index fund like Vanguard Total Stock Market Index fund.

If your employer offers a 401k match, contribute at least enough to get the full match... its free money.

Subscribe to Money magazine and/or Kiplinger's Personal Finance magazines and read them.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is offline   Reply With Quote
Old 06-11-2017, 06:12 PM   #10
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 3,038
Oh 21? You can take whatever path you like but do finish that degree. So many jobs don't care WHAT you did in school, other than if you finished. You're close, so do it.
You don't have to have a career in the field of your degree, so don't feel limited. What do you want to do? Intern it over a summer. Chances are you will be at least working for 20 years so figure that out over the next 3-5 years.

- Never go into debt. Finance that car if you must but pay it off quickly, pay more than the monthly. Get ONE credit card for emergencies/benefits, but pay in full, never carry a balance - NEVER
- If you come out of school with debt, explore ways to minimize and get that paid quickly
- Save up 6-12 months of expenses in cash. That way you never use credit (debt) and never pay more for things than needed
- Get a work wardrobe of 5 days of rotating pieces that are presentable for being your boss. Wash and wear, quality items that will last for years. Nice slacks, dress shirts, whatever, office-ready.
- Max your 401k or whatever retirement plan is offered, from day1. Minimum to get the match, ideally the max the IRS allows. Yes, you will retire before 59.5 if you are planning now, but keep at it.
- Before you start mucking about with RE and other more volatile things, get started with that Bogle thread above, some nice index funds, park them. - after you have your 6-12 months and are looking for taxable investments. Your 40 year-old self will thank you greatly.
- Don't get married until you are at least 27. You will change so much over the next few years
- Marry a smart person who is like-minded
- Use condoms every time
Aerides is offline   Reply With Quote
Old 06-11-2017, 09:54 PM   #11
Thinks s/he gets paid by the post
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 1,957
To the OP = I can't add to the already great advice of how to gain knowledge that others have posted here.

My only suggestion is - do not try to do all these things at once.

The ONE suggestion that you will be able to leverage among all the others - Live Below Your Means (LBYM), save and avoid debt as much as possible.

For us, our ability to save was at least as important as the returns we have obtained from our investments.

Oh, one more thing - do occasionally have fun and spend. When I was young and would get an unexpected bonus, the rule of thumb I learned from others was to use 80-90% to save/invest/pay down any debt, and go have fun with 10-20% of it.
__________________
FIREd date: June 26, 2018 - wwwwwwhat a rush!
jollystomper is online now   Reply With Quote
Old 06-12-2017, 06:16 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 21,667
Quote:
Originally Posted by Aerides View Post
....Never go into debt. Finance that car if you must but pay it off quickly, pay more than the monthly. Get ONE credit card for emergencies/benefits, but pay in full, never carry a balance - NEVER...
I have a different view... while I agree that credit card debt is bad, not all debt is bad.... over my 40 or so years of investing my investments have totally outperformed any interest on debt. I currently have a 3.375% mortgage and a 1.9% car loan and my investments have and I expect will easily outperform both of those.

I put almost everything on a credit card to get 2% back on everything, an additional 2 years extended warranty on most major purchases, price rewind benefits, etc. If you spend $25,000 a year and can put 1/2 on a credit card that is paid off every month then the 2% cash back is a cool $250/year.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is offline   Reply With Quote
Old 06-12-2017, 07:03 AM   #13
Thinks s/he gets paid by the post
jollystomper's Avatar
 
Join Date: Apr 2012
Posts: 1,957
Quote:
Originally Posted by pb4uski View Post
I have a different view... while I agree that credit card debt is bad, not all debt is bad.... over my 40 or so years of investing my investments have totally outperformed any interest on debt. I currently have a 3.375% mortgage and a 1.9% car loan and my investments have and I expect will easily outperform both of those.

