Savings?

Maggie wrote "Life seems unfair sometimes." Life is unfair, obviously. The trick is to take the lemons
and make lemonade. I know not all are able to do this.
Let me explain it this way. There is a bunch of stuff
I used to do that I can no longer handle. That's okay.
I recognize this is part of aging and the process will only
accelerate. Life really is just a big crap shoot anyway.
But, when my wife asks me if I should really be doing this or that, I say "What are the alternatives? Sit in
my chair and feel sorry for myself?" That is no way to
use the unknown amount of time we have. Life is short.
Whatever time you get is luck. The way I see it your
best chance is to focus on something that makes you happy. Imagine working a job you hate and dying in harness. Is there a worse fate?

John Galt
 
Hey Maggie !

You're 26 eh ? yeah, I know how you feel. I'm 34. When I was 26 and was working on my FIRE plan, I felt overwhelmed too. I looked at how much I thought I needed and how much I was making and how much I was putting away and occasionally felt, why bother ? But, I kept on saving as much as possible, but also traveled like crazy, bought motorcycles, went waterskiing/snowskiing/hiking, blah blah blah. My point is that it takes time, watching it every day is painful and doesn't make it grow faster. When I was 26 I was making 1/3 of what I make now. You will get opportunities to make more money, look for them and take them. If you are single w/o kids you can take lots of chances by switching jobs for huge pay raises. You will get to FIRE b/c you are thinking about it now, but making more money will get you there sooner. You've gotten great advice already from the people here, let me add to that. Right now, you don't make much money, that can be looked at as a good thing. Look at how much it is costing you to live now. Assuming you are still enjoying life, don't let this amount creep up as you make more money, keep it basically the same. If you can do this, you will FIRE. Now, go out and find a friend with a boat to take you waterskiing, here it's a beautiful sunny day ! I'm going for a putt one the Harley.... (Nah, I ain't retired yet, but I AM going to play hooky today !!).

-Pan
 
Jeez Panhead, I thought you disappeared. I'm going riding today also. No idea where I will end up, which as you know is part of the fun.

John Galt
 
Hey Hey John Galt ! Nah, I'm still lurking. My new job has me traveling the globe and I haven't had much time to post, but I've been reading when I have a chance. Maggie inspired me a bit, and since I'm in the states for a few more days, figured I'd see if I could return some of the inspiration.
Getting lost somewhere in the middle of nowhere with beautiful scenery and lots of twisties is one of the greatest pleasures of riding, enjoy !!!!

-Pan
 
EVERYONE thank you so much for all your help.
I feel a little better today.
This is what I want to do:
"get lost somewhere in the middle of nowhere with beautiful scenery"
Unfotunately, I still can't :(. But let me tell you one thing. If I at least had a job where I could take time off for at least a month, things wouldn't be so bad.
So far I've been able to take about 4 weeks at a time and travel the world, as I love to do. Recently the situation at my job has changed and it seems like I will not be able to to take all my vacation at once. If they allow me to take a week at once I will be lucky.
I don't have high expectations in life, I am not a spender. I don't need luxuries. I don't buy perfumes and cosmetics. I don't like fancy clothes, actually find them repulsive. All I want to do is enjoy my simple life and travel. Now, travel does cost a lot, not because I stay in expensive hotels and spend on fancy stuff. It's been expensive because when I do take off I want to absorb as much as I can, from the people, places I visit. Transportation costs a lot. I am not one to sit in one spot. I always want to see as much as I can, meet as many people as possible.
This is what I call life-long learning and not some stupid job I don't even think a school can give me this kind of education. Right now with my situation I can't do this any more. I also don't need to go away far to find beautiful places, actually the outskirts of my city have pretty nice spots.
What I sometimes get from people is that I am immature and don't know what I want in life. They tell me that I need a nice car and a house.
It's seems like I need an ER :). Having time on my hads would definitely help me achieve MY goals.
I will need to sit down and figure out if I was to take off somewhere once in a while for an extended period of time and the cost would be lower than actual cost of living where I live/will be leaving when I retire, I might need to have less money than I think I need.
Let me ask you this. I know I have asked before. But wil do it again. Other than 401K, 403(b) and IRA. Where else would you allocate your money so they could be taken out in let's say 10 years. Some money at least? Mutual Funds? CDs? Other?
 
