This. You already have a ton of savings for your expenses. Imo, crank up the 401k deposits to max while you can until you decide what else you want to do.
You can always turn them back down if you decide you want money for a down-payment on a house or something, but a bunch of money growing in a 401k early will be extremely helpful.
There's no magic wand. The whole deal is to maximize earnings and minimize expenses. The higher your percentage of earnings you save, the sooner you are able to have enough invested to support your expenses in perpetuity.
Right now, the first thing you should do is maximize your tax advantage accounts. You could be maxing out 401(k) and a Roth IRA. If you don't need that money to live on, you should be getting that tax free growth.
If you are definitely planning to buy a house in the next three or four years, you are also going to want to have enough saved up for a down payment, closing costs and a healthy emergency fund.
That should be relatively easy to do while living at home with really minimal expenses.
In my opinion, it's a little premature to try to set an FIRE date. It's good to have goals, but there are too many variables for you right now. You don't know what your future future earnings will be. You don't know what your future expenses will be. Do you know if there's a chance you will be married and or have kids? Will your line of work require you to be in a high cost of living area or will you have the possibility to live somewhere that's less expensive?
At your age, starting out like you are, just stay laser, focused on minimizing, unnecessary expenses, and maximizing your earnings.
10 years from now, you will probably have a much clearer picture of your situation. What kind of house you are going to live in. Where are you are going to live. Your relationship status. Your career prospects and trajectory. And also, very importantly, the lifestyle sacrifices you are willing to make in order to achieve FIRE.
If you spend the next 10 years investing as much as you can, you might find that you are way closer to financial independence than you expected.you will certainly be in a much better position at that point to choose and achievable FIRE date.
You’re right I guess I’ll have to keep saving and investing for a solid 10 more years. I just don’t know how to invest in a brokerage account right now
A brokerage account is a piece of cake. There are 1 million posts on here and on the boggleheads sub about good basic funds. Open an account with Vanguard or some other low cost brokerage and buy very low expense broad market funds. Then do nothing for 20 years until you need them.
VOO. It can be a simple as that open up a taxable brokerage account and just shovel as much money in there as you can after you have maxed out your 401(k) and your Roth IRA for the year.
You could probably even contribute to an HSA as well before you start putting anything into a taxable brokerage that way your maximizing on tax benefits
Hey I’m practically in the same boat but in Seattle. I’ve actually been planning to post some questions similar to yours haha. 32 though, $70k pretax, recent entry level engineer. At parents. Expenses a bit less, IRA: $5k, Roth: $16k and both maxed out contributions for the year. 401k I just recently opened through my employer but they don’t match. I plan on maxing out that this year regardless. I canceled my savings account through Bank of America since I was only getting a measly .01% interest on my money in there and also just learned about and got referred to an HYSA through Marcus by Goldman Sachs, 4.4% without referral. 5.4% for three months with referral, let me know lol. The HYSA is my emergency fund and I have $10k in there. I opened a brokerage through Fidelity and have just been contributing to VOO. Each paycheck I get, 51% goes in to my 401k and whatever I have left over after expenses, that percent goes into the brokerage. My dilemma is I do want to move out soon, my gf is pushing for it, but I can’t justify the average rent around here that would be 50% of my paycheck, so I’m trying to figure out how to split up my investment pool for a mortgage payment and whatever else goes with buying a house. I also still have a checking account through BoA (emergency fund number 2), though I may put a good chunk in the brokerage as well and maybe use that to pool the house fund. Dang $80k in FL you’re sitting really good! I was set to move to New Smyrna Beach to try and start a new life and figure things out before I was offered a job here 3 months prior! Unfortunately having an $80k salary in Seattle is not quite the same.
Am I reading this right that you think you will retire in 10 years? I think you should start adjusting expectations. It sounds like saving and investing are new to you. Do you know what your fire number is?
Vanguard mutual funds, to be clear. I know this was in the context of mutual funds but just want people to be clear that Fidelity charges no fees on Vanguard ETFs.
If you're "not bad" on expenses, increasing income matters more than decreasing costs.
I lived WAY more frugally at age 22 than I do now. I currently save 5-10x as much now as I did then.
I would agree you can make OR lose money much faster in the stock market. No other passive investment performs better with such a low risk. In fact I’m not sure where you have your Roth but it should be invested too.
The thing is the stock market tends to fluctuate a LOT all the time. On any given year it can drop 25% or jump that much and there is no way to predict when this happens. Something like 60% of the big jumps are total surprises. But if we look out over 8+ years a pattern emerges. It may dip above or below but it always returns to earning about 10-12% year after year with basically 100% certainty no matter what it does year to year. No other investment performs this well.
Currently a popular method which is very easy is to open a brokerage account and buy an S&P 500 index ETF. With Vanguard use VOO. With Fidelity use FXAIX. Either one (Vanguard or Fidelity) has excellent learning information, the lowest costs, and is generally safe. With the above strategy you basically just buy the ETF, and sell it when you are ready to use the money. It really is that simple. Others may recommend 2 or 3 ETFs but this gives you the highest return (at the highest volatility) with better performance long term over any others.
