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u/DragonJoey3 · 16 pointsr/personalfinance

Caution: Wall of text to follow.

Firstly, congrats on caring at a young age about your finances. That's something not a lot of people can say. With that being said I'll like to take each of your paragraphs in turn and answer your questions at the end.

NOTE: If you just want answers to your questions and not my advice skip ahead.

> While I believe that there are some truths behind "Money doesn't buy happiness", it is a lot easier to be happy knowing that you are well-off.

As a word to the wise from someone a little further down the road let me just say there is more truth than you yet realize in those 4 simple words. Many people don't come to see the truth till their old age looking back on a life filled with regret, so take some time now and seriously contemplate it, because the reality is in 85 very short years you'll likely be dead, and all you ever had will belong to someone else. If the only happiness you get in this life is seeing dollars in your bank account you'll miss out on a lot.

> The leading cause of divorces are because of financial issues. I mean, that has to speak for something.

In the vast majority of divorces it's not a lack of money that's the problem, it's a lack of agreeing on what to do with the money that is. Marriage can work below the poverty line, and above the 1% line. The financial issues of marriage aren't solved with just "more money!"

> I want to be able to support myself, other family members who aren't as well off, and be able to buy my kids (if I have them) a car, pay for their college funds, etc.

Supporting your own family is honorable, but beware when helping out "less fortunate" family members. There are many, many problems that can arise from that if not done properly, and enabling a family member will only make their situation worse, not help them.

> I don't want to be a doctor. Or a lawyer. . . . . who can bank at least a million in one year.

That is a very big dream, but it's not unrealistic. Big dreams are good, and as long as you can approach them level headed they help give you focus. I say that your dream is worthwhile, and although I caution against greed as it can destroy you and your life, there is nothing wrong with wanting to be a CEO making $1,000,000.


> So tell me. Where do I start investing and also building my way up to becoming the CEO of a company?

You start right where you are. There is nothing stopping you from pursuing your dream now. Begin with learning. Learn what it takes to be a CEO, learn how other CEO's have done it, learn what your talents are. There will be much learning for you starting out.

I recommend the internet and a library card. Read a CEO's biography (it's as close as you'll come to getting to interview some CEO's). How is it that Donald Trump was able to go from rags to riches twice?! What would it take for you to do that? Learn all there is to learn about running a business, being a leader, and leading a successful venture.

> At what age?

NOW! Bill gates was already writing software and starting Microsoft at your age (not to say you're behind or anything like that.) There is no age limit on being a CEO, and there is certainly no age limit on learning and working hard.

> What majors in college should I be looking at?

This will be up to you and what you feel you would be good at. Do you want to be a CEO just to be a CEO, perhaps some business major then? Learn from other CEO's stories and what they majored in.

> And at what colleges?

Personally there is little impact based on what school you choose. There are CEO's that never went to college, and there are CEO's that went to Yale/Princeton.

The fact is it takes maybe $200 to start an LLC and call yourself a CEO, no college degree needed. What comes after that is actually making the money! In order to do that you have to provide a good or service that people want. The more people you make happy, the more money you'll get.

Something you should know now is that starting a company, and running a company is HARD WORK. I know some owners of start-ups that had to work 60 - 90 hours a week with little to no sleep to build their business. I know others who fell into the CEO position because their daddy owned the company, and they were lazy, and thanks to their lack of action the company collapsed.

> And of course, looking to do this in a legal way.

Welcome to America :), where hard work, sacrifice and the willingness to learn and strive can and do payoff.

One last piece of advice: Don't be a jerk. When you become the CEO of a company and you are making the millions, when you someday are the hotshot, don't look down on those around you. Remember where you came from, and those that helped you along the way, and there will be those that will help you!

People will always respond better to someone who is nice than someone who is a jerk.

Here is some recommended reading once you get that library card:

  • Start by Jon Acuff

  • EntreLeadership by Dave Ramsey

  • I will teach you to be Rich by Ramit Sethi

  • The millionaire next door by Thomas Stanley

  • The seven habits of highly effective people by Stephen Covey

    There are many more books, but that's a start.

    Jon Acuff went from amateur blogger to best selling author, and is a great motivational writer. His books make me want to run a marathon, and are good for motivating you.

    Dave Ramsey went from bankruptcy to running a 300 person business and earning in the %1 of earners in the nation with a national brand. His book is about being a leader in business and you'll need to lead if you want to be CEO. It's a hard job, and not nearly as cushy as you might think.

    Thomas Stanley is a researcher who studies those with a net worth over $1M and his book will show you that being rich doesn't contradict with a frugal lifestyle.

    The others and highly recommended in general!

    The fact is you'll need to grow up, turn off the TV, and look weird to your friends. How many 15 yr olds do you know reading books about how to run a company and studying up on what it takes to be a CEO, or how to start a business? I don't know many, but I do know that at 17 years old William Gates III started a joint venture with Paul Allen (their first business). They both went on to make the top 20 richest billionaires list. Bill still holds the top spot.

    If you want to be rich, you want to be a CEO, then work at it. Work at it now, work at it often, and work at it always. I have no doubt if you dedicate yourself you can do it. The fact of the matter is that most people reading this are tired just thinking of the work it takes to be CEO, and that's why they never will be.

    Best of luck on your future success, and don't forget the little people.

    ~ Dragon J.

    Edited for formatting.
u/ataripixel · 3 pointsr/personalfinance

First, I feel like I was in the exact same place you were when I was 15, back in 1997. However, I didn't listen to my parents when they gave sound advice about saving and investing. Luckily, I managed to turn things around by the time I was about 25. Now, I've got over $200K invested and saved and my wife and I just got back from an eastern Europe road trip over the xmas break and didn't have to think twice about money. We still make a budget for everything and spend as little as we can.

Here are the 4 pillars of finance. They are all equally important and you need to know what part they all play.

  • Banking
  • Savings
  • Budgeting
  • Investing

    This book will be a great introduction for you. You can get it used on Amazon for $10, or better yet, try to find it at your local library, or your school library.

    When I was 15, I made minimum wage by working at a fast food restaurant, great way to get money. I usually spent all that money on taking my girlfriend out on dates to restaurants and movies, and on gas for the car and the car payment itself. It will be difficult, but staying single will save you a lot of money. Or, splitting the bill on dates will at least help. If you have to buy stuff, try to buy it used. The best way to accumulate money is to only spend it when you absolutely have to.

  • You don't need an awesome car, just a cheap one that will get you around or a bike if your town is conducive. Take the bus, or car pool with friends as much as you can to save on gas.
  • If you're out with friends, don't spend money if you don't have to, or at least only spend a little on cheap stuff, like just a cheeseburger and water, not the $8 value meal. Your friends may look at you weird now, but they'll look back on it later and see how smart you were.
  • You don't need awesome clothes, so don't waste your money on that. Same goes for gadgets, or at least try to buy them used, only if you must have it.
  • Stay home as long as your parents will allow, even in college if you can.
  • Before you start investing, become familiar with investing. You can read all you want for free at Investopedia. They have great videos too. The Motley Fool is not a great place for beginners, but this page is ok. Seriously, don't read anything else on that website, it's mostly BS.
  • I'm not trying to ruin your childhood with these suggestions, but there are tons of free things you can do with friends or inexpensive things. You don't have to spend money to have a good time.
  • Ask your parents if there are things you can do around the house for allowance. Ask them if they will give you your week of lunch money up front and let you keep it, even if you spend it on bread and lunch meat and take a sandwich everyday. Save that left over money! DON'T spend it on crap foods and candy in vending machines. It's not "extra" money to waste, it all adds up.

    As you get older:

  • Credit cards can deplete you of all your money, very fast. DO NOT GO INTO DEBT. If you do get a credit card, do not use it unless you have the money to pay it off right away. This will ruin your life, not kidding. No amount of rewards points or "cash back" is worth going into even $1 of debt. When I was 15, I couldn't get a cell phone plan unless I had good credit. However, they did let me get the account if I could pay a deposit of $150. Hopefully, your parents will do this for you though.
  • If you don't get a scholarship and your parents can't pay for college, DO NOT GO INTO DEBT by taking out student loans. Go to a local state college or community college and try to pay your tuition with cash. You might miss out on some of the cultural aspects of a university, but you'll still get your education and I've never been turned down for a job because I went to a community college instead of an expensive university.
  • Once you've read up on the basics of investing, read this book, you can get it used for under $5 or free at your local library.
  • Another great book that taught me a ton about accumulating wealth is The Millionaire Next Door. It might not all make complete sense right now, but it will demystify what it really means to be rich.

    Wow, this post got a little long winded. I've got plenty of other advice information that I've learned over the years. I'll try to post it later when I get a chance. Last bit of advice, as for investing, take your time, don't be in a hurry. Make sure you know what you're doing before investing your money in anything. Good luck!

    Edit: I just read the bit about you living in Finland and having free school. Rock on! I'll leave the advice about student loans and community college for others.
u/RDMXGD · 2 pointsr/personalfinance

You own shares of mutual funds. A mutual fund is a group pool for owning stocks and bonds. The number of shares you own of the funds does not grow other than (the number might change, technically, but this is not a means of making money, but just an accounting detail), you but the value of each share you own goes up. Obviously, you get more shares when you contribute to your 401(k).

Stocks are pieces of companies. They make money by becoming more valuable over time and lose money by becoming less valuable over time. (They also sometimes distribute some of their profits directly, though not all companies do this.) The value is established by the market--what people are willing to pay. They go up and down constantly. Although you can think of the growth like interest in a lot of ways, it's not like an interest-bearing account where the value goes only up with time.

Bonds are essentially IOUs. Someone gives a bond issuer (a national or local government or a company) some money, and the issuer agrees to pay it back at a certain rate of interest over a certain amount of time. There is a chance they will default--not be able to pay back everything they agreed to. If they are trustworthy, the interest rate is very low. If they are not trustworthy, it's higher (but there's a better chance they will default). The value of a bond goes up and down as the assessment of their trustworthiness changes and as the world changes.

Within the mutual fund, the reason you get growth is either that they own more valuable assets or they own assets of similar value but more of them, depending on what the fund does with their gains. Each mutual fund you own shares in has a dedicated staff to do whatever it is you do. Traditional funds employ people who try to make smart decisions and charge you more. Increasingly popular are index funds, which try to diversify over an entire market and have much lower fees.

It is very much worth learning about investing, as it is what will enable you not to have to have a job to get by. is a book many people recommend.

^Pedants ^of ^reddit: ^you ^can ^own ^things ^other ^than ^mutual ^funds ^in ^a ^401(k), ^mutual ^funds ^can ^own ^a ^small ^number ^of ^cash-equivalent ^securities ^that ^aren't ^stocks ^or ^bonds, ^and ^some, ^rare ^mutual ^funds ^pay ^dividends ^(which would probably be used to purchase more shares) ^. ^I ^decided ^for ^simplicity ^to ^assume ^(reasonably) ^that ^OP's ^401(k) ^was ^in ^absolute-return ^stock/bond ^mutual ^funds.

u/kajsfjzkk · 9 pointsr/personalfinance

\> This is not a financial problem, this is a trauma problem.

Perfectly said.

OP, in therapy you can talk about your experiences growing up with financial worries. A good therapist can help you explore how those experiences affected you and help you identify the narratives you tell yourself as a result.

It sounds like the financial hyper-awareness has actually served a very useful purpose for you so far. You did well in school and worked your way into a good career. But there's a saying: "What got you here won't get you there." Now your anxiety around finances is holding you back, and you would be better served by spending less energy worrying about finances while still putting a plan in place to responsibly manage your finances.

A therapist can also help you retrain your thinking. Cognitive Behavioral Therapy is one type of therapy which is aimed at retraining negative automatic thoughts. You identify negative thoughts and write them down, then apply techniques from the CBT toolbox to understand why those thoughts are distorted and replace them with more adaptive thoughts that better reflect reality.

The key point is that your brain won't let you simply choose to stop thinking a negative thought, because there's usually a kernel of truth. You need to replace the negative thought with a new thought that also true but is more adaptive.

So for example, when you think:

\> I'm suddenly gonna lose all my money at the blink of an eye

You can write that thought down, then look at a list of cognitive distortions and identify things like "all or nothing thinking" and "jumping to conclusions". From there you can identify potentially useful CBT techniques. Some techniques work better for certain types of cognitive distortions. So you might try techniques like exploring "What's the worst that would happen? How would I need to react if I actually lost all my money?", or you might try keeping count of unwanted thoughts to make yourself better at noticing them as they appear. There are dozens of techniques.

I'll note that studies have actually shown that CBT from a book can be just as effective as CBT with a therapist. I'd recommend finding a therapist if you're able, because they can help in ways that a book can't. But it's worth mentioning for anyone who isn't able to see a therapist, or isn't sure whether their therapist is any good.

You can just open up the book, start reading, and do the exercises. The key is that you can't just skim the book. You have to actually do the work and write down your answers.

Here's a good book on CBT:

Here is a good blog post on how to find a therapist:

Finally, one way to feel more in control is to learn more about managing your finances. I'd recommend reading a good book on personal finance, like this one:

And then I'd recommend writing out an "investing policy statement". Basically it's a written statement describing your financial goals and long term plan of how to attain them. You're effectively writing instructions for your future self. This can help put worrying to rest. For example, you can consult the statement to remind yourself that you planned to save $___/month toward a house and $___/month toward retirement. If you are meeting your goals, you shouldn't feel guilty about spending money on things you enjoy.

Here's a blog post describing an investing policy statement:

u/johnsmithindustries · 7 pointsr/personalfinance

Me too! For a little motivation, check out Mr. Money Mustache and Early Retirement Extreme. For some really good information, check out Get Rich Slowly and The Simple Dollar - both have extensive archives on frugality, saving, investing, and debt repayment. I read all of those every day.

Here are some basics:

  1. Start an emergency fund in a new savings account with 3-6 months of expenses. Don't touch this unless there is an emegency (job loss, car repairs, etc.). This will keep you from aquiring any debt and allows you to be bold with your savings/investment goals.

