Young Working Gal Here

[Sillysal]

Hi everyone. I am a 24 year old credit analyst at a small (TA=$250MM) community bank. I am currently nowhere near ER, but I'm working on it. My goal is not total retirement so much as mid-life career change. I would like to jump to adjunct or community college teaching.

I found this sight after reading an article on CNNMoney about a saver named Holly something. I went to her website and found the link for this forum.

Financially, I have quite a bit of SL debt ($26k), but I figure I'll never get another loan fixed at @3% again. I also have a $5k balance on my auto loan, which I will pay off by the end of this year. Currently, fiance and I each put 10% in 401ks. We are saving $700 per month toward home downpayment...we have qualified for some no-downpayment loans, but I feel better with an equity cushion. We have about 3 months expenses in an emergency fund and another $5k saved for the house so far. We are also planning for the wedding, which I plan on keeping as small, simple (& cheap) as possible.

 

[laurence]

Welcome and congratulations on getting it (financially) together at such an early age. I'm 30 years old (for 2 more months, yikes!) and my better half and I just got it together a couple of years ago. Always debt-averse but didn't think about investments. You'll hear this a lot but good reading:

4 pillars of investing
Money or your life
Millionaire next door

That's a great SL rate, it's tax deductible, my take is don't go agro to pay it off early. Every time you get a raise, up your 401(k) contributions, DW and I are now up to the legal max of 14k each. With matching we are putting away 32k a year just in that, and it wasn't too painful to do! Also, look into Roth IRA's, tax rates are historically low, and you want to have some tax hedging for the future. Most here feel you should invest in the 401k to the company match, max out Roth IRA, and then it's a 50/50 on maxing 401k from there or opening up after tax accounts.

RE: Roth IRA....Vanguard good! Psst! Wellington!

RE: Buying a house, what part of the country are you in? Housing bubble? Cheers!

 

[Sheryl]

Hi Sal!

Welcome to the forum and congratulations on getting your life together financially at such a young age.  You are definitely doing all the right things.  I don't know too many 24 yr. olds who would even think about the things you're planning and doing.

By starting to save at your age, and by not letting yourself get into credit card debt or no-equity mortagage you are certain to have a great jump on whatever you want to do in the future.

Keep it up!  If you hang around here you'll learn a lot, I sure have. 
(And not all of it about finance )

 

[Sillysal]

Thanks for the advice! Lawrence, I have read Millionaire Next Door, Millionaire Mind, and Millionaire Women Next Door.

Fiance does have a roll-over IRA (Traditional) with Vanguard. I really like the funds offered in my 401k plan, so I plan to max it, then do IRAs as income increases. With my plan, I am limited to 15% of my income, and at current income, that's nowhere near $14k.

I live in KY, and home prices here are increasing at a faster-than-historical pace (8-10% vs 4-6%), but I don't think locally we have a bubble. I am saving for a 3 bdrm, 2 bath brick house (@1400-1600 sqft) with a basement and/or garage and a 1/4 to 1 acre lot. I can get that here for less than $200k.

 

[JPatrick]

You really are doing good!!  You will find some real pearls of wisdom on this forum, but remember much of it comes from folks a good bit older than you   with different goals, hence different investment needs.
What  I'm leading to is that you should not be afraid of taking some fairly serious long term risks with the hope that over the next 30-40 years you can hit many homeruns along the way.
One way to do that is to invest in what you think are the most promising sectors by buying either ETF's and/or sector mutual funds rather than individual stocks.  Some you can hold for a very long time, while others you might want to switch out of occasionally. Stick with funds that have a track record.  Fidelity has about 40 of these most with a 10-15 year record.  Check them out and compare the results with indexes Etc.
Yes I like Vanguard funds as well, but they don't have quite the selection.

 

[wildcat]

Love to see the 20 somethings arriving and learning FP 101.

 

[Sillysal]

Is that as in Kentucky Wildcats? I noticed you don't like cardinals.

 

[wildcat]

Yes!!

 

[TromboneAl]

I wonder what the age of the youngest poster is.

Another recommended book: The Complete Tightwad Gazette.  If you read that book and follow some of its suggestions, you'll have at least an additional $200,000 by age 50.

And here are some good investment articles.

 

[Sheryl]

Al,
Thanks for posting that link. I always appreciate the references to good stuff on this forum, since there is so much bad stuff to weed through out there.

On a slightly-off-topic note - I noticed that 4 Pillars was at the top of Lawrence's suggestions, and I have been reading "at" it for a couple months now.

When I mentioned this to my pseudo-financial advisor (I only used him to buy some individual stocks before online trading became feasible) he'd never heard of it

It amazes me how many totally uninformed untrained "sales" people are out there calling themselves financial advisors.

But maybe we have beat this dead horse too long.

 

[Sillysal]

Thanks for that link Al! I bookmarked it. I thought I was doing a good job at diversification, but those articles made me think I can do better...

I know I've seen a poster younger than me! He wanted advice on how to get rich so he could buy a porshe or some similar fancy car.

Wildcat - Red isn't even allowed in my house. What part of the state are you from?

 

[wildcat]

Well I am not from KY originally but we moved to Lexington when I was 10. Born in NY and lived in Chicago area prior to that. But I am die hard UK and it is my alma mater. Moved away to do my MBA but I still keep up.

Sillysal has me beat by a few years in age but I am happy to see young people trying to make it.

 

[laurence]

All you really young people make me feel like an old loser for not starting sooner!

 

[riskadverse]

Another Wildcat here - UK class of '69

 

[Honkie]

And here are some good investment articles.

Thanks for the link. Only skimmed a few of the articles but this one caught my eye. Vanguard diehards will like it.


http://www.fundadvice.com/FEhtml/PsychHurdles/0101b.html

 

[wildcat]

Wow that makes 4 fellow Cats.

 

[KB]

Laurence......you are WWWAAAAAYYYYYY ahead of most of the people. You'll be fine.

 

[wildcat]

Yeah Laurence is my young but older hero

 

[laurence]

LOL! As long as I'm not Darth Sidious to your Darth Vader! (Geek alert! Whoot! Whoot!)

Glad we have a lot of young dreamers on the board. It's very encouraging and inspirational to read the posts of those who have made it, but it's hard to relate when one is still languishing in purgatory!

 

[wildcat]

but it's hard to relate when one is still languishing in purgatory

I hope I spend a short time in purgatory and get out for good behavior. Laurence, you are kicking ass even if you feel like you got a late start.

 

[BUM]

Hi Sal,

I've said it before... you (20somethings) have a power that many of us here don't. Time and a wellspring of helpful information. Use it. Be sensible. With just a tiny bit of luck, you can't lose.