Real estate! Easy for me to say though as I have
30+ years of experience in it.

John Galt
 
---

Open an account with Vanguard. Start putting cash into it. When you get over $3000, choose a mutual fund and transfer your money into it. If you are having trouble deciding which one, use an S&P 500 index fund. It can be very simple if you let it.
 
Maggie

Here's a Plan B for you. It doesn't start off with First, get a million dollars...

Completely rethink the way you are living, with the idea of getting your expenses as close to zero as you can. All you really need is a tiny room to live in, access to a bathroom, and one or two square meals a day. No apartment of your own, no car, no cable TV, no phone, you get the picture.

Get the room and the two squares a day by resourcefully working your network of friends. Somewhere there is perhaps an older widow who has plenty of house but who has difficulty keeping it up and living alone. Trade domestic chores, lawn mowing, and handyperson efforts for a room to live in.

Since you are interested in travel, maybe pick up a few extra "tax free" bucks by helping immigrants practice simple English conversation around their dinner table. Charge lightly and be charming. You'll get free meals and a network of foreign connections out of this. It could be an opportunity to learn how to travel cheaply to places you've never heard of and maybe even get homestay invitations.

Anyway, just consider the possibilities that might open up if you simply break out of the job/consumption paradigm. I don't know if my specific suggestions have any merit, but maybe they will start you thinking about some alternative ideas.
 
Plan B sounds like a direct route to "bagladydom"! :'(
 
 If I at least had a job where I could take time off for at least a month, things wouldn't be so bad.  
Click to expand...

Maggie,
Ah, the 20s. Reading your post bring back memories. The difference was (and maybe this is what you need to think about) that it pained me to take even a day off for vacation. I loved my job. I lived for my job. I even dreamed about what I need to do on the job. All that changed in late 30s and by early 40s, I had nightmares about the job and day dreamed ER.

My point is that your 20s and 30s are the most productive 'go getter' years of your life. You need to find a job that is rewarding and that you can enjoy. The financial rewards were fringe benefits because I was in my 'puppy phase of life' (young, eager to please, frisbee-in-my-mouth-before-you-can-blink).

Your options are:
1. Fake it - your manager will appreciate the attitude and potentially gives you a raise
2. Find another job/career that you can enjoy and reap the 'fringe benefit' financial reward - recommended option
3. Continue on the present course and hope for the best - yes, you can always do that!

BIO: I worked my @&^ in my 20s and early 30s and ER in early 40s.
 
Ya wouldn't be wanting to be provocative or anything, would ya now, Zipper!!

A young person who wants to see the world can probably just go ahead and do it. Last September I was on Nantucket - you know, where the millionaires complain that the billionaires are crowding them out. The place was full of young people from Eastern Europe and the Caribbean who just came as they were to work seasonal jobs. They get by pretty much according to Plan B. I had opportunities to make small talk with a few of them and they seemed to be normal, interesting young people with lots of stories to tell.

One of my former mothers in law is an extraordinarily resourceful and intelligent person. Somehow she has always been able to find opportunities in every situation. Plunk her down anywhere in the world, then check back a couple of years later and she's at the center of a big circle of friends, happy and prospering. A while back she found herself single again. She hit the road, bounced around a few months, and wound up living in Tobolsk, Siberia for six years, speaking Russian and happy as a clam. She got tired of that, bounced around some more, and surfaced again living full time on Nantucket.
 
Yeah Platy, my son is just like that. Plunk him down anywhere in the world with no resources and pretty
soon he will have all the friends and activities he can handle. Job? Money? Career? He don't need no
stiiiiiinking job :) Well, maybe he does now since he just got married, but still.....................

John Galt
 
Hey Maggie !