  2. If your employer has a matching program for your 410K, contribute as much as you need to get the match. This is FREE MONEY and as a bonus your contributions reduce your taxes for this year.

  3. If you have any high-interest debt (~7+%), pay it off. If not, start a Roth IRA and try to max it out every year ($5000/yr). I recommend low cost index funds or a Target retirement fund (aka "lifecycle fund") with a low expense ratio. Because contributions to Roth IRAs are from after-tax earnings, this money will grow/remain tax free for the rest of your life.

  4. If you have any other debt, pay it off as fast as you can using a debt snowball.

  5. If you have any left over, contribute the maximum you can to try and max out your 401K ($16500/year) - the more you contribute, the more you save on your taxes this year.

  6. Save, save, save. With your goal you need to save as much of your income as possible. If you can max your 401K and Roth every year, you'll be well on your way to financial security. But those are your retirement savings, and you won't be able to utilize them for a while. So your best bet is to save and invest a large portion of your remaining income - this will ensure that you will not have to take on any additional debt and can save thousands if not hundreds of thousands along the way (think paying cash for a house vs. a 30 year mortgage)

    ERE and MMM both are into frugal lifestyles combined with established passive income streams from real estate and investment earnings. That seems like the way to go, especially given the low prices for real estate and the increase in renting.

    I would also start reading on these topics. For an eye-opening motivational read, try The Millionaire Next Door - I recommend that to everyone regarless of their personal finance goals. For starters in investing, The Boglehead's Guide to Investing is great, and a lot of the information can be found free at the wiki. GRS has a great post from a while ago on the 25 Best Books About Money.
u/ricksebak · 2 pointsr/personalfinance

> 1. what are your recommendations for budgets for beginners? The ones on the wiki are slightly confusing to me

The main thing is to spend less than you earn. Certain exceptions for mortgages or college can be okay, but understand what you’re getting yourself into. If you feel like a more detailed budget with specific allotments for food/transportation/etc helps you, that’s fine, but spending less than you earn is the important part.

> 2. Any books/videos I should read/watch to get a good idea? I've watched a couple of people like Graham Stephan but that's about it

The Simple Path to Wealth by JL Collins. He wrote this book for his own daughter when she was starting her adult life. It covers the basics of investing, 401k’s, all that stuff, but also higher level concepts like why you should even care about personal finance at all.

> 3. I'm looking to open up an online bank account, credit card, and ROTH IRA soon and would appreciate which cards/index funds to go for vs which ones to avoid (I will be in the States)

Online bank account - whichever one offers the best combination of a high interest rate and convenience (ATM’s in your area, etc). Just google around.

Credit card - Given that you’re young without a credit history, the best credit card will probably be any card you can get, preferably one without an annual fee. Every credit card has a high interest rate, so be careful with it and pay your balance in full every month. If you pay the full balance then you won’t pay the high interest rate (or any interest). If you mess up and pay late or don’t pay at all you’ll damage your credit score and hurt yourself down the road (mortgages or other loans will be harder to get, and more expensive if you can get them at all).

Roth IRA - You can only contribute to this if you have earned income from a job, and cannot contribute more than you earn in a year. Assuming you have earned income, open a Roth IRA with Vanguard and invest it in VTSAX, which is a mutual fund containing small parts of the top 3000 company stocks in the US. You need at least 1k to start. You can contribute automatically every month or every pay day if you want. And the maximum allowed is 6k/year.

u/Leonardo_Da_PinchMe · 1 pointr/personalfinance

The best place to start if you really want to get into investing is the classic, "The Intelligent Investor", by Ben Graham (he has another book called "Security Analysis", but it's very dense and some of the info in it is pretty dated, even though it has been updated a bunch of times). Graham was the mentor for Warren Buffett, who, if you don't know who he is, is widely regarded to be one of the greatest investors ever. The book has been around for a long time and has gone through a number of editions, but the principles have stood the test of time. Also, there was an edition that was updated by Jason Zweig, a financial writer:

A caveat though: if you want to be very successful at investing, it requires fairly serious commitment, with regularly staying current on the state of your portfolio, going through financial statements, (not as hard as it sounds, but it requires learning and discipline), and understanding the economic environment the companies you're investing in are facing. And maybe more important than any of that is discipline; it takes a lot of guts to make decisions when your money is involved and you're sometimes going against the crowd.

The other two resources I would check out are, The Motley Fool, who generally put a lighthearted and fun spin on investing, but also take a value based approach (not strict value investing, but they are focused on company fundamentals more than typical Wall Street chatter). And Index Funds: If it turns out that you don't want to spend time every week reading financial statements or, at the bare minimum, Value Line reports, Index Fund investing is a great way to get into the market in a highly diversified way that doesn't require the same rigor that individual stock investing does. (Also, look at ETFs with regard to Index Funds, as they tend to be lower cost than investing in the fund itself -- Exchange Traded Funds are basically mutual funds you can buy like a stock, as opposed to traditional mutual funds, which you invest in by opening an account with the mutual fund company itself).

u/moveovernow · 3 pointsr/personalfinance

Read these books, in this order:

Buffett: The Making of an American Capitalist

The Little Book That Still Beats the Market

Margin of Safety (only available in free PDF now, out of print)

Common Stocks and Uncommon Profits

The Intelligent Investor

They'll teach you what's called value investing. As a system it was approximately originated by Benjamin Graham, Warren Buffett's mentor. It's the only system of investing that has been shown to consistently work over an extremely long period of time (nearly a century at this point) and anybody can learn to utilize it.

The first book will give you a close-up walk-through of value investing by following Buffett from his earliest days forward, including how he thought about investing (the most important aspect). That'll prime you to more easily be able to understand and digest the next value investing books. Once you have digested enough about value investing, you'll be able to adapt its ways to the things you're particularly good at (there are various styles or approaches to value investing; the best at it all use slightly different custom techniques in how they find stocks, what kind of levels of value they require before they invest, when they prefer to sell or not, risk tolerance, etc). As a system it's fundamentally built around logic / reason as the primary tools of appraising investments and making decisions, it encourages you to push emotion out of the equation of investing as much as possible (and in doing so, you automatically acquire a dramatic leg up over most investors big and small).

Of critical importance: value investing is not about producing small conservative returns. The best value investors have smashed the market's average returns over extremely long periods of time and they have tended to beat all other types of investors. Value investing is about: 1) not destroying capital, so that you can retain and compound it, taking maximum advantage of the extreme power of compounding returns; 2) picking investments that have an appropriate margin of safety (they've been significantly mispriced by the market), that protects your downside, while exposing you to a very large potential upside.

u/nostratic · 1 pointr/personalfinance

a credit history means that someone lent you money and you paid it back. that's it. it's not mysterious. if you made responsible, on time payments you have a high credit score. if you were not responsible, you have a low credit score.

your credit score can be important. but don't make your credit score the most important thing in your life.

someone else asked another question here today, bragging about their 800+ credit score ... yet they spent $19,000 on a new car when the value dropped to about $15,000 the minute they drove it off the dealer's parking lot. they were so focused on the credit score as a sign of success that they didn't care that they'd thrown $4000 down the toilet with the purchase of a new car that depreciated in value so much so fast. this is a perfect example of what I mean by not making your credit score the center of your financial life.

something like 25% of Americans don't have credit cards, so it's not that unusual, really. I have 1 card that I use only for Amazon purchases, netflix and my phone payment. this gave me a good credit score, but that wasn't really my intention. it was just a side-effect. I had some trouble with online purchases and Amex has a good history of helping resolve disputes.

you can get a mortgage without a credit score, you need to find a place that does what's called "manual underwriting." this means they personally verify your job history, payments to landlord, etc, rather than simply relying on your credit score.

i guess what I'm saying is be careful and think about what you're doing. don't simply listen to your friends, who are probably broke, tell you how important and sophisticated they are by 'building their credit.' the truth is that people with high wealth, lots of money in the bank and investments, actually tend to avoid debt. see this book for more details:

u/jazybp · 2 pointsr/personalfinance

Taking on the advice that everyone else here has shared like consolidating credit cards into a 0% one for 12 - 18 months and trying to negotiate a payment plan for your hospital bills is a good idea.

As others have mentioned, you need to have a budget and be able to stick to it. Have you taken the time to go through your last 3 months of bank statements and work out where your money is going? That's the only way to identify areas that you can cut back. I'd categories them as:

  1. Must have: Without these, you really would be in a bad place... (e.g. rent, critical bills, groceries and basic clothes)
  2. Should have: Without these, you lose some key comforts but you can get them elsewhere for free but more effort (e.g. broadband [you could go to a public library], running a car)
  3. Nice to have: Without these, you'll sacrifice a nicer lifestyle (e.g. going out for lunch, nice clothes, new gadgets, gym membership, Spotify subscription)

    Then look really hard at each item in those categories, even the must-have (e.g. are you living in a bigger apartment than you need? Do you shop at a fancy grocery store as opposed to a more affordable one?) to see where you can make cutbacks. The only way to get out of debt is to spend less than you earn, use what remains to clear it.

    There are plenty of tools out there to help you, like Every Dollar and YNAB. Also worth checking out podcasts by the likes of The Minimalists and reading Your Money or Your Life, which offer very practical advice.

    In terms of tackling the debt, you have 2 options:

  • The mathematically smart way: Start paying off as much as you can on the debt with the highest amount of interest
  • The rewarding way: Pay off the smallest debt you have (e.g. your $1,000 credit card), then work on the next smallest, adding on your previous payments so they snowball into bigger ones. This is more rewarding, as you see debt disappear and you feel a sense of progress.

    All the best with your situation. You can do it, your debt is definitely not insurmountable, you just need to be disciplined and make some sacrifices to clear it.
u/robindy · 1 pointr/personalfinance

Hey There,

This might get lost in the reply avalanche, but if nobody has mentioned "I will teach you to be rich" yet -- I'd definitely encourage you to check it out:

It's one of the best personal finance books I've ever read and really think it's applicable across the spectrum of budgets. Think if you go to his website, he's got a lot of content and PDF's up for free and if you don't wanna spend the money and buy a physical copy, I'm sure you can get it from your library -- or you could do a one month free trial on audible, download the book and then make sure you cancel before your membership renews.

I found it to be an incredibly accessible and helpful book. Hope it helps!

u/sylvan · 1 pointr/personalfinance

> I'm pretty clueless when it comes to direct investing, but I'll look into it. I really don't want to micromanage this stuff, but I'm willing to learn the direct investing route if it's a substantial gain that is worth my time. How easy did you find it to get into that? How much time investment is there to establish such a portfolio and bonds?

I think for any reasonably intelligent person, it's very easy. Again, I recommend sticking to what is generally considered the best option for us "regular folk": passive investing in index funds. That means choose a balance of index funds (eg. US, Canadian, and International markets, and bonds), and keep contributing over time. Every 6 months or so, rebalance to make sure your holdings are keeping to your planned ratio.

I highly recommend reading the Canadian Couch Potato blog mentioned above, and the book The Bogleheads' Guide to Investing.

Opening accounts at TD Waterhouse or QuesTrade is just a matter of filling out a couple forms, and the actual act of investing involves transferring money from your bank account to your trading account, then using their web interface to purchase the funds you've chosen.

By doing a little self-educating and going with low-MER index funds, you'll save thousands & thousands of dollars over the years that higher priced mutual funds would have charged you for administration.

u/110_115_120 · 3 pointsr/personalfinance

Congratulations on your achievement! Here are my responses to your bullet points:

  1. Track your expenses, if you aren't already. Use something like Quicken or Mint. This is important, because as explained by the book "Your Money Or Your Life", it will help you focus your spending on things that are truly important to you, rather than squandering your money (or life energy) on things that are of little value to you.

  2. The way the power of compounding works is, the earlier you start the greater its effect will be. So yes, you absolutely want to start as early as possible and stuff away as much as you can. Those early dollars will grow far more than dollars you put in later.

    > It seems scary to invest all my retirement money and potentially losing it all.

    The risk with "safe" investments like CDs and bonds is that they probably won't keep up with inflation, and you may not end up with enough savings to live on during retirement. While the stock market can be volatile over the short term, over the long haul (30+ years) it's proven to be pretty safe and capable of generating the high returns that you'll need to support your post-retirement.

    Normally the advice for retirement contributions goes like this (in the following sequence):

  • Contribute to your 401k up to the point of the match

  • Contribute to your ROTH IRA

  • Max out the remainder of your 401k contributions

  • Invest in after-tax accounts (if so desidered)

    Given your high salary, you may fall into the ROTH IRA income phase-out range depending on what your mAGI ends up being. You can always do a backdoor ROTH IRA, but that might be too advanced for you to deal with as a new worker.

    What I would do in your case is probably the following (and it's basically what I'm doing since my income is similar to yours):

  • Max out your 401k. You'll want to focus on index funds with low fees, and include large company (S&P 500), small/med company, and international funds in your portfolio.

  • Do your taxes early next year and determine how much you are eligible to contribute to a ROTH IRA for 2013, and make that contribution prior to the IRS deadline (you can make contributions to your 2013 IRA up to the tax return deadline). If it isn't much, consider doing the backdoor ROTH IRA contribution for the remainder amount.

  1. Keep 3-8 months of expenses in a liquid (cash savings) emergency fund.

  2. RSU is basically your employer giving you stock over a certain period to provide incentive for you to stay with them. So every year, you'll probably receive (or become vested in) $16k worth of company stock. After 5 years, you'll own the entire $80k. At least that's the way I think it works; I've never worked for an employer that offered it. I would probably sell the stock after I receive it so as not to have too much of my portfolio in one basket, and use the proceeds to purchase index funds or invest in other financial goals.

  3. If you're willing to list the funds available to you within your 401k, and their associated fees, we can help you choose the ones that we think are best fit for your retirement plan.

    EDIT TO ADD: Since your ability to earn an income is your biggest asset right now, be sure to protect it with appropriate short term and long term disability insurance. More young people have life insurance than disability insurance, but statistically speaking, they are more likely to become disabled than die before the age of 65.
u/harrison_wintergreen · 4 pointsr/personalfinance

I think that sort of forgetting about the inheritance is maybe the best thing you could have done.

most inheritance is wasted.

you knew you were over your head, so you did nothing and went about your life as normally as possible. many people wouldn't have the discipline to do what you did. they'd have bought a new BMW, flown to Cabo 8 times, etc. and now they'd have only $15k left and be kicking themselves wondering where it all went.