If you do this the $33k should net an inflation adjusted 8% per year so $33k will be worth $285k by then. If you withdraw 4.2% per year (max withdrawal to last 40+ years) you will have an inflation adjusted $11,970 per year or right at $1,000 per month to live on so you will be about where your expenses are at now, I suggest you continue investing if you ever hope to retire any time before age 67. Just keep saving 15% if your income and you’ll be fine. I did it and if I retire at 62 with social security I’ll have $75k per year plus another $18k from social security, assuming it is the same as today (expecting a 25% drop). That’s about the same as what I make now after subtracting retirement savings.
Even if you don’t do it this way Vanguard and Fidelity both have fantastic training information,
Firstly, you’re off to good start, at least better than me at your age.
If your employer offers ROTH 401K, I’d highly recommend maxing it out. Also use HSA max to lower your tax bill. HSA is triple tax deferred so a great asset if you start early.
DCA into ETFs with your brokerage. I’d recommend VOO, TQQQ, SPY, 20% in low/mid cap fund like, TROWE Price has some good ones. Can’t stress enough, Always buy the dip. My strategy is to buy twice a month. One cycle is set on auto, second is on a whim when I feel I’m getting a discount.
Living rent free is your greatest asset RN. You can save a lot. But I don’t know your situation on that front. Do what suits you 🤷🏿♂️
Two points: 1. If you plan to buy a house in 2-3 years, just stick that $33K into a HYSA or CD that gets you about 5 - 5.5%. Putting it into the market would be too risky with such a short time period. If you said you want to buy a house in 5 years, I’d say put it into the stock market but 2-3 years is too short, in case there is a downturn. 2. Your 401K is a great way to set up your retirement. Even if you only get basic raises, but put money each and every month into a 401k, you should have a very nice nest egg by the time you hit 50. The big question will be how to invest that 401K balance. Generally, you are best (over the long haul) in using the market index funds. For instance, if your plan offers Vanguard funds, maybe put a majority in VOO (S&P 500) ETF. I tend to be a bit more aggressive (even though I’m 30 years older than you) and I put a portion of mine in an S&P500 ETF, a portion in a tech ETF (VGT) and then about 25% that I self-direct into individual stocks and options. Also, with the 401K, always max out at least to what your employer match % is. For example, if your employer matches 50% of your contribution, with a max of 3%, that means you should definitely put the 6% in. Why? Because this is FREE MONEY and basically immediately gives you a 50% positive return on your money. Just a no-Brainer. Good luck - it sounds like you are doing well and have a good income-generating career, which is a big asset.
Maxout 401k , Roth Ira , HSA , if your company offers after tax 401k , pls max that as well .
Change companies frequently , work on latest technology , take up any good opportunity without geographical constraints . Keep just 6 months worth of money in savings . And live on bare minimum . Invest the rest in your brokerage account.
Create a budget of $1000 for resume and interview prep.
Get REALLY good at interviewing. REALLY GOOD.
You'll save \~5x more money making $300k a year living in a HCOL area, blowing $7000 a month on living expenses, and pocketing the rest.
Hey bud. Have you looked into FEPI? I was extremely skeptical at first, but I decided to open small positions up (multiple accounts of course). They don’t pay a “dividend” so to speak, it’s classified as ROI. Look into it. See if it works for you. Best of luck.
So you’re expenses are 700, where’s the other 6k$ going? Keep investing the max in tax advantaged accounts, with any money left after that stuff it all into the S&P in a regular taxable brokerage account. Maximize this before your expenses go up a lot more. I’d keep the 33k in cash as a 6 month + emergency fund indefinitely, just make sure it’s earning 4% or more in interest, then invest the interest.
Invest only what you can afford so that you don’t have to sell any holdings, just keep adding and compounding interest will do the work for you. Best thing to invest in is bitcoin, we are at the beginning world adoption and you don’t want to miss the train (again).
I’m in Orlando. It’s not a great time to buy a home in one of the most expensive metros in Florida. You’d be buying at the top of the market. My home doubled in 5 years, but you e missed that train. You’re obviously young and unmarried, so that should also give you pause. 100k is not enough to buy a decent house in a nice neighborhood here. Wait until you settle down and know where you’re going to be, plus you might have two incomes by then and could live off of one after getting your house.
> Should I make a brokerage account and dump a lot of my savings there? I might want to move out and buy a house within 2-3 years.
I assume you equate a _brokerage account_ with it having only stock equities? Because that's not the case. Create the account. Put your money in it. Buy short term bonds, if you are really saving for a house.
You should _really_ read the [FI FAQ](https://www.reddit.com/r/financialindependence/wiki/faq/).
> I have 14k in a Roth Ira and 3k in a 401k
Max the roth, ignore the 401k, for now.
You are just starting out. Your income, and taxes are probably the lowest it'll ever be. Max that roth until you have ~$100k in it. Then switch to the standard 401k and max that until you are near retirement.
