22 year old trying to start smart

[Joshua]

Welcome, and congratulations for getting yourself focused on this stuff early! Many people don't even pause to think about the kind of things you have mentioned for a couple more decades, and then it takes them much, much more effort and pain to realize a gain than it would have if they had taken things seriously earlier.

My only advice is to get as much knowledge as you can about your various options, and then form a solid plan about what you want to accomplish. Quantifiable goals are much more motivating than vague castles in the air. Once you know what you want, promise yourself that you will actually work to achieve it, and then be sure to reassess periodically if your current actions support your long range goals.

I don't know what your future plans are regarding moving out on your own, buying a house, starting your own family, or anything like that, but just remember that it is easy to get caught up in the moment and lose sight of long term goals if they aren't clearly stated and you don't have a good way to measure your progress. "Oh, this situation is different! I don't have a choice!" Uh huh. Yeah, you do. You can choose to be true to your own goals, or you can choose to bend to outside expectations and suffer for it for the rest of your life.

When you're just starting out, you can get carried away and convince yourself that you can do anything - meet your expectations, those of others, etc. But when you try to do everything, usually you accomplish nothing, so a specific set of goals is going to be your best helper in this endeavour. It will save you from the lies you'll try to tell yourself as well as from the manipulations of others who do not understand your goals.

Josh

[jayc]

Welcome. I would fund the roth ira to the max each year. This is a great tax free account and you will regret not taking the max allowed each year. Drain your emerg fund each year on 4/15 to fund the previous roth year max if you are short. Check out Penfed or your local credit union. Get a CD with the highest APR until you are better educated to other investments. Let compounding be your partner. Worst case is you will have principal + small return vs lost principal + fees in something you never understood. You can always withdraw principal for hardships.
Research and read threads on this forum for no nonsense real life LBYM investment advice that works.

[johnoh]

Of the many measures of wisdom, you are getting an A in the class that most people don't even realize they've enrolled in until they are 45. The difference is that in this class there is potential for an A, an A+, an A++, etc. So aim high. Sounds like you are.

Not sure if anyone has mentioned it but Warren Buffet once said the easiest strategy is to dollar-cost-average into a low cost index mutual fund over the course of your life. Doing it every couple weeks makes it easier than doing it in large lumps, because those large lumps put a lot of pressure on you to pick your entry/buy point.

Regarding emergency funds their are two types of people: those that will tend to make withdrawls and rationalize them, and those that will somehow find a way to avoid them. You sound like the latter.

Regarding marriage. Worst thing I ever did was marry someone who was financially self-destructive, who in retrospect probably chose me because I wasn't. Find the rare person who mirrors your unique tendency to build wealth, and be wary of the many persons who will want to benefit from it.

[-Jackson-]

Quote:

Originally Posted by Texas Proud When I was young... I was putting all my money into an IRA (now I know it was not the bet thing to do at the time) and did not have an emergency fund... but I have NEVER needed to use any part of my emergency fund... most people I know have not spent money from theirs..

I have made similar observations. However, I think this speaks more to the type of people who build and maintain significant e-funds moreso than it does to the usefulness of having one. A person who is likely to have a substantial emergency fund is likely to be a cautious person who plans things out and considers their choices. Going about your life that way will probably reduce the number of instances where you have unforeseen expenses. But it doesn't mean that an emergency fund isn't an important part of a sound personal financial plan.

BTW, I'm pretty new here (first post) and I think this forum is great. The OP has clearly got a good head on her shoulders and should be very successful with whatever she chooses to do.

(I just noticed this thread is a month old. oops. :-) )