I think you're trying to honor your grandmother's memory, and don't want to screw it up. is so, that's the right attitude. and I think you have the right foundational skills. you also live frugally, you made wise choices with your education etc.

if you want to visit a financial adviser, I'd recommend a few things.

  • first, shop around. visit multiple people until you find someone who makes you feel comfortable.

  • second, look for someone who is more a teacher and less a salesman. they shouldn't bully you, pressure you, or talk to you like you're inferior. they should use their education and expertise to give you advice and help you decide. don't do something simply because an MBA tells you. do it because you understand it and think it's a good idea.

  • keep it simple. one of professor thomas stanley's findings (see below) was that most wealthy people have investment strategies of almost brutal simplicity. they don't go for the fast buck, get rich quick. they invest slowly, steadily and consistently over a period of decades. they rarely invest in anything other than mutual funds and property.

  • finally, don't mention that you're sitting on half a million during the first consultation or two. you want someone who's gonna give you good advice, respect your time and goals, and take you seriously as a client, whether you've got $4000 or $4million to start investing.

    > She was by no means living a fancy lifestyle

    most millionaires are actually very frugal. you might want to go to the library and see if they have copies of Thomas J Stanley's books. he was a professor who studied finance, specifically high-wealth people. he basically found that you can either be rich (lots of cash or investments) or you can look rich (fancy lifestyle, cars, etc). many who earn high incomes are actually broke, because they're spending all their income on status items, high-end new cars, huge houses in upscale neighborhoods, boats, etc. they're so busy trying to look rich that they don't have cash left over for savings and investing. in contrast, people like your grandmother are truly wealthy specifically because they lived modestly, didn't care about impressing anyone, didn't go to the country club, and made a priority of building wealth.

    his first and maybe best known book was "The Millionaire Next Door." one of his findings was that there were more millionaires in blue collar/middle class areas than in upscale/white collar areas. why? because doctors and lawyers etc are under more pressure to live a fancy lifestyle. nobody expects a farmer or a plumber to drive a BMW and send their kids to private school. so if a farmer and a lawyer both earn good incomes, who's actually more likely to save and invest? That's right: the farmer.

    I also like his book Stop Acting Rich.

    and stanley's website. he died only last year.
u/racl · 1 pointr/personalfinance

I’m really glad that you’re being honest with yourself, introspective and detailed with your relationship with money. There are a lot of fantastic recommendations already so I won’t belabor the point.

However I’d like to recommend two books that may be of great use for you:

  1. Your Money or Your Life by Vicki Robbins ( The other posts in this thread have great tactics and suggestions that I wholeheartedly agree with.

    In addition to implementing those tactics, I would encourage you to read this book which does a wonderful job of also adding more logic, data, perspective, “oomf” and meat to the feelings of “this has to stop” you currently have. It’ll be a book that helps your attitude stay changed if you are tempted to relapse.

  2. I Will Teach You To Be Rich by Ramit Sethi. The title is rather flamboyant and lame. The content is not. Ramit is a Stanford grad son of Indian immigrants who takes a no-nonsense and often hilarious attitude to writing about getting your shit together when it comes to personal finance. It has a fantastic list of tactics, strategies AND philosophical frameworks to think about money contained in it. Really worth the read. Get the 2nd edition (recently released) since it has about ~80 new pages of content that covers some of the newer fads (e.g., roboinvestors like Wealthfront and the like).
u/[deleted] · 2 pointsr/personalfinance

Keep liquid how much ever you feel comfortable having at your bank based on your particular lifestyle, needs, and reasonable risk assessment. You know your life situation better than anyone, but people here are happy to help.

As far as investing, once you feel you're ready to start putting extra money towards retirement (beyond, for example, 401(k) paycheck contributions), there are several good places to put investment money, Vanguard is just one (but a very good one that I happen to use). Schwab and Fidelity are other good ones that typically come highly recommended. When do you start to invest, this sub's FAQ has good info and I'd also highly recommend the Bogleheads' wiki and the book The Bogleheads' Guide to Investing.

EDIT: Better book link.

u/unmarked_sandwich · 4 pointsr/personalfinance

if you want to be rich, do what rich people do: avoid debt, avoid status spending, save and invest a large percentage of your income, and be sort of a tightwad. read this book. it explains how wealthy people actually live. it's one of the best books I've ever read in my life; the culmination of the author's decades of research (he was a professor who studied financial habits). basically he found that truly wealthy people (money and investments and property) have different habits from the popular conception of "wealthy". truly wealthy people don't buy new luxury cars, Rolex watches, etc.

so my advice if you want to be prosperous is this:

  • get rid of the car. prosperous people do not buy used cars. new cars depreciate in value. in a few years that car will be worth $10k but you'll still owe $14k on the loan. if you want to prosper, do what rich people do: buy a quality used car, and pay cash for it.

  • you didn't mention savings or investment. general rule of thumb for rich people is they've consistently invested a substantial chunk of their income day in and day out for their entire working careers. 10% or more is standard.

  • for example: if you invested half of that weekend fun money, it'd grow to over $400,000 in 30 years. if you also invested another half of the restaurant money, it'd push you over $500,000. double-check my numbers here: EDIT: forgot to mention that this assumes an average of 10% annual growth rate; this is very realistic as the US stock market as a whole has grown an average of about 10% a year over the last century. there are plenty of mutual funds that have this kind of track record, or slightly better.
u/ArnoldChase · 2 pointsr/personalfinance

IF you are trying to maximize your rate of return, you should be maximizing your 401(k) contributions up to the matching limit. Otherwise, you are passing up FREE GUARANTEED money. You can then invest this money in a low cost index fund offered by your plan administrator by using dollar cost averaging. The bottom line is that if you really are solely motivated by getting the highest rate of return, you should be maxing out your contributions to your 401(k), but only to the matching limit.

After reading all of your posts here, I think that you need to be honest with yourself about your motivations with this money. If you just want to play around in the stock market, that's fine. But know the difference between "maximizing returns for the long run" and playing in the stock market.

Don't get me wrong, I have money that I invest in the stock market that is separate than what is in my IRA/401(k). Some money I do not feel comfortable kissing good-bye until I'm in my 60s. I sense that you feel the same way. But you have to realize the consequences of not putting that money away (i.e. paying taxes on capital gains AND giving up FREE MONEY through contributions.)

So in the end, if you seriously want to maximize returns in the long run:

  1. Max out 401(k) contributions to the matching limit, then
  2. Max out a Roth IRA to the contribution limits, only then
  3. Invest via a traditional taxable account.
  4. Use dollar cost averaging in those accounts to buy low cost index funds as repeatedly recommended by Warren Buffett or, if you want to put in more time to your investing, read The Intelligent investor by Ben Graham as repeatedly recommended by Warren Buffett.

    Best of luck!
u/twocoffeespoons · 5 pointsr/personalfinance

I make about the same as you, only I've been in the situation for a year longer, and I definitely shared the same anxieties about my adult financial life as you.

Two pieces of advice: First - Read I Will Teach You To Be Rich. You can find the PDF online for free somewhere. Don't worry, it's not one of those sleazy get rich quick books. Instead it's a very level headed go-to guide to set up your financial life. It's been a huge help. Listen to the part about setting up a second savings account that automatically deducts a small amount ($50-$100) of money from every paycheck. It's an idiot-proof painless way to save.

Second, you're still young. Sometimes on this board it's easy to forget that twenty-something's with six figure savings accounts aren't exactly common in the real world. Don't forget to stay calm and try to have some fun. I went through a period of penny pinching every expense. All of my friends were buying nice clothes or going on trips to the beach while I sat in my apartment eating Ramen. As you get older the chances to ride off to the beach with friends or rage at the best music festivals become fewer and far between. Don't forget to enjoy yourself.

u/grasshoppa80 · 1 pointr/personalfinance

To first answer question above, sounds like they invest in company but you have every right to re-balance as suited. And re-balancing is something you should do once, MAX twice a year.

We do it just once at the end of the year, and forget about it until then (unless we receive a letter that X fund is being replaced).

Anyone interested in a good investment read, and fresh off the boat in regards to Wall Street- I'd suggest "The Intelligent Investor" by Benjamin Graham (Warren Buffets teacher). Great book that references old corporations and compares/contrasts them to companies nowadays. And provides ways/what to look for if you want to dabble in individual stock investments. Cheap on ebay/amazon too...

Regarding investing in a company, my wife has a decent plan with her company. Nice balance of large-, mid-, sm-cap's (bonds/internationals too), some indexes etc, but also the chance to invest in the company.

Agree with most redditors here, diversification is essential and key to not overloading/losing it all at once (i.e. Enron).

However, we do invest max 2% (or 3) of her contribution with company stock. I don't think it's too harsh to invest a very modest amount with the company; as long as you feel they're large enough/stable to be around for 10-20-30 years etc (it's one of top 5 media companies in the US).

Good luck!!

u/Tabarnouche · 2 pointsr/personalfinance

My advice is based on you being together forever and that there is no yours/hers. Whether there is or is not a yours/hers dynamic is up to you, of course, but many committed couples choose this route. My advice pretty much boils down to two things you should do: pay off debt and save for retirement.

The first thing you should do is pay off any high-interest-rate debt. Why is this the first thing you should do? Because a penny saved is a penny earned. A good rule of thumb is to put your money toward whatever option has the highest rate--either earned or paid. In terms of how it ultimately affects how much money you have, paying off high-interest-rate debt is like putting your money in a high-yield investment.

Let's say you have $200,000 to spend (your case). Let's also say you have $50,000 in debt with a high interest rate of 11%. Right now your net worth (assets-debt) is $150,000.

Choice A: If you put it all in the stock market, you'll earn a (inflation-adjusted) yearly average of 8%, which is the historical average. So after one year you'll earn $16,000 (200,000.08), but now you still have to pay interest on your loan of $5500 (50,000.11). So your net worth after one year is 200,000 + 16,000 - 5,500 - 50,000 = $160,500.

Choice B: Pay off your loan and invest the remainder--$150,000--in the stock market. After one year you'll earn $12,000 (150,000*.08). Your net worth after one year in this case is 150,000 + 12,000 = 162,000.

Hopefully that explains why, if you can't beat in the market the interest rate you're paying on your debt, you should just pay your debt. So yes, pay your credit card debt. Pay your student loan debt.

After that, save for retirement!!! Not exactly sure how to do that? Get this book: I Will Teach You To Be Rich. Hyperbolic title aside, it provides sound and concrete advice as to what you should do to save for retirement. As you can see, the reviews on the book are great. Let me know if you have any other questions.

u/kr4psnus · 1 pointr/personalfinance

It's great that you do not have any debt. It's always good to keep physical Gold and Silver for long term investments however, real estate may be a better option. Not sure where you live but for 15K in Houston TX you can buy your self a nice piece of land. Land down here appreciates well as many people are moving here.

You may also look into trading stocks, however if you are thinking of stocks look into Fundamental Analysis for long term growth. Don't mess around with Technical Analysis yet as its better suited for short term investments.

$5k can get you some good diversified stocks.

Read this book -

u/zorts · 14 pointsr/personalfinance

"Safest" and "Fastest" are inherently at opposite ends of the spectrum. When we take risks (in other words; give up safety) we expect to be compensated for that. Which speeds up the rate at which the money grows... But risk also increases the chance of loosing money. Not a position we want to put your mother in. "Best" takes into account both. "Best" is an individual choice, and what is best by your moms standards may not be what's best in your standards.

A good rule of thumb for dividing assets is take your age in safe investments. 'Safe investments' is usually expressed as 'bonds'. So if your Mom is 60 she should take 60% of the funds and place them in something ultra safe. In her case starting with a high yield savings account, such as ING Direct, might be best.

Then selecting a nice safe bond fund. Look for one with Low Fees (usually Vanguard is a good fund family to start with). Which can be purchased through Sharebuilder (part of the ING account already established).

I hope that helps. For more information check out Bogleheads Guide to Investing. Which is a summation of wisdom from the Bogleheads website.

u/marginally-marginal · 2 pointsr/personalfinance

While this is not /r/investing, below are some suggestions which may be relevant. FYI, I work at an asset mgmt firm and run the credit/risk team.

You won't get rich, but what a fantastic gift. It's a good thing you have someone to help you begin thinking in those terms, but "investing in the stock market" is a broad concept.

First thing to remember is that you are at a disadvantage when it comes to "investing in stocks". Period. You will likely not pick big winners so what you likely want to do is to to avoid picking losers. With your limited background, if you want to "invest in your future", with that amount of money you may be better off selecting a mutual fund or an ETF that fits the amount of risk you are willing to take.

Next, since you are young the general guidance is to take on as much "intelligent risk" as possible. Take that rule of thumb with a grain of salt though. Everyone's risk tolerance is different. For instance, even when I was younger I was always "risk averse" and so invested more like a 50 year old. I preferred (and still do) equities from larger companies, proven cash flow, decent business strategy (what are typically called "Large Cap" stocks) and the debt (bonds) of companies which were more marginal and risky...whereas my peers loved Qualcom, WorldCom, Medtronic. So, we all are different...remember that. Never "bet" with money you can't lose. Investing in individual companies it not unlike going to a casino, but I always like to mention the caveat is that you can stack the risk cards in your favor with some investments.

If you really like the "idea" of investing and want to use this money to learn about how to do that best, take $15 and buy this book. Learning about investing is first an exercise in understanding the risks you are willing to take and find and analyze companies which have a risk profile lower than that but can grow at a rate you are comfortable with.

While there are a plethora of books on the market from Jim Cramer, Motley Fool, etc...the fact is, when it comes to investing in the equity of companies, The Intelligent Investor will help you set a baseline for the cash flow analysis of companies. Every analyst, nearly every PM, many risk managers and most decent MBA grad's that I know all have that book close at hand. I'm looking at a worn copy on my bookshelf right now.