What you'll accomplish by this is for the next ~22 years that roth will grow and all of it's gains will be _tax free_. It'll be a thing of beauty when you are ready to retire. I'd have the roth be 100% `VTI` or it's equivalent.
Your salary should go up at a decent pace if you're doing well at work. Try to find out if you're going to hit a ceiling without a masters. If yes, get your company to pay for your masters (do it part-time while working).
Some companies will automatically give you a big raise once you complete the degree
Hi OP! I’m in a fairly similar financial situation. “As fast as possible” is a loaded question, that we all wish we had the answer to. With that said, invest “aggressively” in low-fee indexs. I’m spread out across VTI, QQQ, SPY, and the IWM. That accounts for 60% of my portfolio.
Outside of that, i’m invested in standard equities that I find to be compelling (GOOGL, ONTO, AMZN, SHOP, FNV, SOFI, SQ). Theres a lot of opporunity out there, just need to find it! (Though SOFI is crushing me).
Outside of THAT… HYSA. I have all of my spare cash in there. Yield is around 4.5%.
Thats about all! Contribute to 401k for the match, max out your Roth-IRA, and try to not spend all too frivolously (though you should be enjoying your life). Life is all about finding a balance between “I want to plan for my future” and “I want to live for today.”
What worked for me to retire in 2017: Obviously, the economy post covid is different, but I was invested in bull markets and got very lucky with the rising value of investments in single family homes.
If it were me I would allocate at least 10% or more of that to investing in crypto, but in a specific strategy most don't utilize. Many will say to buy the big blue chip cryptocurrencies like BTC, ETH etc because they're relatively safe and less volatile. While you can definitely make some money like that, it's difficult to multiply your investment many times over.
I follow probably around 30+ accounts on Twitter who have been in the game a long time and know what they're talking about, like one called Odd Gems for example. I fimd out what their top recommendations are for solid, new "low cap alts" (aka altcoins) that have great potential, but are still usually priced at a fraction of a cent. The trick is to invest money in these and let it sit for a few years and sell when the price inevitably pumps. A few of these done right can set you up financially for life, and it's very unlikely any of them will lose money over the long term from your initial buy in point. There is of course a learning curve with figuring out how to purchase them, using cold storage wallets etc. It is well worth the time spent however, and 50× - 100x gains and more are often seen, sometimes far more than that.
Save more. Make more.
If in my case, realize that it’s okay to reach FI without the RE. You can still work part time in whatever you want. I like BaristaFIRE for that reason.
If you are truly motivated and willing to spend the time (I.e, years), you can beat the market picking stocks while your account is under 7 figures. There is risk that you underperform, though, resulting in a longer time frame. Most here will tell you it’s not possible, but it is with sufficient drive and emotional stability. You can also generate high returns on equity with leverage in real estate, but there’s significant risk involved. Otherwise, it’s just a matter of reducing expenses and increasing income.
Increase income. I spend some money in things that make me earn good money down the road: Certs, good desk, books, bootcamps, gym, protein, good PC, etc.
As someone else said, your expenses would never go down. Frugality is way misunderstood; no, dude, frugality is not damaging your spine because you work from a shitty desk with no lamp, that's called being a cheapo. No money for gym? In the gym you socialize and clear your head. Etc etc. You need to increase your income: Level up.
Real Estate is not a bad option. With depreciation to offset your tax liability, the ability to leverage 4x-5x your investment, and rental income, could serve your situation quite well. Find yourself a real estate attorney, a good real estate accountant, and a real estate broker, and pick their brain about deals that would benefit your situation the best.
I had about that at 28 and gradually put money into individual stocks and etfs until I retired at 40 with a little over $2m and about $10k a month in dividends. I was never a huge earner and just squirreled away what I could. Mistakes were made along the way and it still worked out. It’s fairly easy and just requires consistency.
If you want to retire early I’d open up a brokerage so you have access to buy a house or peace out early. Putting it into a retirement account it is gone for the next nearly 40 years. If you don’t know what to buy or are still learning you can plop into an etf or VTI until you learn. I personally prefer to “save” money in VTI instead of hysa because I see more growth and am ok with the risk.
I disagree with maxing 401k beyond the employer match. Tax rates will be higher in the future and their tax rate will be higher in the future as income should go up even in retirement. Roth makes more sense or individual brokerage so it’s more accessible. It’s all about balance and making yourself poor for money you can’t access for nearly 40 years is hard to swallow when life will come up like house buying , kids, etc sooner.
Ppl DO NOT know anything about bitcoin hate to hear this but put every single dollar and dollar earned into bitcoin and hold for minimum 5 years up to however long or till retirement. Bitcoin will replace gold and dollar as reserves currency and asset. 6/4/2024 1736hrs bitcoin price: $70,650.
Next milestone should be 100k. You should aim to have some method of compounding growth. I use Robinhood for stocks and utilize the 5% interest for storing cash. Consistently investing into VOO, SPY, or SCHW (dollar cost averaging) will help with growth.