I put almost everything on a credit card to get 2% back on everything, an additional 2 years extended warranty on most major purchases, price rewind benefits, etc. If you spend $25,000 a year and can put 1/2 on a credit card that is paid off every month then the 2% cash back is a cool $250/year.
I agree, but regarding the credit cards it is critical for the OP to have the discipline to pay the balance off every month, come rain or shine. The fact that most people do not is why credit cards are so profitable. That is probably the toughest lesson to learn for those new to credit cards, I know it was for me.
__________________
FIREd date: June 26, 2018 - wwwwwwhat a rush!
jollystomper is online now   Reply With Quote
Old 06-12-2017, 07:33 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 21,667
Totally agree!
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56...60/35/5 AA
pb4uski is offline   Reply With Quote
Old 06-12-2017, 08:21 AM   #15
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 3,038
^

So I made a broad comment about "never go into debt" because that sticks better than "almost never....except except except". Of course there is nuance. Low cost secured-debt for a home or car, sure. Using a CC for cash-back and paying in full every month, sure (but I don't consider it debt if you don't carry a balance). But at 21?

My 21 year old self would not have always had the means to pay in full when life's little issues appeared. And rarely the discipline. At that age, remember little things like needing 2 new tires you weren't expecting, can throw you off when you are managing a small budget. Very tempting to put that on credit. But that's why the 6 month buffer in cash is the first priority so there's never a need.

I'd add another tip: Be ok being 6-12 months behind your friends on the newest whatever. Be ok being n-1. Don't get the iphone the day of release. Don't even look at that Xbox-X until 2019. You don't need a 4k TV either, when 1080p's are dirt cheap now. etc. Stuff is nice, and new stuff is nicer, but you'll save thousands over a lifetime with a little patience.
Aerides is offline   Reply With Quote
Old 06-12-2017, 08:41 AM   #16
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 2,947
Quote:
Originally Posted by pb4uski View Post
I have a different view... while I agree that credit card debt is bad, not all debt is bad.... over my 40 or so years of investing my investments have totally outperformed any interest on debt. I currently have a 3.375% mortgage and a 1.9% car loan and my investments have and I expect will easily outperform both of those.

I put almost everything on a credit card to get 2% back on everything, an additional 2 years extended warranty on most major purchases, price rewind benefits, etc. If you spend $25,000 a year and can put 1/2 on a credit card that is paid off every month then the 2% cash back is a cool $250/year.
With respect, I think these are extremely bad ideas for the OP, who is 21YO and in school. These are notions for someone who is financially much more experienced and who has significant capital.

We can debate the wisdom and the cost-effectiveness of individuals' playing the carry trade game, maxing cash-back ccs, kiting balances between zero interest cc offers, etc. but in some other thread. This is not the place for those ideas IMO. The basics in Bernstein's 15 pages (https://www.etf.com/docs/IfYouCan.pdf) is all the OP needs for now.

Quote:
Originally Posted by Aerides View Post
... I'd add another tip: Be ok being 6-12 months behind your friends on the newest whatever. Be ok being n-1. Don't get the iphone the day of release. Don't even look at that Xbox-X until 2019. You don't need a 4k TV either, when 1080p's are dirt cheap now. etc. Stuff is nice, and new stuff is nicer, but you'll save thousands over a lifetime with a little patience.
Here is wisdom. Feed off the losses of the early adopters and retire far ahead of them. This is true of cars as well as of expensive electronic toys.

I just bought a LNIB Nexus 5X cell phone for my wife on the local Craigslist. $175. Original new price: $429. It's a fun game, seeing how much I can get for how little. I play it often, regardless of the fact that my wife and I have far, far more money than we will ever need. And, yes, she shops the grocery store coupons too.
OldShooter is offline   Reply With Quote
Old 06-12-2017, 09:06 AM   #17
Confused about dryer sheets
 
Join Date: Jun 2017
Location: Toronto
Posts: 2
Thank you all for the great advice! Although a little overwhelming but thats not a bad thing haha. I realized a lot of these terms you guys are saying does not mean anything to me as I still need to learn these terms lol.

A few other fact, I actually don't even have a credit card yet. Ever since I got my first job I always made sure that I only spend money that I do have. I am planning to get a CC soon in order to build my credit (Although i don't even know if its that effective as I just heard that from someone else and I barely know what building my credit means.). How do I go about it when I do have one? Just pay it every month? I'm fairly confident I will not go in debt with my CC I've been okay with my money the past few years so I should be okay with spending only what I actually have.

I think i'll be starting with the Bernstein's 15 pages you guys are mentioning and maybe a book or so that was mentioned above. What should come second after bernstein?