Graham ain't sexy, high flying nor dramatic. Graham doesn't have fancy "sportscenter" type graphs you see on CNBC nor does it carry the vitriol you find on Fox Business News. But, it is an introduction into the basics of everything any intelligent investor strives to find: Companies who have the potential to grow at a level you are targeting while carrying lower risk relative to their peers.

None of what I mention above talks about "momentum" investing, technical analysis, algorithm's, options, hedging or any other method that isn't basic. As a new investor, you owe it to yourself to first learn "why" you are investing and then, my suggestion is, allow Graham to give you the initial "how" you should invest.

u/schlap · 1 pointr/personalfinance

If you have time read this relatively short book. I recently began investing for my retirement after graduating college and landing a job.

It has some really good information even if you have already begun investing and have happened upon a large sum of money (I think the chapter is titled "how to survive a windfall" or something like that).

Also, do not rush into a decision because it "sounds" like a good idea. It would be wise to even sit down with someone that you trust who has been investing (and doing well) to chat about how best to invest the money. Your father sounds like a good start!

Good luck!

u/c2reason · 4 pointsr/personalfinance

I would recommend that you get a good estate planning lawyer now. They can help you understand more and potentially advise you on what you would like to ask of your father. I also highly recommend this book:

An experienced lawyer will have "seen it all" and be able to help you know what pitfalls to look out for about children, trusts, and inheritances. My personal bias is towards keeping the trust distributions limited until a later age (40+), but you'll need to get your father on board with that. We once had a poster here whose trust wasn't released until age 55. I think encouraging your children to establish a career, at least, before they can tap into the money is a good idea. I've definitely known people who never really figured out what they wanted to do with their life because they didn't have to do anything. On the other hand, some people can be really self-motivated and level-headed. But I think more of this has to do with individual temperament than any amount of parental influence can have.

u/LevelOneTroll · 4 pointsr/personalfinance

Heh, I'm still just at level one, so I find myself being more helpful than not. :)

If you'd read enough of my comments, the following probably wouldn't come as much of a surprise. I would not use more debt to handle my current debt.

What you've outlined here is a plan to borrow what amounts to about half of your gross income... and it's mostly unsecured debt (not backed by collateral), which is why you need a cosigner. These are all huge red flags!

My advice would be to pretty much do the opposite. Keep paying minimums on the credit cards, but pay extra on the card with the smallest balance. Once it's paid off, throw your extra money at the next smallest balance, and so on. This is going to take planning and being intentional with your money. Start making monthly budgets if you're not doing that already.

I'm not being ugly here, please understand, but your income is on the low side. I would pick up an extra part-time job and kick all of its income over to paying off the cards even more quickly. You could probably get an extra $500/mo by just delivering pizzas on the weekends.

After the cards are paid off, then you get to save up some cash (you'll find that you've got more of that sticking around now that the credit cards are gone), and buy a computer. Save a little more and buy a desk and chair.

I recommend picking up this book: Total Money Makeover. It's pretty much the only thing that gave me traction with getting out of debt.

Best of luck!

u/invenio78 · 0 pointsr/personalfinance

That's typically not the way people think of income vs house expenditure. Let's say a couple made only $50k per year, but at age 60 they have a million dollars in the bank as savings. Can they afford to buy a house worth $1,150,000 million? Yes, they can use up their saving and then spend another $150k (3x their income) for their mansion. However, this is not an appropriate house for them, the "3x rule" applies to the total house price. This is an important factor because the costs of a house is not just the purchase price. It's upkeep, mortgage payments, property tax, etc.... which all tend to go up with higher priced homes.

General rule, your home price should not exceed 3x your yearly income. If you guys really want a $320k home. Try to increase your income well above $110k per year.

I would also recommend you read "The Millionaires Next Door." It's a wonderful book and illustrates how to build wealth and the benefits of not spending beyond one's means.
You can buy it used for $4 (including shipping).

u/Voerendaalse · 1 pointr/personalfinance

I don't know how much you can talk to your mum about this, but I would strongly advise her to put the money in the mortgage and then "forget about it". The money will not be lost, it will mean she will be that much closer to paying off the mortgage in full, and not have to worry about a mortgage check every month anymore will be very nice. She could use that extra disposable money to support the two of you when you are studying (where-ever that will be).

Maybe reading a book called "Your money or your life" helps, too. It helped me see the value of money more clearly (i.e. you trade your time for money, your time is precious, ergo, your money is valuable, too). The book's quite old (so very cheap to get second-hand) and so some of the advice might be outdated; but it might be that it "clicks" with her as it clicked with me.

PS She won't have to pay taxes (anymore) on the money that's distributed to her? Make sure she doesn't, or else there's a sudden big bill next April which would cause a lot of troubles.

u/TOMtheCONSIGLIERE · 1 pointr/personalfinance

> My first CD doesn't mature until September, so I have some time to figure it out.

That sounds good. Maybe familiarize yourself until then so you're ready.

> As far as a brokerage account, are there any advantages for Vanguard?

I don't think it matters but if you're going with Vanguard funds (admiral funds), then go with Vanguard. Read about it here. Perhaps Vanguard or Fidelity has an offer (free trades, free money) when you sign up so consider that. Depending on how much you want to invest, Vanguard has some interesting funds at certain levels of investment. List of Funds / ETFs / Some More Info

> I have my 401k and IRA wit fidelity.

You can do it all with Fidelity. It is your preference.

> Am I better off keeping all of my money with one company?

Maybe. It could be slightly easier. It is a preference question. You can invest in Vanguard and use Fidelity (vice versa).

> How can I learn how to pick funds?

Without getting crazy, you can read about the funds and what they do. What interest you? Me and you differ, so it might not help if I tell you what I would do.

> Any book recommendations?


  1. Read Me First

  2. Read Me Second

  3. Read Me Third
u/Dyogenez · 1 pointr/personalfinance
  1. Good as any other active manager at a bank. At higher account values (1m+) they might have access to some things you'd need a financial advisor for, and maybe a few things below that you'd have to go between multiple accounts to get (or just not use those types of investments).

  2. How much do you need for a down payment, and when? With what's leftover, when do you want to retire? Are fees charged based on account value or per trade?

  3. They're probably going to have a very conservative distribution if you need the money that soon, which would be good advice.

    General: Even if you take advice from them, know that you don't have to stick with them. You could learn from them and (when you're ready), move your money to somewhere else (I'd suggest Vanguard).

    ML generally charges a 2% fee for accounts under 250k, which for you would be $680 a year right now. People talk about the market rising somewhere between 6-8% a year on average, so a 2% fee is effectively like taking 25% to 33% of your gains every year. For comparison, if you choose your own funds, you might be paying 0.1% which would be 1.2% to 1.6% of your total gains. Thanks about that -- 33% vs 1.6%.

    Best thing to do now is definitely to learn! For me reading the Bogleheads Guide to Investing seriously helped ( ). Aside from that maybe open up a Roth IRA and get used to buying/selling funds. That's a good place to learn because you won't have to pay taxes on the trades, and the amount is generally small enough that even if things go wrong you won't be out that much.
u/DarkRider23 · 1 pointr/personalfinance

Rent seems a little high, but it might be the location. If that works for you, then so be it. You seem to know how to budget, so there's no point in giving you the spiel about how you might not be able to make it work.

Since you're good at saving money, the next step is to learn how to invest it. There's no point (IMO) in having $48k sitting in a checking account if you're not planning on any major purchases soon. You might as well let that money work for you. The 2 books I would suggest are The Only Investment Guide You'll Ever Need by Andrew Tobias and The Intelligent Investor by Benjamin Graham. Reading Andrew first is a great intro to investing and then Graham gets a bit more technical, IMO, so reading them in that order would probably be best.

If you want the general guidelines of what to do with money if you are saving it, then it is as follows:

  1. Match your employers 401k contribution.

  2. Max out your ROTH IRA

  3. Max out your 401k if you have any left over money.

    Step 4 varies from person to person. Some people prefer maxing out their HSA account and using it as a "super ROTH IRA" and then sending left over money to their brokerage account. Others prefer just putting the extra money into their brokerage account and into taxable investments right off the bat. It's all up to you.

    Edit - Forgot to put an emergency fund as one of the steps. Have about 3-6 months worth of expenses sitting in the highest rate account you can find just in case shit hits the fan.
u/sainone · 1 pointr/personalfinance

Im also a recent grad and have been learning a ton about all this recently. Getting paid once per month put me off at first, but is is a great way to help budgeting.

I would recommend reading this book. Might be the best 10 bucks I ever spent. Quick read and great intro in to managing your personal finances.

u/ninjafirepants · 177 pointsr/personalfinance

This is basically the thesis of Your Money or Your Life, which I'm currently reading.

I saw your comment in the original thread, and I'm glad you made a separate post to get it more attention. I don't know if this is something you realized on your own, or if you got it from this book or another, but it really doesn't matter.

Thinking of money in this way has given me more motivation to save than I had before, which should help me reach my goals sooner.

Again, thanks for sharing this viewpoint. Hopefully it helps another see the light.

u/andthenisawtheblood · 4 pointsr/personalfinance

I really like Investopedia University. It's free and very informative and they will have pages with short videos/articles explaining terms and concepts as well. A good start would be their Financial Concepts and Index Investing entries. Also wanted to add their Retirement Plans page. You'll mostly want to read about Traditional and Roth IRAs, and Qualified Plans.

The biggest tip I could give is to just keep reading, I found I was actually interested in this stuff so it was easy to read all about it. If you don't understand something make the effort to learn and then continue. It doesn't have to be complicated, index investing is a great way to build wealth over the long term.

I never really read any actual books, because honestly the best advice for 90% of people would be to just invest in index funds, and there's plenty of free information online, but you can read The Boglehead's Guide to Investing.

Bill Ackerman has a good video that does a good job of breaking it down.

u/Jericoicee · 1 pointr/personalfinance

I'd start by looking at this webpage:
This breaks down the steps of that flow chart for you. The simple flowchart is amazing for beginners.

I would then look into this blog. it has many useful topics but this post in general is a simple intro to see if you are interested in it:

If these topics interest you I recommend this book.

Best of Luck.

u/zpenacho · 2 pointsr/personalfinance

Depends on your goals. Since you already have a house it sounds like your goal is to maximize your wealth. I'm a little confused if these numbers are for a couple or for yourself. I'm assuming a couple. My advice below is based on those two assumptions.

Before investing in taxable accounts, which it sounds like you're doing with your stocks, you should max out your retirement accounts (IRA and 401k). The best way to maximize your returns is to minimize your costs. If those 7x returns were in a Roth IRA, you'd be saving 15% capital gains + CA state taxes (CA has the 2nd highest capital gains tax in the world, eventually you'll want a home in Washington...) - you can think of your long-term capital gains as 25% for mental math, although you're likely 24.3%. Take out $11k ($5500 for each of you) from the stocks and contribute to a Roth IRA before 4/15/18, as long as those gains are long-term. Stock account is now $189k.

You should have an emergency fund of 3-6 months of expenses, depending on your risk tolerance, to ensure you aren't forced to sell investments at the wrong time or go into debt. Let's take the $10k CC out of the annual expenses (stock account is now $179k), which makes it $80k annual, or ~$6500/month. How you have your accounts now makes me assume you're not too risk averse, so 3 months of expenses for an emergency fund is probably fine, which would be ~$20k. Stock account is now $159k.

Your annual excess cash flow is $16k (with $12k already invested in a 401k). For two people you could be contributing another $24k to max out your contribution for the year (total of $36k). Keep in mind your excess cash available for a Traditional 401k would be higher than that number as those contributions are pre-tax. Then on top of that you could be doing $11k for the Roth IRA. The contributions from your Roth IRA could come from your stock account if needed each year. Since you didn't mention an IRA, I'm assuming you don't already have a Traditional IRA, which means you can do a backdoor Roth IRA even if you exceed the Roth IRA contribution limits.

You mention a stock account not an investment account, so not sure you own any bonds. At your age you don't need to be too bond heavy, but asset class diversification is always important (research "the efficient frontier"). If your stocks are only domestic, you'll also want some international exposure. Also, since you asked about S&P, it sounds like you may be in individual securities as opposed to an index, which obviously increases your risk. With 7x returns maybe you know something the rest of us don't, or maybe you got lucky in a bull market where it was difficult to not make money.

My final recommendation is to read this book - it's quick and easy to grasp:

u/lastlook · 3 pointsr/personalfinance

I felt the same way as you last year. I am now 25 and feeling competent with my financials by reading this book and all the books it recommends.

I highly encourage you to get to a point where you feel comfortable with what all the terms are and what you can best do for yourself. It takes time to understand it all but your livelihood is worth it!

If you look up "if you can how to get rich slowly" into google, the top link will be free 16 page pdf laying out what you want to read up on and investing strategies.

u/elquesogrande · 1 pointr/personalfinance
  • JOB: Go for the Hartford position with the better company and leadership rotational program. This type of position is geared to get you fantastic experience and a better shot at increasing your salary. The East Coast location will also help with future international positions versus something in the midwest.

  • BOOKS: Start with The Millionaire Next Door: Surprising Secrets of America's Wealthy

  • CAR: There's no return on your investment here. Buy used, buy reasonably priced and follow the guidelines in "Millionaire Next Door."

  • Pay off your student loan - both due to the 6% "return" you would make (not lose) on the interest and the freedom you gain by not having debt.

  • Max out your employer match for the 401k

u/Tyler3920 · 3 pointsr/personalfinance

Preface: if you're not matching your company's 401(k), do that first thing Monday morning.

You're making three critical errors: (1) you're spending too much on housing; (2) you're not saving enough; (3) and you're succumbing to emotional appeal rather than logic.

With regard to the first point: you're spending way too much on housing. A very general general rule is to spend about 30% of your after-tax income on housing/rent and another 20-30% on fixed costs (utilities, car payment, etc). The remaining 30-40% goes to investments (Roth IRA, 401k), additional savings (5-10%), and then guilt free spending money.

Right now, you are spending 64% on your income on housing. Not just fixed costs, but housing. Moreover, including this amount, you are spending 95.8% of your income on fixed costs. That means you only have 4.2% of income to save (or buy a car).

