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Old 05-08-2012, 01:05 PM
 
5,190 posts, read 2,586,178 times
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Quote:
Originally Posted by ragnarkar View Post
Career

Don't simply pick the career that pays the most.

Don't simply pick the career you (think) will bring the most enjoyment.

Pick a career that has good employment prospects and is something you can stand to do (not really hate but not really like either.)

Strive to learn as much as you can in that career, both hands on (jobs/internships) and book knowledge (college.)

Make a Budget

Don't worry about impressing anyone, strive to spend as little money as possible especially in the beginning and save your money in a stable, well-diversified mutual fund (do your research, but if you're too lazy, then go with PRPFX.. it's better than picking one blindly or not saving at all.)

Work-Life Balance

Do your best at your job but don't let it rule your entire life. If you've been frugal, you should have saved enough in a few years to last you 2+ years without a job. It's not ideal but if you're in an unfavorable situation at work (asked to do 3-4 people's work, excessive overtime without pay, unsafe conditions, pressure to do something illegal, etc.) then you can walk away without worrying about paying the bills.

When you've made a few million...


... then you can stop working a "job" and do whatever you really enjoy.

Work life balance is extremely important. Case to point, when I was young and stupid (now I am just stupid), I used to work pretty hard doing 14-16 hours days and often skipped lunch and dinner because things got too crazy.

Before long, I got stomach ulcer. Luckily it was a light one but it still took a 6 years for it to go back to normal. Did the company care a bit? Nope. They didn't tell me I should skip meals. Did I get praise for all the hard work or at least compensated for the extra hours? Nope. They let me keep job, that's all.

That was the days when I didn't know 1) I should take care of myself first, and 2) working hard won't get you no where but work smart well. I even get chewed out for the extra work I did because the more work you do, the more mistakes you can make and also when things aren't done, people assume that's your responsibility because you picked up the slack last time.
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Old 05-08-2012, 01:21 PM
 
Location: The Triad (nc)
17,745 posts, read 24,091,532 times
Reputation: 14969
Quote:
Originally Posted by abrokegal View Post
I've been lurking around here for a while and finally created an account.

I'm really curious about what you would tell young people (18-25 yrs old) about money, saving, being frugal, retirement planning, budgeting, etc. What are things you wish you'd started sooner? What would you recommend to a young person about money?
This is something I wrote back in 1998.
Some numbers probably warrant adjusting but the principle remains.

Title: Making Your Pile (Accumulate Major Assets)

What is in the Pile?

1) The Means Of Production
Education or training to include the tools, wardrobe and vehicle that are required to do the work
of your choice. This also includes deferring income in job X while you gain expertise in that choice
even if you could make more doing job Y. Budget @ $40,000.
(This should include paying off student loans.)

2) A Reserve Fund
Also known as "****-you" money. Enables you to weather any hardship that might arise
even one of your own doing. Allow some multiple of one years minimum living expenses.
Budget @ $ 20,000. (This does NOT include paying off old debts.)

3) Ya Gotta Live Somewhere
A modest yet adequately sized house in a decent area that can be easily sold
or rented if desired or needed. Budget @ $ 150,000.

(This should be done as a cash purchase but a short term -10yr-
mortgage could be OK if you have renters to pay most of it.)

4) Everybody's Got Stuff
All those possessions that will round out a life worth living. Furniture, Appliances,
Electronics, Athletics, Books, Clothing, Hobbies, and everything else you may like.
Budget @ $ 30,000. (This must first include paying off old credit debt.)

5) Wheels
Unless your job requires and allows you to deduct a nicer vehicle…
a modest yet adequate and reliable used car that will be used gently for
2-3 years and then sold and replaced before any major repairs/services are required.
Budget @ $ 10,000. (Do NOT buy a car on credit --EVER!)

Total Pile to be Accumulated $ 250,000.00 (2012 make it $300,000)

The various categories above are listed in the order of their importance in achieving the overall goal of accumulating them all and freeing up the balance of your adult life.

Note that there is no allowance in any of the different categories for debt or interest payments,
the care of any medical conditions, or the support of dependents.
If your life includes any of these thing’s then you will need to adjust accordingly.

Work hard when you are young, gain skill-sets, avoid debt,
save aggressively, have fun and travel too.

How Many Years ? (To accumulate your $ 250K pile)
5 Years ? = $ 50,000 per year plus Minimum Living Expenses
10 years ? = $ 25,000 per year plus Minimum Living Expenses
15 Years ? = $ 17,000 per year plus Minimum Living Expenses
===

This example is based on the 10 year plan:
(and uses a college age through the twenties sensibility)

Pile Accumulation $ 25,000.
Living Expenses 15,000. 40,000.
Payroll Factors @ 30% 12,000. = $ 52,000.