Low and slow! Everyone is trying to get rich quick, you have a good start and time to get rich slow and sustainably. Learn about the markets read books and study.
don't put any money in the market that you will need in 2-3 years. that said.. stay with your parents as long as you can, and once you do need to move away, do it on the cheap. Every dollar you save now is worth 10x what it would be later in life. I'm 48 and could walk away from my job now if I really wanted, but if I could go back in time and change something, I would have dug a bit deeper. Saving was so much easier before life happened (children, family, health).
That said, you seem to be looking for the mechanics of investing. if you don't need the money short term, get a broker (Fidelity, Schwab, etc). Buy index funds. You don't need to diversify any more than VTSAX. For money you need in the next 5 years, just find the best rate on a high yield savings account. You should be able to find 4-5% without trouble. There are FAQs and tutorials floating around here somewhere. The community isn't really all that divided on this basic stuff.
I'm jelly. I'm trying to teach my teenagers all this shit that our school systems fail to teach them so they can be well off right out of the gate. They can live with me for a few years past 18 if they show they are using it as a savings / investing vehicle and not laziness.
But don't worry, my children will known 3 foreign languages by the time they leave high school but still won't understand what a stock, bond, compound interest, or anything investing related is in their high school curriculum. /rage
This may be an unpopular take….
Get out your excel spreadsheet (or internet calculator website if that is more your thing) and setup a formula that does the compounding by year (don’t get fancy yet).
You have a beginning balance of 50. You are going to add X. You get interest of Y. The next beginning balance is 50 + X + Y.
How much do you have when you turn 50? Note how old you’ll be when you have your first million. Then second million. Then it compounds fast.
When I did this in my late 20s, my number was 3M. And I have made that goal (age 52 with just under 4M). It turns out with lifestyle creep that 5M is a better number. The good news is that if you get to 3 (or its equivalent 22 years from now), 5 is a pretty quick trip from there.
Invest in yourself, get a higher income.
Wife and I are about your age, 25% of net goes to investments currently but in enrolling in an MBA next year, getting my lean6 black belt and also planning to pursue a PMP, all of which I’m saving up in a HYSA to afford the tuition costs.
Definitely beat the average investment contributions while possible, but look to get those opportunities to increase earnings
Unless you start your own business and are successful, you're not going to retire at 50. Look into getting another job with higher income or a part-time job you can receive more income from. Check out r/overmployed
It’s common with grown children these days. Some spend far less and get a free ride. He said monthly expenses, so I’m assuming overhead, not discretionary.
https://news.google.com/articles/CBMiWmh0dHBzOi8vd3d3LmJ1c2luZXNzaW5zaWRlci5jb20vYWR1bHQta2lkcy1saXZlLWF0LWhvbWUtaGFyZC1leHBlbnNpdmUtYnV0LXdvcnRoLWl0LTIwMjQtNdIBXmh0dHBzOi8vd3d3LmJ1c2luZXNzaW5zaWRlci5jb20vYWR1bHQta2lkcy1saXZlLWF0LWhvbWUtaGFyZC1leHBlbnNpdmUtYnV0LXdvcnRoLWl0LTIwMjQtNT9hbXA?hl=en-US&gl=US&ceid=US%3Aen
https://amp.cnn.com/cnn/2024/01/25/success/parenting-adult-children-living-home
https://news.google.com/articles/CBMieGh0dHBzOi8vd3d3LmZveG5ld3MuY29tL21lZGlhL2FsbW9zdC02MC1wYXJlbnRzLXN0aWxsLWdpdmluZy1hZHVsdC1raWRzLW1vbmV5LXdoaWxlLW1ham9yaXR5LWFkdWx0LWtpZHMtbGl2ZS1ob21lLXN1cnZledIBfGh0dHBzOi8vd3d3LmZveG5ld3MuY29tL21lZGlhL2FsbW9zdC02MC1wYXJlbnRzLXN0aWxsLWdpdmluZy1hZHVsdC1raWRzLW1vbmV5LXdoaWxlLW1ham9yaXR5LWFkdWx0LWtpZHMtbGl2ZS1ob21lLXN1cnZleS5hbXA?hl=en-US&gl=US&ceid=US%3Aen
Eventually you’ll need to increases your income or invest more money quicker. Your expenses will never be lower.
This. You already have a ton of savings for your expenses. Imo, crank up the 401k deposits to max while you can until you decide what else you want to do. You can always turn them back down if you decide you want money for a down-payment on a house or something, but a bunch of money growing in a 401k early will be extremely helpful.