Put it another way (since you read r/personalfinance). What would you think if somebody came on here and posted: "Humble beginnings, make $45k a year living with my parents, and I'm buying my dad a Porsche because that's his dream! But how do I save for an apartment?"

Your eyebrows would obviously be raised.

Now, here's why overspending on housing and fixed costs is a problem (and goes to my second point): you are suffering HUGE losses by not starting to invest NOW. For instance, if you started a Roth right now and contributed the max, and retired at 65, your Roth would be worth $1.263 million. If you waited until you were 30, it would be worth $814 thousand. In other words, by waiting six years, you're losing six years of compound interest. That's a $400k loss.

Lastly, I hope you're not looking at building a house as an investment. A house is a purchase. You cannot assume it will appreciate in value. It is a purchase that will cost a lot of money over time (property taxes, maintenance, transaction costs if you sell it, etc.). And, does your dad have the income to do all that, or will you be his supplier all his life?

Bottom Line: The fact that you're making $70,000 per year and think you need to take out a loan to afford car speaks volumes to your lack of finance knowledge. You need to own that and educate yourself on the basics (I'd recommend this:

What I'd do:

(1) Match your employer's 401(k)

(2) Start a Roth IRA

(3) Open an investment account to start saving for your own house, as well as being able to take care of your parents when they retire

(4) Start improving your credit to make sure you get a low interest rate on your car loan

(5) Buy a car and stop mooching off your friends

(6) Cut back on sending $2,000 to your dad to build a house.

(7) Stop going to restaurants five times a week and use that money to pay for car insurance and gas.

PS: I know I can't understand your emotional desire to build a house for your dad. But I speak from this personally: my mom moved into her "dream house" out in the country eight years ago. It was a $145k mortgage. Eight years later and she's re-financed it twice. The balance is $140k. She just never understood how much it was going to cost to maintain the house on her own. She's never going to pay that mortgage off. And almost 60% of her income goes toward paying her mortgage. It's locked her up financially. Only difference between her and you is that you have years to correct your mistake, and my mom is fucked.

u/Subject_Beef · 2 pointsr/personalfinance

I would recommend "The Wealthy Barber". In terms of general personal finance (not specifically investing) books, I really enjoyed the "The Millionaire in You: Ten Things You Need to Do Now to Have Money and Time to Enjoy It" by Michael LeBoeuf, and "Getting Rich in America: 8 simple rules for building a fortune and a satisfying life", because they cover not only how to succeed financially, but achieve happiness in all areas of life. I usually borrow my books from the library, but I liked these so much I have purchased multiple copies for my own library and to lend out to friends.

u/whosdamike · 6 pointsr/personalfinance

>Diversify your portfolio.

To expand on this: ideally, you'll want to have 10% or less of your portfolio invested in a single stock... especially the company you work for.

Things are great now, but if your job and your retirement are reliant on a single company, it's a bit risky.

Even a company that's been stable for 200 years can crash and burn in a short time. Then you would lose your job and your portfolio would tank.

I highly recommend diversifying into index funds, covering large swaths of the stock market (both domestic and international). Vanguard is a good place to research that. At your young age, it would be well worth it to have 80+% of your retirement portfolio in a broad stock market index fund.

If you're saving in the short term for some large expense, then I'd suggest a mix of money market and bond index funds. You can also Google "high interest checking" to find 3-4% interest checking accounts you may qualify for.

EDIT: Since you're new to investing, you should consider picking up a book on the subject. You can't go wrong with The Intelligent Investor for a starting point.

u/8ballfinance · 1 pointr/personalfinance

You may find All Your Worth authored by now Senator Elizabeth Warren a valuable read. If you can't grab a copy of the book, this blog post lays out a pretty good summary which explains 20% as a healthy savings rate and some suggestions for investing that. At your age, risk tolerance is high so you should be able to target a great deal of your savings to stocks and other securities. Good luck!

u/lobster_johnson · 1391 pointsr/personalfinance

The Bogleheads' Guide to Investing by Taylor Larimore is a great introduction to investing. It might look silly, but it's not a silly book.

It's intended for "normal people" with no background in economics. It explains the basics of the stock market, funds, ETFs, bonds, etc., as well as the basics of investment — risk management, compound returns, value investing/fundamental analysis, etc. — in simple, understandable terms.

"Boglehead" is a humorous term for people who espouse the investing philosophy of John C. Bogle, founder of Vanguard — the largest and most consumer-friendly provider of mutual funds in the U.S. — and creator of the first commercially available index fund. Bogleheads usually recommend a simple "three-fund portfolio" as a diversification strategy, based on the idea that index funds by design will, over time, give non-professionals the best returns, as opposed to individual stock picking.

Bogle himself wrote a bunch of books. The Little Book of Common Sense Investing is supposed to be great.

u/discoganya · 4 pointsr/personalfinance

Converting a 401k to a Roth IRA will trigger tax. So in general it is a bad idea, unless you are in a very low tax bracket today and expect to be taxed higher later in life.

Converting a 401k to a traditional IRA is tax free. But I tend to dislike that also - it increases your "IRA basis" and makes future conversions painful (e.g. backdoor Roth).

Most obvious choice would be to roll over all older 401ks to your current one - but that's only worth it if the current 401k fund choices are better. If you want to do this, please post the fund choices in the 401ks and I can comment on whether a rollover is a good idea.

Easiest option is to do nothing - and that's not a bad idea at $17k in assets. When you get to $50k-100k, read some books, get knowledgeable about investing and make an informed decision.

Good Luck!

u/jbomb6 · 4 pointsr/personalfinance

Boglehead's Guide to Investing this book is an amazing comprehensive guide to financial markets, saving, spending, bonds, taxes, etc etc. It is a collective thought project by 3 very wealthy investors with nothing to gain but to teach everyday people about money. It is very well written, well thought out, and covers a lot but does a great job of explaining it to financially illiterate people. I would definitely suggest giving this book a read or at least, checking out a few chapters.

u/sub_zero23 · 2 pointsr/personalfinance

that's exactly what we are thinking of doing, just not to Maine. We really love the outdoors so california is great, but it's $300k for a decent house way out in the desert now.

if we want to live in a decent area, it's $500-700k for a 40 year old home. With that much money, we could live somewhere nice, pay off our home early and then invest the rest. that's why we are thinking of moving somewhere like Galveston Texas. It's a beach city, lots to do, close to Houston to get our city fix, and the COL is pretty low.

I righly recommend the book 'Your money or your life' by Vicki Robin. It talks exactly about what you are referring to and has examples of people doing that.

seriously, buy it now, it's great

u/5_yr_lurker · 1 pointr/personalfinance

I am currently a resident in my research years and finally started taking an interest in my finances. I would argue that you do not necessarily need an adviser yet. You should do some reading first. Here are some websites White Coat Investor (WCI) and Bogleheads, which has a great forum and wiki. You should definitely read these 2 books:

  • The White Coat Investor. It is a little to basic for me and I pretty much had zero knowledge about finances but its a quick easy read.

  • The Boglehead's Guide to Investing. I personally think this is the gold standard for personal finance/retirement investing. (Read it even though it says not to if you have large loans). It is also a quick easy read but explains things considerable better than WCI book. It also discusses adviser and types of different advisers. Going forward you should make it a habit to read at least one finance book a year (treat it like CME).

    I too plan on PSLF (my residency + fellowship will be 9 years so pretty easy decision). My personal opinion is to live like a resident for 2-3 more years (no lifestyle inflation) and accumulate as much money as possible. That means renting for the same amount (if possible) wherever you move for you job. No new cars and the like... After just 2-3 years of this, you will have a decent chunk of money for whatever.
u/Toastbuns · 1 pointr/personalfinance

I'm in a similar position. I don't have a huge emergency fund because I know in a real dire emergency I could always call up my parents. I'd rather pay my loans quicker than work for years to build an emergency fund and I have the luxury of that. If you have any kind of safety net like that you might want to do the same.

So here is how I do it:

  • Emergency fund (up to a couple months of living expenses)
  • 401k up to company match (mine doesn't match right now so i skip this)
  • Student loans (what you can pay over min payment, target high interest loans)
  • Roth IRA (can only put away 5,500 in this a year)
  • Short term savings (or apply any extra not used for living expenses to loans or more to 401k if you like)

    I think you should throw as much money as you can at the loans without skipping on your 401k and possibly a roth IRA. Those loans are guaranteed to lose you money at their interest rates.

    You should also make sure the funds you choose on your 401k are low expense ratios with no loading fees. There is some good info on this in the sidebar.

    This book looks a bit cheesy but honestly it spells everything out in simple terms and it's meant for recent grads. I grabbed it off my roommates bookshelf one day and ended up reading it cover to cover. It really re-states much of what anyone on this subreddit would tell you.

    Best of luck, sounds like you have a good start on things!
u/donkawechico · 14 pointsr/personalfinance

Go to and open an individual account (or in your case, a Roth IRA account as well). You'll wire money into this account from your bank, and then you can use their interface to purchase shares in any stock you want.

Do NOT buy individual stocks (like AAPL, GOOG, etc). You CANNOT predict what stocks will go up or down, no matter what the "pros" tell you.

You CAN predict (with reasonable confidence given historical data) that the market as a whole will go up 5-7% annually when averaged over 30 years.

If ONLY you could buy shares in the entire market! Wait. You CAN! With these special kinds of stocks called Index Funds which are themselves a large collection of stocks designed to go up and down with the market.

But the market is still volatile and risky. That's why you should also invest in bonds which are lower risk, but lower yield. Rule of thumb is that you should invest your age as a percentage in bonds (if you're 30, 30% of your portfolio should be in bonds). Reason being you don't want riskiness when you're a couple years away from retirement.

If ONLY there were a type of fund that would AUTOMATICALLY adjust your bond holdings as you age. Wait. There IS! With these special kinds of Index Funds called "Target Retirement Funds". Simply buy into the fund for your retirement year, and the adjustments will happen for you as you age! For example, I plan on retiring in 2050, so I have shares in VFIFX.

Now, you can buy as many shares as you want in an individual account, but when you take the money out, you're going to get taxed significantly on your gains (capital gains tax). You can avoid this tax hit by buying your shares from within a Roth IRA account (as opposed to an individual account). There are a lot of restrictions on these IRA accounts, but when you withdraw money at retirement, it will not be taxed (if it's Roth rather than a Traditional IRA).

Lastly, do yourself a massive favor and read this book 8 times: The Boglehead Guide to Personal Investing. I was just like you last year. I read that book, and hung out here in /r/PF, and now I have a fully-implemented retirement strategy.

u/NumbZebra · 1 pointr/personalfinance

Have you seen balance sheets/know true net worth for these people who you think are wealthy? Or do you assume they are wealthy based on conspicous signs of "wealth" (aka cars, houses, boats, etc.)? Most people who flash their cash really have a low net worth, and finance most of those purchases. Meanwhile the truly wealth, are usually self made millionaires who do not show their wealth. They live in working class neighborhoods drive a used car and send their kids to public school.

Most millionaire who inherit their wealth blow it soon after and have to be supported buy their parents, because they over consume for their income level.

Read The Millionaire Next Door for more insight into how most people become rich and stay that way. It is typically the small business owner not the trust fund baby.

u/caffeinefree · 2 pointsr/personalfinance

The tl;dr is that if you have extra savings that you don't know what to do with, a good place for them is either a Roth IRA or your 401k. A lot of people your age don't have extra savings due to student loans, which is fine, but I did, and I had no idea what to do with them. They either languished in a savings account or I put them in a taxable investment account (a no-no if you haven't maxed both Roth IRA and 401k contributions) and invested in mutual funds with high expense ratios (meaning they were costing me more than the index funds I should have been investing in). I also didn't know anything about asset allocation, so I invested pretty randomly.

I'd recommend reading Boglehead's Guide to Investing if you still didn't understand most of what I said, because it's a good introduction to investing the way I (and most of the people on this subreddit) do.

Also, good for you - doing max matching is a great start. Now you just need to learn what to do with any extra money you have!

u/2wheeloffroad · 2 pointsr/personalfinance

1/2 in Vanguard S&P 500 and the rest in an equivalent fund focused on international companies. Diversity among the largest companies around the world. Vanguard funds have very lost fees so more of your money keeps working for you.

I have been reading this book. I think you would identify with it and like it. I don't necessarily follow all his advice, but a good principle.

The Simple Path to Wealth: Your road map to financial independence and a rich, free life

u/King_Tofu · 2 pointsr/personalfinance

Congrats on deciding to embark on this path to financial literacy--not many your age do :D

I can point you to some valuable resources.
wikipedia ( explains the apprx factors that weigh into your credit score.
The credit card section of our FAQ has a brief explanation about them.

For student loans, the national student loan data systemtracks all your info on your (government?) loans. I'd take ownership of this if I were you and get your mom to give you copies of the contracts and the fafsa account she made in your name.

If you dare to go beyond learning about just credit and student loans, the book "I will teach you to be rich" gives pointers on opening that first bank accnt and credit card, explains various ways to save for retirement, and briefly explains bonds, stocks, and mutual funds. The recommended books in our faq are also nice

u/Here4Downvotes · 2 pointsr/personalfinance

$600 for food for two people? You guys must enjoy some serious eats :)

Never having touched the IRA is great news. VTIVX is a great fund, with low expenses and index allocation that is rebalanced for you as time goes on, with the investments becoming less risky as you get closer to retirement. For folks like you who don't have the time and/or interest in learning about investing this is about as good as it gets. You don't have to do anything except keep investing as much as you can. You'll be able to retire early if you wish just by contributing ~25% of your income to the fund and letting it grow.

Keeping the 12k in cash is okay. That's enough to cover emergencies or give you an opportunity to take advantage of potential opportunities you might miss if you've got all your money stashed in illiquid investments.

I'd probably put your monthly excess cash into savings, then when your income goes up and your debt is paid off you can increase your monthly contribution to the IRA. When you're ready you can look into buying a home instead of renting if it makes financial sense to do so. If it were me I'd cut the food/transportation/rent budget a bit and work to get rid of the debt immediately, but I'm a nitpicker.