Yeah, I know how you feel. As for investments, my plan is very simple, it's basically as follows:

401k: Max this out every year
ESPP (employee stock purchas plan) basically free money, max this out as well, if you have one, but be careful here.
Taxable Funds: Most of the leftover goes here, primarily VFINX (vanguard index sp500)

People recommend having X # of months for living expenses in a safe place. I'm single and have very low expenses, so I don't worry about this. I keep my checking account a little fatter than I should to offset it though. Unemployment would more than cover my expenses.
If you do a search for investment calculator on the web, you will find plenty of these to show you how X# of dollars invested over Y years with Z contributions at X1 interest rate will grow into Z1 dollars (Sorry about the algebra !). Check out Motley fool and their calculators, just be careful of their investment advice (fool.com).
As for the job, look around. I just changed jobs to one that lets me travel to Europe for extended periods of time. It's still a job, so it ain't ideal, and I don't have final say on where I go, but it's a good compromise. The company had a LOT of trouble finding someone willing to travel like this. If you're willing, I bet you can find a job that will let you travel.
That being said, I know plenty of people who just bum around. No real job, they just work when they need the money, make friends and leave on good terms so if they need the job again, they have it. They travel around and find jobs where they go. This can be a bit more difficult in a foreign country, but you get the idea.
I'm not fully versed in your situation, but if you're single with very low expenses and nothing to tie you down, you can do what you want. You may never make a million, but you may have a great and interesting life. Of course, while you're doing this, put something away each year for your older years when you are less able to work, and this will pretty much have you working at least some for your entire life.

-pan
 
THANK YOU for your advices!

I am going to look into mutual funds. I might get confused and come back here for your help :)

In the mean time I would like to get your opinion on allocating money in 403(b).
I just checked my 403(b) total and it seems like I am loosing money :(
Could someone help me with my allocation?
Right now I have:

CREF Stock 10%
CREF Growth 30%
CREF Equity Index 10%
CREF Global Equities 15%
TIAA Real Estate 25%
CREF Bond Market 10%

should I change something here?
 
Hi Maggie

You are doing just fine. Your 403b allocation looks fine. If you have extra savings that need to be invested open an account with Vanguard and invest in their index funds. I'd stick with 60-70% in stocks and 30-40% in bonds. You can do it in a single fund if you choose something like the
Lifestrategy Moderate Growth Fund.

ANother option is investing in Real Estate. Do you have any desire to own your own home or condo? You could buy a house and rent out rooms to other young people. Then sell (or rent) the place in 10-15 years when you RE and continue your worldly travels.

You are getting excellent advice here, and probably do not need to hire a financial advisor. If you do, make sure you hire someone who will give you advice for a fixed fee (by the hour), and not someone who will take your money and invest it for you taking a percentage of the profit.
 
Unless your IQ is under 50, do not..................
I repeat "do not" hire a financial advisor. Stay
tuned right here. You will get better info, and it's free.

John Galt
 
If I didn't max out my 403(b) yet, does it make sense to buy Mutual Funds?
 
If I didn't max out my 403(b) yet, does it make sense to buy Mutual Funds?
Click to expand...
Jarhead, I could be wrong but I think she's asking whether she should invest in taxable accounts when she hasn't yet maxed out her tax deferred accounts. I have a co-worker who posed the same question like that.

Maggie, you can invest in mutual funds in either a taxable or a tax deferred [403(b)] account. I would use mutual funds in both. But I wouldn't invest in a taxable account until I had maxed out my 403(b) unless I needed to access those funds to buy a car or a house or something. In other words, if you can afford to max your 403(b) and still pay the bills, then by all means do the 403(b) first. But make sure you have an emergency fund, all the insurances you need, etc.
 
Bob,

I was trying to be a smart ass and succeeded. Your
wise response is tops.

Cheers,

Charlie
 
OK, I am going to max out my 403b first. I was told I can contribute $13,000 a year, but I forgot to ask whether that was including what my employer was contributing or just what I was contributing. Do you guys know?

Also, I have some money in the bank that is just sitting in the savings account. I know I don't need that right way, so instead of having it sitting in the savings account, where can I put it so I have some interest at least? I am thinking of something like $5,000.
Any ideas?
 
Maggie D-

The $13,000 limit is just for your contributions.
 
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