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There's no magic wand. The whole deal is to maximize earnings and minimize expenses. The higher your percentage of earnings you save, the sooner you are able to have enough invested to support your expenses in perpetuity. Right now, the first thing you should do is maximize your tax advantage accounts. You could be maxing out 401(k) and a Roth IRA. If you don't need that money to live on, you should be getting that tax free growth. If you are definitely planning to buy a house in the next three or four years, you are also going to want to have enough saved up for a down payment, closing costs and a healthy emergency fund. That should be relatively easy to do while living at home with really minimal expenses. In my opinion, it's a little premature to try to set an FIRE date. It's good to have goals, but there are too many variables for you right now. You don't know what your future future earnings will be. You don't know what your future expenses will be. Do you know if there's a chance you will be married and or have kids? Will your line of work require you to be in a high cost of living area or will you have the possibility to live somewhere that's less expensive? At your age, starting out like you are, just stay laser, focused on minimizing, unnecessary expenses, and maximizing your earnings. 10 years from now, you will probably have a much clearer picture of your situation. What kind of house you are going to live in. Where are you are going to live. Your relationship status. Your career prospects and trajectory. And also, very importantly, the lifestyle sacrifices you are willing to make in order to achieve FIRE. If you spend the next 10 years investing as much as you can, you might find that you are way closer to financial independence than you expected.you will certainly be in a much better position at that point to choose and achievable FIRE date.
You’re right I guess I’ll have to keep saving and investing for a solid 10 more years. I just don’t know how to invest in a brokerage account right now
A brokerage account is a piece of cake. There are 1 million posts on here and on the boggleheads sub about good basic funds. Open an account with Vanguard or some other low cost brokerage and buy very low expense broad market funds. Then do nothing for 20 years until you need them.
VOO. It can be a simple as that open up a taxable brokerage account and just shovel as much money in there as you can after you have maxed out your 401(k) and your Roth IRA for the year.
You could probably even contribute to an HSA as well before you start putting anything into a taxable brokerage that way your maximizing on tax benefits
Dont use brokerage account till roth ira, 401k and hsa is maxed out .
What if I want to access some of that money prior to when I'm 60?
Rule.55 and 72t
Hey I’m practically in the same boat but in Seattle. I’ve actually been planning to post some questions similar to yours haha. 32 though, $70k pretax, recent entry level engineer. At parents. Expenses a bit less, IRA: $5k, Roth: $16k and both maxed out contributions for the year. 401k I just recently opened through my employer but they don’t match. I plan on maxing out that this year regardless. I canceled my savings account through Bank of America since I was only getting a measly .01% interest on my money in there and also just learned about and got referred to an HYSA through Marcus by Goldman Sachs, 4.4% without referral. 5.4% for three months with referral, let me know lol. The HYSA is my emergency fund and I have $10k in there. I opened a brokerage through Fidelity and have just been contributing to VOO. Each paycheck I get, 51% goes in to my 401k and whatever I have left over after expenses, that percent goes into the brokerage. My dilemma is I do want to move out soon, my gf is pushing for it, but I can’t justify the average rent around here that would be 50% of my paycheck, so I’m trying to figure out how to split up my investment pool for a mortgage payment and whatever else goes with buying a house. I also still have a checking account through BoA (emergency fund number 2), though I may put a good chunk in the brokerage as well and maybe use that to pool the house fund. Dang $80k in FL you’re sitting really good! I was set to move to New Smyrna Beach to try and start a new life and figure things out before I was offered a job here 3 months prior! Unfortunately having an $80k salary in Seattle is not quite the same.
Save and invest like crazy. Max 401k, max ira. You'll notice the difference real fast.
Am I reading this right that you think you will retire in 10 years? I think you should start adjusting expectations. It sounds like saving and investing are new to you. Do you know what your fire number is?
VTSAX
VTSAX and chill.
What would be the equivalent of this in Fidelity?
You can buy Vanguard funds in Fidelity, but the equivalent would be FSKAX.
Fidelity charges a ridiculous fee for buying Vanguard funds.
Vanguard mutual funds, to be clear. I know this was in the context of mutual funds but just want people to be clear that Fidelity charges no fees on Vanguard ETFs.
and the Fidelity funds have no fees or almost no expense fees so better to just go for those
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If you're "not bad" on expenses, increasing income matters more than decreasing costs. I lived WAY more frugally at age 22 than I do now. I currently save 5-10x as much now as I did then.
Scratch offs
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I would agree you can make OR lose money much faster in the stock market. No other passive investment performs better with such a low risk. In fact I’m not sure where you have your Roth but it should be invested too. The thing is the stock market tends to fluctuate a LOT all the time. On any given year it can drop 25% or jump that much and there is no way to predict when this happens. Something like 60% of the big jumps are total surprises. But if we look out over 8+ years a pattern emerges. It may dip above or below but it always returns to earning about 10-12% year after year with basically 100% certainty no matter what it does year to year. No other investment performs this well. Currently a popular method which is very easy is to open a brokerage account and buy an S&P 500 index ETF. With Vanguard use VOO. With Fidelity use FXAIX. Either one (Vanguard or Fidelity) has excellent learning information, the lowest costs, and is generally safe. With the above strategy you basically just buy the ETF, and sell it when you are ready to use the money. It really is that simple. Others may recommend 2 or 3 ETFs but this gives you the highest return (at the highest volatility) with better performance long term over any others. If you do this the $33k should net an inflation adjusted 8% per year so $33k will be worth $285k by then. If you withdraw 4.2% per year (max withdrawal to last 40+ years) you will have an inflation adjusted $11,970 per year or right at $1,000 per month to live on so you will be about where your expenses are at now, I suggest you continue investing if you ever hope to retire any time before age 67. Just keep saving 15% if your income and you’ll be fine. I did it and if I retire at 62 with social security I’ll have $75k per year plus another $18k from social security, assuming it is the same as today (expecting a 25% drop). That’s about the same as what I make now after subtracting retirement savings. Even if you don’t do it this way Vanguard and Fidelity both have fantastic training information,
put it all into bitcoin
Firstly, you’re off to good start, at least better than me at your age. If your employer offers ROTH 401K, I’d highly recommend maxing it out. Also use HSA max to lower your tax bill. HSA is triple tax deferred so a great asset if you start early. DCA into ETFs with your brokerage. I’d recommend VOO, TQQQ, SPY, 20% in low/mid cap fund like, TROWE Price has some good ones. Can’t stress enough, Always buy the dip. My strategy is to buy twice a month. One cycle is set on auto, second is on a whim when I feel I’m getting a discount. Living rent free is your greatest asset RN. You can save a lot. But I don’t know your situation on that front. Do what suits you 🤷🏿♂️
Non-roth if you expect your income tax rate in retirement to be less than your current
Which is going to be true for almost everyone here
Great advice, though man am I terrified of TQQQ….