As long as you don't let your lifestyle and consumption habits inflate when your income increases you should be well on your way to financial independence, and if you choose, early retirement.

If you want to get a basic idea of the principles of investing you should buy William Bernstein's If you can. At 27 pages in length it's a quick and easy read.

u/voobaha · 2 pointsr/personalfinance

Jim Collins just published a book called The Simple Path to Wealth, based on his excellent series of blog posts. It's an easy read and I highly recommend that you check it out.

But until you have a good understanding of how investing works, don't worry too much about it. Put your savings in an online savings account like Ally so you can at least earn some interest. Keep saving, do some reading about investing, and you'll eventually know what to do with your money. You're already ahead of the game just by virtue of thinking about this stuff.

u/used-books · 2 pointsr/personalfinance

So you already know that your household spending is out of control, it should not be hard to live within your means at 15K per month. It's great that you are already using YNAB, so you know exactly where you stand. It would be a totally reasonable goal to pay off the credit card debt by the end of the year. As a high income houshold you are in a very good position to start planning for financial independence. This book is a classic:
Your Money or Your Life

It sounds like your family could benefit from financial relationship consuling. I just googled it, it is a real thing and it sounds like exactly what your family needs to turn things around.

Sometime when you are in a hotel room with time to kill, read this blog:
Mr. Money Mustasche
Read the whole thing. He is hilarious, very little fluff in the articles. It will change the way you think about money.

I'll offer a reality check for food budget. I am also in the NE US, and spend about $400 a month on groceries for a family of 4. Resturants sub $20. Eating largely local and organic (can't afford OG dairy all the time).
The three keys to how we do this:

  1. Buy grass fed meat in bulk from a local farmer once a year. A $200 chest freezer was one of the best purchases we have ever made.
  2. Join a CSA for vegetables. Ours is $25 a week for more organic, local veggies than we can handle. It runs in winter too. There is also a fruit option. At the very least, you can eat more seasonally , and stop paying $5 for a tiny container of berries.
  3. Cut out all processed and packaged food.

    Good luck!
u/mrmo24 · 1 pointr/personalfinance

Well if you get time, use it to read this:

It's a short book but very good stuff.
Definitely requires a little finance vocabulary lesson first but it's worth it. $2.3M is worth dedicating your time to. If you invest it safely and leave it alone, you will have plenty to retire very comfortably on.

u/mthreat · 1 pointr/personalfinance

If you're in a state like Texas, you may save a bunch on Taxes. If you're in California, not so much.

If your gain is considered long-term capital gains (if you sold shares that you owned for more than a year), you're also much better off. Federal tax here will be something like 20%, or maybe 23.8%. (In 2012 it was 15%, but those days are gone).

$5M isn't enough for some wealth management places (goldman sachs), but it is enough for many others. I'd read this Bogleheads book, it's short:

If you have time, check out the forum, and if you want to do your own investing rather than use a wealth manager (which is totally doable), consider using Vanguard.

u/KickAClay · 1 pointr/personalfinance

Congratulations and great tips!


Some things I've learned in life so far as well (maybe it will help others too):

  1. If you have debt, use a debt snowball calculator to get rid of the smallest debts first (as it feels like you're getting somewhere). On my last debt now, excluding my mortgage. Feels so good!
  2. Read/Listen to Your Money or Your Life by Vicki Robin.
  3. Automate as many bills/debts as you can (using things like Bill Pay or ACH at your credit union). Once my account sees by paycheck deposit (into spending account), it sends funds to my mortgage, bills, savings, other savings, and groceries accounts. The remaining is what I have each week for gas, eating out and "fun" money (~$100/week. I try to not spend it all and then I put more towards debts). This requires a budget. I have a debit card for bills and spending, and use the bills card for auto charges like Netflix, Utility bills...
  4. Look around for better deals on your utilities every year or sooner. I have saved over $2k in the last 1.5 years from just calling/chatting with my cell provider on a regular bases. Also, my trash company has matched any deal I can find, then beat it. I've cut most of my bills by 25% or more, just making calls.

    Best advice I got from my dad when I was a teen:

    "Dad, Im scared to get a CC."


    "Because it puts people in debt!"

    "Come with me..." [walks me to bathroom mirror] [points at me] "THAT'S who you should be afraid of! You have the control." AKA don't spend what you don't have and you'll be just fine. Hell, it worked. I think the most I had on a CC was $3k, which was due to both cars breaking in the same month.
u/Kwibbian_Kel · 1 pointr/personalfinance

> I'm now so overwhelmed that I don't know what to do.

My go to advice for brand newbies is to read The Wealthy Barber.

It's written in an easy, folksy style. It's basically a story about a financial newb (such as yourself) who finds out that the guy who cuts his hair is well on his way to financial independence.

>How on earth do i decide what to do with money in my IRA and 529s

In general, the money you're saving for retirement won't be touched for at least 30 years. So you can be aggressive with those investments and put them 100% in stock index funds. (DO NOT BUY INDIVIDUAL STOCKS.)

The 529 money will be needed much sooner. So while you want some growth, you also want to mix in some investments that preserve capital (i.e., don't lose money when the market goes down.)

Read that book. It will give you some basic knowledge you need to start making your investments wisely.

Good luck! I didn't start saving for retirement until I was 27, and my financial situation was not as good as yours at the time. I'm on track to retire comfortably at 62, plus or minus a few years.

u/CrustyBloke · 1 pointr/personalfinance

Is there any way you can get a cheaper apartment? You make good money and can afford it, but that's still too much to spend on rent, imo.

Also, yes you should max out your 401k. You can put in 19k per year (not including your employer match). So do that and it's like you now have a 86k/year salary and you're getting the best possible jump start on your retirement savings.

Also, I would buy and ready this book:

u/SSChicken · 2 pointsr/personalfinance

Not really. You're not trying to get 7% every year, rather 7% average growth over a long period of time (assuming you're young-ish, <40). Take a look at and scroll down to "Target Retirement" line of funds. They all hover around 7% return since inception, give or take a little bit. They start off fairly aggressive 90/10 for stocks/bonds but adjust over time as retirement gets nearer to ~50/50 or so allocation. This is pretty typical, and the longer you're in the market the more average you're going to see.

Keep in mind the market has a 200 year history now, and there's never been a 15 year period that shows negative growth. The chances of a 10 year period giving negative growth is low, around a 4% chance historically speaking. If you're not looking to get-rich-quick on the stock market, or turn a thousand a month into 25 million or some absurd number by the time you retire, then a 7% average return from the market is a reasonable assumption to make over a long period of time.

I just finished reading it, but I've found a lot of great information in the book I referenced the previous post. I'd definitely take a look at it as it specifically tailors to long term investments and safety, not money grabbing and stock chasing which can be inherently risky.

u/pwnster · 5 pointsr/personalfinance

Great job on picking Vanguard, they have the lowest fees for index funds in the market!

First you need to figure out if you are more hands on and would want to pick and rebalance your funds manually, or you can do a target date fund (this would do all the work for you, you just pick the general target year you want to retire).

I want to refer you to the Bogglehead's wiki on "Lazy Portfolios", it has some great ones using all Vanguard funds since they are the low cost leader. However, I strongly recommend that you read the whole Boglehead's book on investing:

I didn't know much, just like you, not too long ago, and this book and there reasoning certainly opened my eyes on what it truly means to invest. Good luck and keep it simple. Trying to get to fancy is not worth the hassle, hence the term "Lazy Portfolio".

u/utohs · 2 pointsr/personalfinance

First off, congrats on maxing out your 2013 contribution. It sounds like you are pretty new to investing. I highly recommend that you read The Bogleheads’ Guide to Investing to get a great basic understanding. And although I usually agree with /u/aBoglehead 's advice, I wouldn't move anything around until you take a breath and get a little more information so you actually understand what you are doing

u/Yep123456789 · 13 pointsr/personalfinance

The side bar here is pretty good.

This is also a pretty fantastic and easy read:

It’ll cost you like 10 bucks and by the end, you’ll have the info needed to make a basic portfolio.

u/Tidewater_Southside · 1 pointr/personalfinance

Your best payoff would be to invest the money. The odds are overwhelmingly in your favor when it comes to earning more than 4.75%, plus you can write off the mortgage interest on your taxes. I'm guessing you're in the 25% tax bracket.

Here's how I assess the situation:

  • No investment returns a guaranteed 4.75%. The safest investments are US treasury bonds. 10- and 30-year US bonds return 1.750% and 2.875%, respectively. Inflation is around 2.5% nowadays. Long-term bonds are impractical; interest rates vary from year to year and you'll likely see a higher rate in the next few years.
  • To beat 4.75%, you have to bear some risk. The Gordon Equation predicts a 7% return on stocks over the long term (2% dividends plus 5% earnings growth).

    My wife and I paid off our $174K 4.75% mortgage off in 37 months, "saving" about $55K in interest payments. If you take our 25% tax rate into consideration, the savings aren't that much. We're not even close to the minimum for itemized deductions, so it wasn't that big of a deal.

    I regret doing so. The opportunity cost of doing this was tremendous. Over the 15-year term, I could've had much better returns if I had dollar cost averaged that money into equities.

    This is really a question of whether you're more comfortable with a 4.75% "sure shot" or a "gamble with the odds tilted heavily in your favor". Even a conservative investment plan will beat a 4.75% yield (Vanguard's LifeStrategy Conservative Growth Fund, which has 20% stocks and 80% bonds, grew 5.55% annually over the past 10 years). More information can be found at the following links (from the right side of this page):

  • Long-Term Investing Start-Up Kit
  • Trad / IRA / Roth / 401k Matrix.

    Remember, too, that you could refinance your mortgage for a lower rate. Current rates are around 3.25-3.3%. It depends on how long you plan on staying in your home. It'd probably be 4-5 years before you'd break even. Try plugging the numbers into a refinance calculator.

    Buy a good starter book on investing. There's a lot of information out there. You could get it all from the net, but I found having all the basics in one book made it a lot easier to digest.
u/natinaut · 3 pointsr/personalfinance

I'd recommend I Will Teach You To Be Rich by Ramit Sethi. A touch cheesy, but a lot of good info in there about personal finance. I especially likes how he talks about automating your budget so that you don't have to spend a lot of time tending it.

Anything by Dave Ramsey is a good start too. And finally, I'd recommend the program YNAB for budgeting.

u/QuickLightning · 1 pointr/personalfinance

Based on your investment choices... I would also recommend the two Boglehead's Guides. There is one to investments and one for retirement. Both will take you from having a "lack of knowledge in this realm" to no longer needing advice from so-called financial advisers.

If you're really following their advice, you also wont buy the books, but you will check them out at a library. Personally I bought them because they were pretty cheap anyways and I love having them to lend to friends whenever the subject of retirement or investing comes up.


Retirement Planning!

u/freepressdotnet · 2 pointsr/personalfinance

The best advice I can think of:

  1. Continue to read /r/personalfinance /r/financialindependence /r/frugal and

  2. Read I Will Teach you to be Rich. This book is the easiest intro to finance book I've found for 18-25 year olds. It will get you halfway to where you need to be.

  3. Read The Bogleheads Guide to Investing. This is the best book for people who are serious about learning how to become wealthy and have some discipline/aren't terrified of finance.

    Follow this advice and you will have a secure financial future.
u/sbonds · 2 pointsr/personalfinance

You're off to a great start! Congrats!

Even though you're planning for long-term, I'd suggest a minimum of 10% in government bond funds (and 20% is likely better for starting out since it will help you avoid the temptation to flee the market when Bad Things inevitably happen.). Once you're comfortable with the rebalancing process in a year or so, you can reduce that down to 10% if you want.

One of the best things you can do is learn more. Here are some book suggestions for starting out with investing and asset allocation:

These books describe the way to get a return higher than 60-70% of all investors out there, simply by not trying to beat everyone else... You'll never impress anyone at cocktail parties, but you will make an excellent return over time.

u/swamp_land · 2 pointsr/personalfinance

don't do anything until you're comfortable with it an understand it. if all you understand is a simple savings account, stick with that. don't let anybody pressure into doing anything.

the best advice I could give you is to read a copy of Thomas Stanley's book Stop Acting Rich. He was a professor who studied high-wealth people. lots of great advice on how to live well below your means, manage the money wisely, and not waste the money trying to impress people. The absolute worst thing you could probably do is start living the high life, buying high-end cars, joining the country club, etc. it's easy to imagine someone squandering ten million dollars that way and regretting it the rest of their life.

u/Atomm · 3 pointsr/personalfinance

Congratulations! You've doing great. I only wish I was as smart as you when I was your age. Heck, you're even ahead of me in some regards and I'm 10 years old than you.

I have not read it yet, but I've seen The Intelligent Investor: The Definitive Book on Value Investing recommended by others on Reddit as a way to understand investing for us average folks. You might look into it.

u/yolfer · 1 pointr/personalfinance

Good question! First off, I feel that retiring at 50 is an honest goal for me, since like any other goal, I have a realistic plan to make it happen, and key metrics to track my progress. I'm using the plan described in Your Money Or Your Life.

I plan to do volunteer work, and (at the same time, if possible) bicycle touring. My wife wants to sail around the world. At least we have over a decade to figure it out.

We live very frugally, by choice, not to deprive ourselves in the present in order to retire sooner. We're a family of 5 and our monthly expenses are about $8k/month. I figure when it's just the two of us, they'll be around $5/month (in today's dollars).

Current savings are in the low 6-digits. 401k and Roth IRA, invested in Vanguard's Target Retirement 2040 Fund.

I guess my original question is what investment strategies should I use to "bridge the gap" of about 15 years between when I retire and when I'm able to draw out of my 401k and Roth IRA. (I'm able to draw the principal out of the IRA at any time, right?)


u/InternetCaesar · 6 pointsr/personalfinance

Live radically below your income level no matter what it is and invest as high a percentage as possible.

Change every habit in your life to save and invest, and not spend.

Change every habit in your life to recognize 99% of what you do is based on habit and consumption, that people have existed for 10's of thousands of years and lived on very little. Water, a bit of food and shelter. Reduce your existence to that and invest the rest.