Again, thank you guys so much for the multiple reponses. What a great community!
sega is offline   Reply With Quote
Old 06-12-2017, 09:29 AM   #18
Thinks s/he gets paid by the post
OldShooter's Avatar
 
Join Date: Mar 2017
Location: City
Posts: 2,947
The absolute first thing, as @mystang52 said: LBYM

Quote:
Originally Posted by sega View Post
... How do I go about it when I do have one? Just pay it every month? I'm fairly confident I will not go in debt with my CC I've been okay with my money the past few years so I should be okay with spending only what I actually have. ...
Absolutely pay the card off every month. Just set it up to autopay from your checking account. That will eliminate temptation.

Re credit score, if you are responsible and pay all your bills on time, every time, the credit score should take care of itself. Again, autopay is your friend. No need to obsess about the exact score. The only people who have to do that are people with bad credit. You might find it interesting to check your credit once in a while, though: https://www.consumer.ftc.gov/article...credit-reports just to make sure there are no mistakes.

Quote:
Originally Posted by sega View Post
I think i'll be starting with the Bernstein's 15 pages you guys are mentioning and maybe a book or so that was mentioned above. What should come second after bernstein? ...
Bernstein gives you a reading list. You'll be busy for while. After that, I particularly like the last three books on @Walt34's list.

Millionaire Next Door is an easy, fun read if you are tired of the more serious stuff.

Edit: And avoid buying new books! Most can be found at libraries as e-books. Hard copies are best bought as used books on Amazon. LBYM!
OldShooter is offline   Reply With Quote
Old 06-12-2017, 10:22 AM   #19
Thinks s/he gets paid by the post
RetireAge50's Avatar
 
Join Date: Aug 2013
Posts: 1,257
In my opinion it is more about execution than knowledge or decisions. If you are currently 21 you can map it out in about 30 rows (ages 21 to 50) and 3 columns (Investment Purchases, Return on Investment, Balance).

You need to put as much into the first column as possible, the rest takes care of itself. The more stuff that takes away from you putting money into this first column the longer it will take to reach your goal.

I went with 100% stock mutual funds with low fees (like the S&P 500 fund) but I do not consider myself very knowledgeable about investing. I am very good at common sense, consistency, and avoiding bad decisions (which is most decisions so I do not make many).

Good Luck!
RetireAge50 is offline   Reply With Quote
Old 06-12-2017, 12:37 PM   #20
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 19,482
Quote:
Originally Posted by sega View Post

A few other fact, I actually don't even have a credit card yet. Ever since I got my first job I always made sure that I only spend money that I do have. I am planning to get a CC soon in order to build my credit (Although i don't even know if its that effective as I just heard that from someone else and I barely know what building my credit means.).
I'm not sure how true it is now, but at the suggestion of an older sister I did get a Sears credit card in 1972 for exactly that reason - to build a credit rating. At the time I was a Sears employee (service department) so I figured it would be easy to get because I never once called in sick there. I think it had a limit of $400, which was plenty for me. I'd buy a shirt or pair of jeans once in a while and pay it off when the bill came in. I'm pretty sure that credit rating allowed me to get my first apartment.

On the flip side, a few years later I worked with a guy who had a VERY hard time getting a mortgage to buy a house because he had no credit rating at all. Not bad credit, he paid for everything in cash, so he had no credit rating at all.

So my advice would be yes, get a cc or two but use them sparingly and BE SURE to pay them off every time the bill comes in. Or as suggested, set them on autopay.
__________________

__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
New to the board and eager to learn smashfactor18 Hi, I am... 19 01-08-2011 08:30 AM
If there was ever Absolutely Nothing would there ever be....anything? cashflo2u2 Other topics 35 04-27-2008 11:50 AM
Absolutely the worst show on television... cute fuzzy bunny Other topics 26 07-27-2007 08:38 AM
Zer, new here... eager to learn more about early retirement Zer Hi, I am... 9 07-24-2005 11:58 AM
Too clueless to recognize they're clueless... Nords Other topics 7 07-20-2005 05:51 PM

» Quick Links

 
All times are GMT -6. The time now is 01:06 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.