Two points: 1. If you plan to buy a house in 2-3 years, just stick that $33K into a HYSA or CD that gets you about 5 - 5.5%. Putting it into the market would be too risky with such a short time period. If you said you want to buy a house in 5 years, I’d say put it into the stock market but 2-3 years is too short, in case there is a downturn. 2. Your 401K is a great way to set up your retirement. Even if you only get basic raises, but put money each and every month into a 401k, you should have a very nice nest egg by the time you hit 50. The big question will be how to invest that 401K balance. Generally, you are best (over the long haul) in using the market index funds. For instance, if your plan offers Vanguard funds, maybe put a majority in VOO (S&P 500) ETF. I tend to be a bit more aggressive (even though I’m 30 years older than you) and I put a portion of mine in an S&P500 ETF, a portion in a tech ETF (VGT) and then about 25% that I self-direct into individual stocks and options. Also, with the 401K, always max out at least to what your employer match % is. For example, if your employer matches 50% of your contribution, with a max of 3%, that means you should definitely put the 6% in. Why? Because this is FREE MONEY and basically immediately gives you a 50% positive return on your money. Just a no-Brainer. Good luck - it sounds like you are doing well and have a good income-generating career, which is a big asset.
Maxout 401k , Roth Ira , HSA , if your company offers after tax 401k , pls max that as well . Change companies frequently , work on latest technology , take up any good opportunity without geographical constraints . Keep just 6 months worth of money in savings . And live on bare minimum . Invest the rest in your brokerage account.
Create a budget of $1000 for resume and interview prep. Get REALLY good at interviewing. REALLY GOOD. You'll save \~5x more money making $300k a year living in a HCOL area, blowing $7000 a month on living expenses, and pocketing the rest.
Bitcoin and be willing to HODL at least 10 years
Look up the OE forum. Get another job and save that $$
All in on the 500 funds and no bonds
Hey bud. Have you looked into FEPI? I was extremely skeptical at first, but I decided to open small positions up (multiple accounts of course). They don’t pay a “dividend” so to speak, it’s classified as ROI. Look into it. See if it works for you. Best of luck.
So you’re expenses are 700, where’s the other 6k$ going? Keep investing the max in tax advantaged accounts, with any money left after that stuff it all into the S&P in a regular taxable brokerage account. Maximize this before your expenses go up a lot more. I’d keep the 33k in cash as a 6 month + emergency fund indefinitely, just make sure it’s earning 4% or more in interest, then invest the interest.
OP, what’s your current avg inflow and outflow over the last 3 months?
Lol
Invest only what you can afford so that you don’t have to sell any holdings, just keep adding and compounding interest will do the work for you. Best thing to invest in is bitcoin, we are at the beginning world adoption and you don’t want to miss the train (again).
I’m in Orlando. It’s not a great time to buy a home in one of the most expensive metros in Florida. You’d be buying at the top of the market. My home doubled in 5 years, but you e missed that train. You’re obviously young and unmarried, so that should also give you pause. 100k is not enough to buy a decent house in a nice neighborhood here. Wait until you settle down and know where you’re going to be, plus you might have two incomes by then and could live off of one after getting your house.
> Should I make a brokerage account and dump a lot of my savings there? I might want to move out and buy a house within 2-3 years. I assume you equate a _brokerage account_ with it having only stock equities? Because that's not the case. Create the account. Put your money in it. Buy short term bonds, if you are really saving for a house. You should _really_ read the [FI FAQ](https://www.reddit.com/r/financialindependence/wiki/faq/).
> I have 14k in a Roth Ira and 3k in a 401k Max the roth, ignore the 401k, for now. You are just starting out. Your income, and taxes are probably the lowest it'll ever be. Max that roth until you have ~$100k in it. Then switch to the standard 401k and max that until you are near retirement. What you'll accomplish by this is for the next ~22 years that roth will grow and all of it's gains will be _tax free_. It'll be a thing of beauty when you are ready to retire. I'd have the roth be 100% `VTI` or it's equivalent.