Read "Millionaire Next Door".

Read "Habit"

It will cost you about $20. Follow them like the bible, like your compass. And in 30 days when you haven't done any of this, re-read this answer.

That's all there is to it. Follow that and you will become wealthy. There is nothing more to this, 99.9999% of humans cannot do it. And the wealthy benefit from that every day.

You're welcome.

u/can0peners · 1 pointr/personalfinance
  • Open the Roth and fund it for last year and this year, don't miss the deadline, get the money in there...if you ever need the principal you can pull it back without penalty.
  • Next read this: The Four Pillars of Investing and allocate your funds and build a plan to ensure you will have enough money for retirement.
  • you have a unique opportunity to create a lot of wealth. once you create your plan use the extra to have fun or invest in real estate or whatever else.
u/calcium · 1 pointr/personalfinance

If you can muster the strength to read a book, I highly recommend The Boglehead's Guide to Investing as it provides a great overview to many of the different types of investments, financial services, insurance types, and pitfalls to steer clear of when starting to invest. I liked the book so much I purchased a copy for both of my siblings. You'll also find this book recommended in the sidebar's Wiki.

u/RockyK · 2 pointsr/personalfinance

What it really sounds like is that you need a whole mindset change. I would recommend starting off getting some education (either college or self-taught) and develop confident mindset. You've taken the first step with seeing that you have a issue and asking for help.

There's a few books I can recommend: Think and Grow Rich, I Will Teach you to be Rich, Secrets of the Millionaire Mind.

Even if money isn't your goal, these books help you discover what you should be focusing life on.

Now it's all about doing it.

u/atoz88 · 2 pointsr/personalfinance

There are lots of good ones, and they all say the same thing - max out your retirement plans and own total market index funds at Vanguard. The Bogleheads Guide is good if you don't mind paying. Some good free ebooks, too, for example Investing In Four Hours will be free Aug 5.

u/PC__LOAD__LETTER · 6 pointsr/personalfinance

Mutual funds are probably your best bet for getting started. Super simple, instant diversification; just set it (monthly contributions), forget it, and let compound interest work. Check out this book: The Bogleheads' Guide to Investing.

If you'd like to do something more active, there's nothing wrong with that, it's just very hard to beat the market. Most professionals can't even do it consistently.

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> I just have a few pointers. Not going to go into verbose explanation.
> - IRA will relieve $5500
> - 401K will relieve up to 17.5K
> - Starting your own LLC is tax relief
> - Buying a house (Wouldn't recommend this until you purchase in a buyer's market, but that's your choice).
> - Invest in stocks (Here's a good book on investing):
> Just a small thing, but figure out interest rates on savings and checking. If savings for your bank is greater than checking, put the bulk of your money there (If you're not comfortable stepping into investing it yet). Two reasons you want to do this: 1. Better interest is a few more cents returned than in checking. 2. If someone steals your debit card, at least all your money isn't in one place.


^(I am a bot. Contact) ^pentium4borg ^(with any feedback.)

u/brendapie · 2 pointsr/personalfinance

It is on the reading list but I highly recommend I Will Teach You To Be Rich.

It is geared for someone in their 20s although it can be applied at any age. It's broken down into six weeks where he goes over your credit and banking accounts and then guides you into starting an investment account and setting up a budget. An updated edition of this book is coming out in May but the advice in the book is still sound and relevant.

Edit: Found one more book on that list that seems perfect. Get a Financial Life: Personal Finance in Your Twenties and Thirties.

I also really liked Suze Orman's The Money Book for the Young, Fabulous & Broke but it came out in 2005 so some of the content is outdated. This is one of the few books I have seen that really targets the issues young people face with money.

u/LordRockingham · 1 pointr/personalfinance

> The second is how, and where, you save it.

Asset allocation is far more important than whether or not you put money in a tax-advantaged account.

80/20 fund is fine for now. Read a couple books and you can adjust as you see fit down the line. The Boglehead's Guide is excellent.

u/goatfarm · 1 pointr/personalfinance

I've always liked the advice courtesy of EW that you should only be spending 50% of income on Needs (food, shelter, utilities, anything with a contract), 30% on fun things, and 20% on savings. I've found it to be a sustainable long-term plan.

Unless you've missed stuff in the break-down it looks like you are on-track for only spending 50% on your needs (I'm including debt payments in this, plus gym memberships (contract); and you're not blowing the bank on fun stuff. I'd suggest putting a little of that extra money towards your wife's school loans and also making sure you have adequate emergency savings. I think Mint is a fun way to track all of this.

u/IRMuteButton · 3 pointsr/personalfinance

It's been years since I read it, but The Wealthy Barber provides some great information to help a beginner manage their money.

u/joshua70448 · 1 pointr/personalfinance

Using electricity during specific time periods is only cheaper if your agreement with your electric provider specifies this. Here in Houston TX we can choose our retail provider, some have contracts where electricity usage during certain times is discounted or free but they charge a higher rate overall so it's usually not worth it.

Typical tips for reducing electricity usage would include turning off any lights you don't need, turning the thermostat up, using a programmable thermostat to only cool the house when people are home, checking your doors and windows to make sure they're not leaking, stuff like that. You could also use something like a Kill A Watt to measure how much electricity various devices are using.

u/Jim3535 · 1 pointr/personalfinance

This video is a good TL;DR despite the clickbait title.

The Bogleheads' Guide to Investing is a really good, practical book on investing.

A Random Walk down Wall Street: The Time-tested Strategy for Successful Investing is a pretty thorough takedown of stock analysis and picking.

u/karsk1000 · 2 pointsr/personalfinance

Congrats! You've done very well for yourself and should be proud! I disagree that you need a financial planner considering how far you have come yourself and what you have learned, I would recommend you do the same with your money.
My recommendation would be to hit the library and reserve this book

There is a forum for bogleheads and the name itself refers to folks who subscribed to index investing which John Bogle sorta kicked off with vanguard. It covers other topics outside of retirement like life insurance and such as well.

u/RoseGoldStreak · 8 pointsr/personalfinance

Can I make a couple of suggestions? First, read "If You Can: How Millenials Can Get Rich Slowly" If you don't want to pay the .99 for it on kindle then you can also find it as a PDF online (the author wrote it to be free.). It's very well reviewed by just about everyone (including the NYT and Forbes).

Second: Start an IRA. Yes it's harder to get money out, but it will mean you don't have to use that money for college.

Third: Think about what will make your life easier in the next five to ten years and save towards those goals.

u/0verlayFaBric · 3 pointsr/personalfinance

I just have a few pointers. Not going to go into verbose explanation.
-IRA will relieve $5500
-401K will relieve up to 17.5K
-Starting your own LLC is tax relief
-Buying a house (Wouldn't recommend this until you purchase in a buyer's market, but that's your choice).
-Invest in stocks (Here's a good book on investing): Just a small thing, but figure out interest rates on savings and checking. If savings for your bank is greater than checking, put the bulk of your money there (If you're not comfortable stepping into investing it yet). Two reasons you want to do this: 1. Better interest is a few more cents returned than in checking. 2. If someone steals your debit card, at least all your money isn't in one place. Last thing, regardless of your field (Because I'm guessing you're not going to be a stripper forever. It's just to pay the bills), get an accountant and figure out how to itemize things. Take their advice. They know how to get you extra money back at the end of the year. If you do things for the company i.e. drive a distance from work, and they don't reimburse you, KEEP RECEIPTS of getting gas. This can be itemized.

u/drivefaster · 2 pointsr/personalfinance

If you are interested in investing, check out /r/finance (they are helpful).
A comparison of online brokers fees

/r/finance book list

The Intelligent Investor is a must for value investing.

A Random Walk gives a good overview of diversification AND value investing, though some of the advice is outdated.

u/PhazAeth · 43 pointsr/personalfinance

You would love this book if you haven't read it. IMO, it's meant for the average joe to understand how paying anyone fees eats away at your future returns. It's fairly small and each chapter only takes 20-30 minutes to read. It's been well worth my time reading.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
by John C. Bogle

u/ChickenFriedSteakAnd · 3 pointsr/personalfinance

Unfortunately it's not as simple as calculating the power of each heater as they'll be engaged for different amounts of time. This depends on the efficiency of both the heaters and their thermostats. With a thermometer in the room on separate days with similar temperatures, humidity, and wind conditions, OP should record over a few hours how long each heater takes to reach a nominal operating ambient temperature, what that temperature is, and how many minutes in each hour the heater is engaged in order to maintain that temperature. This information combined with a known value for power can be used to determine the watt hours necessary to both engage and maintain a comfortable temperature for both heaters. Watt hours can then be used to determine exact savings using their electric bills current rates.

Edit: Or go off the deep end with one of these.

u/Trugy · 1 pointr/personalfinance

The best ones are of course free, and both this subreddit and bogelheads have a wealth of knowledge. I try and watch a tutorial or read a story a few times a week on both

For how to create and stick to a budget as a young professional, I like Dave Ramsey. He has tons of good rules of thumb and pitfalls to avoid that will be useful for the rest of your life. He's a bit conservative though, and I don't necessarily agree with his cash only, no debt strategies.

Suze Orman is another great author for younger people, especially when tackling big things for the 1st time like home ownership and loans

My top suggestion though is Rich Dad, Poor Dad. It's not as direct as many other personal finance books, as its more general advice on how to steer your financial life, but itss an incredible book

u/tmorton · 5 pointsr/personalfinance

The best investment you can make is education. This windfall is irrelevant in the grand scheme of things. If you're 38 without significant retirement savings, then you need to rethink your entire financial life. I would stash the money in a bank account and take a month or two with some good books and blogs.

For basic financial habits, I recommend Total Money Makeover. For investing and retirement planning, try The Boglehead's Guide to Investing

u/longlivedasset · 1 pointr/personalfinance

Read and listen to Dave Ramsey if you want to be "good" with personal finance.

If you want to "optimize" finance, then come hang out with us in r/financialindependence

Podcasts: ChooseFI, Afford Anything

Blogs: Mr. Money Mustache

Books: Simple Path to Wealth, Your Money or Your Life, Millionaire Next Door, The Richest Man in Babylon


Some pointers:

  1. Don't do what most people do. Chances are, they know less about personal finance than you do.
  2. Spend based on your value (within your means of course), not based on the percentage of income.
  3. Don't spend money to impress others.
  4. If you think 20's is time to spend every penny to have "full" experience, look at this chart.

u/groovy94 · 1 pointr/personalfinance

There is an ever-growing mountain of evidence that investing in passive, low-cost index funds is far superior to using actively managed funds or choosing stocks on your own.

Spend a few bucks and a few hours on a book like this and it could literally save you a million dollars over your lifetime.,204,203,200_QL40_&dpSrc=srch

u/cookie_enthusiast · 1 pointr/personalfinance

If you're really interested and you've got a little free time, I strongly recommend picking up Jack Bogle's Little Book of Common Sense Investing. As the title suggests, it's a quick read, and you don't need a finance background to understand it. It makes a more convincing case for index funds than I could ever post on Reddit.

u/drsboston · 6 pointsr/personalfinance

So you have a great start!
Question why do you want to invest in options, and with the how did you loose 25% in 6 months with the brokerage account? I'm guessing you are in individual stocks?

You are young and time is on your side instead of taking a gambling approach with individual stocks and options I would suggest opening another vanguard account for your taxable investments and just put it in an index fund, let compounding start to work for you.

Here is a book I really liked on active vs passive investments.

Also out of curiosity how are you earning 30k while going to school?

u/slyde56 · 2 pointsr/personalfinance

I'm not the guy I believe you're replying to, but I think that /u/nullstring means that once you have a job with a 401k, you'll need to reevaluate which (Roth or 401k) you'll max out first.

This book comes highly recommended here and elsewhere if you're interested in learning more. (second edition here

Feel free to pm me if you want.

edit: added second edition

u/thumbnail_looks_like · 2 pointsr/personalfinance

The Wealthy Barber

I read it when I was young and first starting out. It has great advice about how to save, plan for the future, and retire in style, all written with the average working Joe in mind. Highly recommended.

u/rhbast2 · 1 pointr/personalfinance

Don't pay off the house! The way inflation is going it is much better to pay your mortgage with future watered down dollars and you get to write off the interest in the mean time.

Go here and they will help you figure it out.

2% is criminal unless you are about to retire you could get 5% in bonds and be completely safe. I made 24% last year just buying the market and my Fiance's finance guy got her 12% (due to fees). Paying people for financial management seems like a waste to me when you can educate yourself a bit and not pay fees.

Main things to understand are diversifiable risk, expenses ratio, stock/bond ratio, asset allocation, rebalancing, tax loss harvesting, and tax efficiency. If you knew about these things last year you would have made 24% instead of 2% because all I did was buy the market and add a little extra exposure to small and foreign companies.

This book might help

u/alf3311 · 3 pointsr/personalfinance

First of all you appear to be paying 21-24 cents per kwh. If so that would put you among the very highest electricity rates in the country. You might want to double check that you are in the right billing category (not being charged as a business or something). National average is more like 14 cents. New England does have expensive electricity but unless you are on an island or something I don't think it should be that high.

Second, these bills are for 2 months at a time, not one month. Sounds like you're using 500-700 kWh per month. The USA national average is 900 kWh per household, so you are not using a crazy amount of electricity.

Next, by all means investigate your electricity supply. You should have access to your breaker, try shutting it off when you go away for a weekend and see if anyone complains. See if your electric meter is still running when your breaker is off. If there are any common electric uses (lights, etc) find out what meter they're on.

Finally, there are a number of ways to reduce your electric consumption. If your condo still has any old-fashioned incandescent bulbs, now would be a great time to replace them. LEDs have dropped dramatically in price, they are now just a few dollars per bulb and will pay for themselves almost immediately. If you are interested in tracking down other electricity sources you may want to get a Kill A Watt Meter or similar, which will tell you how many watts something is using. Cable boxes are notorious for using a lot of power, for example. Make sure they are off when not in use. You don't necessarily need to unplug everything, especially if you've measured it.

u/librik · 1 pointr/personalfinance

I'm going to recommend a book to you that you will appreciate. I've mentioned it a couple of other times in /r/personalfinance, but only as an interesting diversion -- in your case, it's an absolute necessity: Mind Over Money by Klontz.

