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Re: Savings?
Old 07-03-2004, 01:16 PM   #61
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Re: Savings?

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.

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Re: Savings?
Old 07-03-2004, 02:12 PM   #62
 
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Re: Savings?

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
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Re: Savings?
Old 07-05-2004, 08:50 AM   #63
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Re: Savings?

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
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Re: Savings?
Old 07-06-2004, 07:38 AM   #64
 
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Re: Savings?

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?


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Re: Savings?
Old 07-06-2004, 02:27 PM   #65
 
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Re: Savings?

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.
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Re: Savings?
Old 07-06-2004, 04:10 PM   #66
 
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Re: Savings?

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
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Re: Savings?
Old 07-08-2004, 07:24 AM   #67
 
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Re: Savings?

If I didn't max out my 403(b) yet, does it make sense to buy Mutual Funds?
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Re: Savings?
Old 07-08-2004, 10:22 AM   #68
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Re: Savings?

NO!

Cheers,

Charlie
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Re: Savings?
Old 07-08-2004, 04:02 PM   #69
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Re: Savings?

Chuck-Lynn:
Could you elaborate please?
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Re: Savings?
Old 07-08-2004, 05:30 PM   #70
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Re: Savings?

Quote:
If I didn't max out my 403(b) yet, does it make sense to buy Mutual Funds?
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.
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Re: Savings?
Old 07-08-2004, 06:18 PM   #71
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Re: Savings?

Bob,

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

Cheers,

Charlie
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Re: Savings?
Old 07-08-2004, 08:04 PM   #72
 
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Re: Savings?

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?
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Re: Savings?
Old 07-08-2004, 09:32 PM   #73
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Re: Savings?

Maggie D-

The $13,000 limit is just for your contributions.
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Re: Savings?
Old 07-09-2004, 06:07 AM   #74
 
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Re: Savings?

I see, thank you!

Would anyone recommend buying stocks?



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Re: Savings?
Old 07-09-2004, 06:16 AM   #75
 
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Re: Savings?

NO
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Re: Savings?
Old 07-09-2004, 06:32 AM   #76
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Re: Savings?

Quote:
Also, I have some money in the bank that is just sitting in the savings account.
That's where a money market mutual fund comes in (not to be confused with the so-called "money markets" your local bank has). I always like to keep about 3-6K in a money market account; call it an emergency fund, for unexpected purchases (say the frig dies, or i have a pricey home repair). Anyway, the return on a money market fund will always be superior to a savings account, by a long shot. And unlike a savings account, you can write checks on it.

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Re: Savings?
Old 07-09-2004, 07:43 AM   #77
 
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Re: Savings?

So which mutual fund would you guys recommend as emergency fund?
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Re: Savings?
Old 07-09-2004, 09:27 AM   #78
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Re: Savings?

Quote:
So which mutual fund would you guys recommend as emergency fund?
I wouldn't bother with one for the e-fund. *ING makes a good parking spot for e-fund money. *The savings account rates are good and the short term CD rates are better still. *It's not too hard to get at the money but it's still segregated which makes it harder to spend than if it were in your regular bank account. *A portion of your e-fund is only for the big mishaps and so will not likely be touched so locking it into a CD isn't a bad thing - you can still get at it with the only downside being a small loss of interest.

You could also consider EE savings bonds but since these have a 1 year no-sell period you would have to ease into them. *Perhaps putting at most 10-20% of your e-fund in every year until you reached the amount you wanted. These have a big advantage of ratcheting up as rates increase (at 90% of the 5 year T-Bill rate).

Personally, I keep my e-fund split between a CD at my credit union (45%), money at ING (45%) and some stashed into my credit union accounts mostly as a float (10%).
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Re: Savings?
Old 07-09-2004, 10:20 AM   #79
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Re: Savings?

John...you forgot the "!"...!!!
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Re: Savings?
Old 07-09-2004, 11:12 AM   #80
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Re: Savings?

Quote:
So which mutual fund would you guys recommend as emergency fund?
What i said.... a money market mutual fund. near cd rates, totally safe (for all practical purposes), and you can write checks on it.
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