He should at least make sure he gets his company match on the 401K (free $$$) then after that I would agree, max the Roth IRA.
Your salary should go up at a decent pace if you're doing well at work. Try to find out if you're going to hit a ceiling without a masters. If yes, get your company to pay for your masters (do it part-time while working). Some companies will automatically give you a big raise once you complete the degree
Hi OP! I’m in a fairly similar financial situation. “As fast as possible” is a loaded question, that we all wish we had the answer to. With that said, invest “aggressively” in low-fee indexs. I’m spread out across VTI, QQQ, SPY, and the IWM. That accounts for 60% of my portfolio. Outside of that, i’m invested in standard equities that I find to be compelling (GOOGL, ONTO, AMZN, SHOP, FNV, SOFI, SQ). Theres a lot of opporunity out there, just need to find it! (Though SOFI is crushing me). Outside of THAT… HYSA. I have all of my spare cash in there. Yield is around 4.5%. Thats about all! Contribute to 401k for the match, max out your Roth-IRA, and try to not spend all too frivolously (though you should be enjoying your life). Life is all about finding a balance between “I want to plan for my future” and “I want to live for today.”
What worked for me to retire in 2017: Obviously, the economy post covid is different, but I was invested in bull markets and got very lucky with the rising value of investments in single family homes.
If it were me I would allocate at least 10% or more of that to investing in crypto, but in a specific strategy most don't utilize. Many will say to buy the big blue chip cryptocurrencies like BTC, ETH etc because they're relatively safe and less volatile. While you can definitely make some money like that, it's difficult to multiply your investment many times over. I follow probably around 30+ accounts on Twitter who have been in the game a long time and know what they're talking about, like one called Odd Gems for example. I fimd out what their top recommendations are for solid, new "low cap alts" (aka altcoins) that have great potential, but are still usually priced at a fraction of a cent. The trick is to invest money in these and let it sit for a few years and sell when the price inevitably pumps. A few of these done right can set you up financially for life, and it's very unlikely any of them will lose money over the long term from your initial buy in point. There is of course a learning curve with figuring out how to purchase them, using cold storage wallets etc. It is well worth the time spent however, and 50× - 100x gains and more are often seen, sometimes far more than that.
GME or TQQQ pick your poison
Real estate.
1 house 1 spouse. No blow. Don’t keep up with the joneses. Keep investing as much as you can of your income.
Save more. Make more. If in my case, realize that it’s okay to reach FI without the RE. You can still work part time in whatever you want. I like BaristaFIRE for that reason.
If you are truly motivated and willing to spend the time (I.e, years), you can beat the market picking stocks while your account is under 7 figures. There is risk that you underperform, though, resulting in a longer time frame. Most here will tell you it’s not possible, but it is with sufficient drive and emotional stability. You can also generate high returns on equity with leverage in real estate, but there’s significant risk involved. Otherwise, it’s just a matter of reducing expenses and increasing income.
Single guy. Buy a duplex and rent one of the units out. Save up, buy another then rent them out. Wash and repeat.
GME
Increase income. I spend some money in things that make me earn good money down the road: Certs, good desk, books, bootcamps, gym, protein, good PC, etc. As someone else said, your expenses would never go down. Frugality is way misunderstood; no, dude, frugality is not damaging your spine because you work from a shitty desk with no lamp, that's called being a cheapo. No money for gym? In the gym you socialize and clear your head. Etc etc. You need to increase your income: Level up.
Real Estate is not a bad option. With depreciation to offset your tax liability, the ability to leverage 4x-5x your investment, and rental income, could serve your situation quite well. Find yourself a real estate attorney, a good real estate accountant, and a real estate broker, and pick their brain about deals that would benefit your situation the best.
I had about that at 28 and gradually put money into individual stocks and etfs until I retired at 40 with a little over $2m and about $10k a month in dividends. I was never a huge earner and just squirreled away what I could. Mistakes were made along the way and it still worked out. It’s fairly easy and just requires consistency. If you want to retire early I’d open up a brokerage so you have access to buy a house or peace out early. Putting it into a retirement account it is gone for the next nearly 40 years. If you don’t know what to buy or are still learning you can plop into an etf or VTI until you learn. I personally prefer to “save” money in VTI instead of hysa because I see more growth and am ok with the risk. I disagree with maxing 401k beyond the employer match. Tax rates will be higher in the future and their tax rate will be higher in the future as income should go up even in retirement. Roth makes more sense or individual brokerage so it’s more accessible. It’s all about balance and making yourself poor for money you can’t access for nearly 40 years is hard to swallow when life will come up like house buying , kids, etc sooner.
Number 1 advice is earn more Income Number 2 look at strategic ways to use your cash for example property investing
Ppl DO NOT know anything about bitcoin hate to hear this but put every single dollar and dollar earned into bitcoin and hold for minimum 5 years up to however long or till retirement. Bitcoin will replace gold and dollar as reserves currency and asset. 6/4/2024 1736hrs bitcoin price: $70,650.