This is a book about the psychology of money, the mental scripts and disorders we pick up from our childhood experiences and parental role modeling. I can assure you that when you reach Chapter 6 you're going to be running around your crappy apartment shouting "who is this guy and how is he spying on my dad?" There's an extensive section near the end that focusses on what you need: processes and analytical tools to disentangle your mental money-related scripts and get a grip on that nasty bit of psychodynamic trauma you're carrying around.

After you've gotten your head straight, I can recommend Warren's All Your Worth as a good book of basic guidelines and advice for making safe but non-crippling financial choices as you go forward. (That's the same Elizabeth Warren who is now a U.S. Senator, but in her old job as a professor of credit finance.)

u/aquapeat · 3 pointsr/personalfinance

i suggest to anyone who has all their money go to one checking account please read a personal finance book, i love recommending this book, or at least his website. i spent way too many years with one checking account saying one day ill do something about it.

and all the other advice is great as well. index funds should have lower expenses and its always a good time to get an ira started.

u/dogedick_coffeetable · 2 pointsr/personalfinance

Try to spend as much time continuously working as possible. This may take a number of sacrifices to do. Depending on what part of the film industry you may be waiting for jobs, or you may have one of the jobs where you just fly to the next project elsewhere in the world.

If you are in one of the more mobile jobs do that. The more time you continuously work the better off you'll be.

Now if you have reasonably consistent income you need to keep your expenses down and not accumulate debts. The reason being you need to save as much money as you possibly can.

Any retirement fund benefits need to be taken. The remainder needs to be invested. Those investments will be what generates your income.

My recommended reading to learn how to be a good passive investor is The Four Pillars of Investing.

You may want to consider shares that consistently pay dividends and bonds. This is not always the best long term strategy but knowing the film industry this may be a safer option for you.

u/Panasonicy0uth · 4 pointsr/personalfinance

As someone who works in finance for a living, I promise it's not as complicated as it seems. Once you understand the fact that the finance industry intentionally complicates and obfuscates its inner-workings to generate demand for our services and add a little bit more profit here and there, everything will seem a lot less intimidating.

If you're the bookish type and are serious about learning about the markets, I'd recommend checking out The Intelligent Investor by Benjamin Graham. I really like this edition because it has summaries after every chapter that ties the concepts presented by Graham to more recent economic developments such as the Dot Com Bubble and The Great Recession, among other things, and attempts to apply them. It's a dense read, even if you have a background in economics or finance like I do, but it's well worth it.

u/gillish · 5 pointsr/personalfinance

I am just like you. Except that I didn’t come to this realization at 21. I finally woke up to my debt when I was 28 and by then had $20K in credit cards and $80K in student loans. Do not be like me.

You need two things:

  • Dave Ramsey’s Book
    This book has literally changed my life. If you call Dave Ramsey’s radio show and tell him your story he may send this book to you for free! I personally am not Christian so I skip the few religious references. (Bonus: r/DaveRamsey)

  • YNAB
    This software keeps me on budget with my expenses and debt repayment. It’s amazing and there are ton of free classes and resources. As a student you qualify for a discount. It pays for itself so don’t be put off my the money. Do the 34 day trial before paying for it. (Bonus: r/YNAB)
u/NeoDozer · 2 pointsr/personalfinance

I think I will Teach You to be Rich by Ramit Sethi is written for the older teens/younger twenties crowd. He's a little nerdy but funny and gives solid advice. I buy it for all my younger cousins when they have asked me for personal finance advice and they've all liked it.

u/MinutesOnAScreen · 1 pointr/personalfinance

You've already gotten a lot of good advice. But I wanted to say that filling for bankruptcy is not going to help you if you make less than you spend. It will screw up your credit and you will still be living off credit cards. Once you cut your expenses and gain more income, start working at paying off the highest rate CC first. You might want to consider getting a book like The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness"

Also, since she is staying home with your son, maybe she could take in another child to watch.

u/humansvsrobots · 1 pointr/personalfinance

I disagree with you about the accessibility. Podcasts are the perfect way to choose what you want to listen to, instead of the hit-or-miss nature of traditional radio. And sometimes it is easier to pop in headphones than to read an article, like on the bus, while working out, or even in the car (over the car's speakers).

And for the OP, I really like the Dave Ramsey show for basic budgeting and debt management. He can get a little too religious occasionally and sometimes he gets political, but for the most part he has a great common sense approach to handling money. Oh and I would also advice anyone to ignore his investment advice, and instead to look into something like Boglehead's Guide to Investing.

u/nopingonthat · 2 pointsr/personalfinance

Honestly, if that's all you have in savings, don't play with it. That's not a lot. I'm an older person and have had decades to accumulate enough to put small amounts into stocks.

If you do want to learn about the stock market, I recommend The Intelligent Investor by Benjamin Graham and maybe the Motley Fool guides. Another thing you can do is visit the page and the page and read whatever free articles you can access.

If you do want to get a toe in, the way I started was to open a Vanguard "Star" fund. I also was working in tech and would take advantage of my company's stock purchase plan (ESPP). I'd get the stock at a discount twice a year and sell it immediately, getting a slightly under 15% return every six months on the small amount I put in.

u/donknotts · 1 pointr/personalfinance

You can do it. This is based on a 50/30/20 plan. If you want to read a book about it, All Your Worth is a good one.

I made a budget for you based on $3000 income since you didn't make it clear if you can always hit 80 hrs per pay period. I can send you this in an Excel spreadsheet if you want. I didn't go nuts with changes since it has to be something you can REALLY make happen.

Currently you are spending:

  • 80% on things you Must pay (rent, car loan, electric, food, etc.). ($2400)
  • 10% on Debt repayment ($300)
  • 7% on things you Want ($210)

    Your new plan:

  • 74% Musts ($2220)
  • 20% Debt repayment and savings ($600)
  • 6% Wants ($180)

    The only changes I made to your current spending on Musts were lowering your grocery bill and adding renter's and car insurance (I assumed $10 and $100, respectively).


  1. Get rid of TODAY:

  • Sirius
  • Xbox
  • DirecTV
  • Rhapsody

  1. Drop your grocery budget to $400.

  2. Get renter's insurance. It likely will be less than $120/yr, but I budgeted $10/mo.

  3. Add whenever (to use with Roku—I assumed Xfinity is your internet bill.):

  • Netflix $8
  • HuluPlus $8

  1. Consider for later:

    Sell your car (and insurance and gas AND its repairs and maintenance) and getting bus passes, if that’s an option in your area, then get a car again when you can afford it. Put the sale money toward your debt. This will get you closer to a VERY doable goal of:

  • 62% Musts ($1860)
  • 20% Debt repayment and savings ($600)
  • 18% Wants ($540)

    Keep in mind that you can use money from the Wants category to pay debts.


    I gave you $600 (20%) to pay your debts and save. You didn’t state the ABC Financial balance so I didn’t do anything with that.

    Month 1

  • Credit: Capital One 50
  • Credit: Chase 39
  • Hospital bill 350
  • ABC Financial 61
  • School loan 100
  • Savings 0

    Months 2-4 (You paid off the hospital bill last month!)

  • Credit: Capital One 50
  • Credit: Chase 289
  • ABC Financial 61
  • School loan 100
  • Savings 100

    Months 6-10 (You paid off the Chase bill last month!)

  • Credit: Capital One 339
  • ABC Financial 61
  • School loan 100
  • Savings 100

    By month 11 you should have ZERO credit card debt AND $1000 saved! For months 11 and after:

  1. Keep socking away $100/mo into your savings.
  2. Use the remaining budgeted $500 to pay off ABC Financial and the school loan.

    You'll want to reassess your savings and debt repayment plan after year 2.

u/ShadowIBlade · 6 pointsr/personalfinance

This may look impossible to overcome, but it can be done. Good news is you have a great income. The only way out of this mess is to get yourself on a strict written budget, cut up every single credit card and never use them again, and increase your income even further with a second part time job. Pay the minimum on everything while putting all extra money on the smallest debt. Once you pay that off, move onto the next smallest debt. This will begin to add up and you will start to make progress if you stick with it, but it won't be easy. Bankruptcy is a last resort and ultimately won't solve your terrible spending habits. Not everyone on this subreddit agrees, but I think you should really read Dave Ramsey's The Total Money Makeover. Pick it up from your local library because you don't need to spend anything to read.

u/Viper0us · 3 pointsr/personalfinance
You are currently invested in super high fee funds that will end up costing you $1000s upon $1000s over the life of your investment. You are losing almost 3% of your returns to Expense Ratios/Load Fees on every single fund you are invested in. You need to get out these now. Edward Jones is robbing you blind.

Current Portfolio

Investment|Ticker|Expense Ratio|Deferred Load|
Invesco High Yield Municipal Fund Class C|ACTFX|1.59%|1.00%|
Natixis Funds Trust I Oakmark International Fund Class C|NOICX|2.09%|1.00%|
American Funds SMALLCAP World Fund® Class C|SCWCX|1.90%|1.00%|
American Funds New World Fund® Class C|NEWCX|1.88%|1.00%|
John Hancock Fundamental Large Cap Core Fund Class C|JHLVX|1.81%|1.00%|

Use a fund analyzer tool such as this (may not work in Chrome) to determine the difference in fund costs in expense ratios.

For example, let's compare your SMALLCAP fund (SCWCX) against Vanguards SMALLCAP fund (NAESX).

If you made a $10,000 investment and held it for 20 years @ 5% returns, the Vanguard fund comes out significantly ahead by $5,855.94 due to an additional $3,367.21 in fees from SCWCX

Let's also talk about the deferred load fee (sales fee) of your funds. This means that your Edward Jones advisor is going to get 1% of your funds value every time you sell a share. At this time, with an initial investment of $22,000 this means you're going to lose $220 the instant you sell.

Financial Advisors

You are currently using a non-Fiduciary advisor from Edward Jones.

A non-Fiduciary Advisor's entire job is to talk new investors into buying funds with load fees (Front/Deferred). This is how they make all of their money. While it's completely legal for them to benefit off your lack of knowledge, and recommend sub-par funds to invest in for their profit, it is super scummy. In the future, you'll want to look for No-Load mutual funds to avoid paying the advisor a sales fee.

While most people can do just fine without an adviser, with just a little bit of research, if you absolutely WANT to have a financial advisor, you need to find a Fee-Only Fiduciary. Fee-Only Fiduciaries are not allowed to make any type of commission off your investments and will give you unbiased advice. You can go here to find fee-only fiduciaries in your area. If you go this route, I would recommend speaking to a few different fiduciaries. While all of their advice will be unbiased, it doesn't mean it is all the same quality of advice.

Here is a great infographic about what a Fiduciary is.

Where To Go From Here

1. Transfer all money from Edward Jones to a low-cost provider such Vanguard, Fidelity, or Schwab.
2. Decide on whether you want to manage your allocations manually (go to step 3-4) or let a target retirement fund (skip to step 5) do it for you.
3. Read the 3-fund portfolio wiki on Bogleheads
4. Read If You Can: How Millennials Can Get Rich Slowly. The Kindle edition is $0.99 without PRIME and free with PRIME.
5. Take your research from 3/4 and Invest in low-cost index funds to build good portfolio diversification OR select the target date fund at Fidelity/Vanguard/Schwab that meets your retirement age (set it and forget it)

If you are unsure how to do step 5, even after reading the information in 2/3, post a new topic for help and tell us which low-cost provider you selected.

Side Note: Dave Ramsey is fantastic for getting people out of debt, but his investment advise is notoriously bad. Get investment knowledge elsewhere.
u/chocolate_soymilk · 1 pointr/personalfinance

I don't have a great answer to that question. I would definitely try a private sale first. If in a couple months you don't get a bite (deal local and in person on craigslist, please), then try to sell it to a dealership or carmax, etc.

You two are great candidate for Dave Ramsey's plan - check out his book Total Money Makeover. It's a step by step plan to get out of debt, and it works well if you commit to it. It's very no-nonsense, and it has an enormous support community around the country and online.

u/bigjoshhhhhhhhh · 2 pointsr/personalfinance

I was in your position a while back, and this book did a great job of helping me start making sense of personal finance. From there, I went down a rabbit hole of reading pretty much everything from the PF reading list.

u/chandler404 · 15 pointsr/personalfinance

I'm a HUGE fan of this book, and actually read it. The version I read had commentaries at the end of each chapter that were written a bit more recently, so it helped to make the book book feel current (it was written in the early 70s). (

I found it to be a comprehensive explanation of all the financial instruments I'd ever heard of, and explained clearly what they were and how they worked. It's kinda like having a rich uncle sit you down in his wood paneled office and explain to you how the financial world actually works.

It's not simplified, and it can be intimidating, but I'd highly recommend it.

u/technofox01 · 533 pointsr/personalfinance

I used to sell annuities as a broker, yes this is the main reason. You are better off investing in a Roth IRA or some other retirement account first, then - if possible when you retire - obtain a variable annuity with a principle/income protection (just in case the market crashes, but you get more dough when it goes up, than fixed).

Long story short, read Bogleheads Guide to Investing or Bogleheads Guide to Retirement; sources:

The Bogleheads' Guide to Investing

The Bogleheads' Guide to Retirement Planning

These two books are more than enough to give anyone the knowledge in terms of investing and retirement planning. Or just hit me up with questions, please note that I haven’t been licensed in almost a decade, because I had chosen not to renew my series 6 and 63. Anyway, I hope my post helps.

Edit: damn autocorrect.

u/rocketwidget · 3 pointsr/personalfinance

That's tough. You won't get any agreement from the experts on what asset allocation is the best (primary because no one knows the future). What I would start with is The Boglehead's Guide to Investing. This reinforces the idea that very few people can consistently beat the market, yet you can do very well by tracking the market.

I use Vanguard mutual funds because they have the broadest selection of index funds and a proven history of reducing costs. If you want specific fund recommendations, I'd go to , a very helpful group!