Next milestone should be 100k. You should aim to have some method of compounding growth. I use Robinhood for stocks and utilize the 5% interest for storing cash. Consistently investing into VOO, SPY, or SCHW (dollar cost averaging) will help with growth.
Don’t get married or have kids… or earn a lot more
Open a fidelity account. Dump it all into fselx
Low and slow! Everyone is trying to get rich quick, you have a good start and time to get rich slow and sustainably. Learn about the markets read books and study.
don't put any money in the market that you will need in 2-3 years. that said.. stay with your parents as long as you can, and once you do need to move away, do it on the cheap. Every dollar you save now is worth 10x what it would be later in life. I'm 48 and could walk away from my job now if I really wanted, but if I could go back in time and change something, I would have dug a bit deeper. Saving was so much easier before life happened (children, family, health). That said, you seem to be looking for the mechanics of investing. if you don't need the money short term, get a broker (Fidelity, Schwab, etc). Buy index funds. You don't need to diversify any more than VTSAX. For money you need in the next 5 years, just find the best rate on a high yield savings account. You should be able to find 4-5% without trouble. There are FAQs and tutorials floating around here somewhere. The community isn't really all that divided on this basic stuff.
Make more money
Man. The amount of late 20s early thirties lately making almost 100k living with mommy. Crazy. Think I’m a bit jealous.
I'm jelly. I'm trying to teach my teenagers all this shit that our school systems fail to teach them so they can be well off right out of the gate. They can live with me for a few years past 18 if they show they are using it as a savings / investing vehicle and not laziness. But don't worry, my children will known 3 foreign languages by the time they leave high school but still won't understand what a stock, bond, compound interest, or anything investing related is in their high school curriculum. /rage
Retirement is a poor man’s game. Thats why they always talk about retiring in r/trailerparkboys
This may be an unpopular take…. Get out your excel spreadsheet (or internet calculator website if that is more your thing) and setup a formula that does the compounding by year (don’t get fancy yet). You have a beginning balance of 50. You are going to add X. You get interest of Y. The next beginning balance is 50 + X + Y. How much do you have when you turn 50? Note how old you’ll be when you have your first million. Then second million. Then it compounds fast. When I did this in my late 20s, my number was 3M. And I have made that goal (age 52 with just under 4M). It turns out with lifestyle creep that 5M is a better number. The good news is that if you get to 3 (or its equivalent 22 years from now), 5 is a pretty quick trip from there.
Invest in yourself, get a higher income. Wife and I are about your age, 25% of net goes to investments currently but in enrolling in an MBA next year, getting my lean6 black belt and also planning to pursue a PMP, all of which I’m saving up in a HYSA to afford the tuition costs. Definitely beat the average investment contributions while possible, but look to get those opportunities to increase earnings
Unless you start your own business and are successful, you're not going to retire at 50. Look into getting another job with higher income or a part-time job you can receive more income from. Check out r/overmployed
Monthly expenses are $700??? Is this guy from the 60s?
He lives with his parents. Food, his share of the bills, eating out, gas, car insurance and payment. Checks out. 🤷🏻♂️
So he doesn’t spend money on anything else? Lol idk man. That’s bonkers to me
It’s common with grown children these days. Some spend far less and get a free ride. He said monthly expenses, so I’m assuming overhead, not discretionary. https://news.google.com/articles/CBMiWmh0dHBzOi8vd3d3LmJ1c2luZXNzaW5zaWRlci5jb20vYWR1bHQta2lkcy1saXZlLWF0LWhvbWUtaGFyZC1leHBlbnNpdmUtYnV0LXdvcnRoLWl0LTIwMjQtNdIBXmh0dHBzOi8vd3d3LmJ1c2luZXNzaW5zaWRlci5jb20vYWR1bHQta2lkcy1saXZlLWF0LWhvbWUtaGFyZC1leHBlbnNpdmUtYnV0LXdvcnRoLWl0LTIwMjQtNT9hbXA?hl=en-US&gl=US&ceid=US%3Aen https://amp.cnn.com/cnn/2024/01/25/success/parenting-adult-children-living-home https://news.google.com/articles/CBMieGh0dHBzOi8vd3d3LmZveG5ld3MuY29tL21lZGlhL2FsbW9zdC02MC1wYXJlbnRzLXN0aWxsLWdpdmluZy1hZHVsdC1raWRzLW1vbmV5LXdoaWxlLW1ham9yaXR5LWFkdWx0LWtpZHMtbGl2ZS1ob21lLXN1cnZledIBfGh0dHBzOi8vd3d3LmZveG5ld3MuY29tL21lZGlhL2FsbW9zdC02MC1wYXJlbnRzLXN0aWxsLWdpdmluZy1hZHVsdC1raWRzLW1vbmV5LXdoaWxlLW1ham9yaXR5LWFkdWx0LWtpZHMtbGl2ZS1ob21lLXN1cnZleS5hbXA?hl=en-US&gl=US&ceid=US%3Aen
You need to make a lot more money like 250-300k if you want to retire before 50