This means you will need to gross in excess of $ 50K each year.
===

How many hours do you need to work to earn this money ??
Answer: Not more than many people already do and that a young adult has ample ability to manage.
**

Given:
Total Time Available: 52 weeks per year
Vacation Set-Aside -4 weeks per year
Net Available Time 48 weeks per year
Moderate Skill Rate $ 20.00 per hour

Given:
$52,000 / $20. = 2600 hours per year
2600 hr / 48 = 54 hours per week

Real World:
30 weeks x 55 hrs = 1650.
18 weeks x 45 hrs = 810.
4 weeks x 0 hrs = 0. = 2460 hrs

Good Regular Job.................... & with a Part Time Job:
48w x40h x $20 x 1.0 =38,400 R/T..... 52w x40h x $20 x 1.0 =41,600 R/T
30w x15h x $20 x 1.5 =13,500 O/T..... 20w x10h x $20 x 1.5 = 6,000 O/T
18w x 5h x $20 x 1.5 = 2,700 O/T..... 22w x10h x $20 x 1.0 = 4,400 P/T
Real Regular Job = $ 54,600. = $ 52,000.
===

If you are able to earn more -- then you will be able to make
your pile in less than the 10 years forecast above.

Where do YOU stand in this scenario?
What are YOU able (or willing) to do to achieve YOUR pile?


Minimum Living Expenses
Everyone has different particulars with some of these things being higher, and some lower.
This is a starting point. The intention is to outline a reasonable budget that will meet the needs
of a young adult, busy securing their future.

Depending on your earning power, the variable is how many years you will need to live this life
before moving on to what should be a very bright future.
===

ANNUAL Budget Items:

* Shared House or Apartment w/ Utilities
allow $400 per month $ 4800.

* Communication; Mobile & ISP Account
allow $ 50 per month 600.

* Basic Groceries & Household Items
allow $ 50 per week 2500.

* Basic Wardrobe (nothing fancy)
allow $ 50 per month 600.

* Transportation
-Used Econo-Box Beater 1000
-Insurance & Registration 700
-Gas/Oil (min mileage) 800 2500.

* Medical & Dental 1000.

* Extra Groceries and Clothing 1000.

* Entertainment 500.

* Savings and Miscellaneous 1500.

Total Minimum Living Expenses $ 15,000.00


Note that there is no allowance in any of the different categories
for debt or interest payments, the care of any medical conditions,
or the support of dependents. If your life includes any of these things
then you will need to adjust accordingly.
===





The Goal

Ten years later you will have advanced further in your chosen field
of work which should mean an increase in the value of your skills;
above the effects of inflation. At the same time you will have purchased
a house, filled it with stuff, bought a decent car, saved a pile of cash,
achieved a superb credit score, and all without debt of any sort.

The $25,000 you have gotten into the habit of saving each year (to invest in yourself) and the ever larger amounts you will be able to afford because of salary increases, along with the $5,000 you save by not paying rent; can then be used for any of the things you have been denying yourself the past ten years.

Travel? Marriage and family? Start your own business? Investments?
There is really no limit to what might be achieved and you are still young
enough to appreciate the freedom a strong financial foundation can achieve.

Go for it!
===

Last edited by MrRational; 05-08-2012 at 01:34 PM..
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Old 05-08-2012, 01:24 PM
 
Location: Wisconsin
5,438 posts, read 3,415,239 times
Reputation: 5765
Quote:
Originally Posted by lifeexplorer View Post
Men are mostly egocentric.

"A man's worst enemy is himself."
How is telling you I've been happily married for nine years "egocentric?"
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Old 05-08-2012, 01:26 PM
 
Location: Scottsdale, AZ
4,487 posts, read 10,293,544 times
Reputation: 3758
Quote:
Originally Posted by ragnarkar View Post
Career

Don't simply pick the career that pays the most.

Don't simply pick the career you (think) will bring the most enjoyment.

Pick a career that has good employment prospects and is something you can stand to do (not really hate but not really like either.)

Strive to learn as much as you can in that career, both hands on (jobs/internships) and book knowledge (college.)

Make a Budget

Don't worry about impressing anyone, strive to spend as little money as possible especially in the beginning and save your money in a stable, well-diversified mutual fund (do your research, but if you're too lazy, then go with PRPFX.. it's better than picking one blindly or not saving at all.)

Work-Life Balance

Do your best at your job but don't let it rule your entire life. If you've been frugal, you should have saved enough in a few years to last you 2+ years without a job. It's not ideal but if you're in an unfavorable situation at work (asked to do 3-4 people's work, excessive overtime without pay, unsafe conditions, pressure to do something illegal, etc.) then you can walk away without worrying about paying the bills.

When you've made a few million...


... then you can stop working a "job" and do whatever you really enjoy.
I'd agree with most of this, it's all solid advice.

Frugality is all good and well but being frugal doesn't mean you should completely neglect spending money on things that make you happy. I have a lot of different hobbies I enjoy, all take some money but it makes my life better. I could probably scrimp and save everything but I think most people would be miserable without some sort of fun and enjoyment in their life.

Balance is key in everything you do. Balance in your work life, balance in your personal life, balance in your finances, etc. I'm not afraid to spend money but likewise I'm going to find a balance between saving and spending. If you spend nothing and are constantly worried about hoarding everything you make, chances are you're going to be miserable. If you spend everything you make and have nothing in the bank, chances are you're also going to be miserable. If you have a balance between what you spend on enjoyable hobbies and activities and what you save in the bank and investments, chances are you'll probably be pretty damn happy.
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Old 05-08-2012, 01:46 PM
 
5,190 posts, read 2,586,178 times
Reputation: 1723
Since you named yourself, abrokegal, here's a good advice: never ever give up working. Boyfriends and husbands, they come and go. Your career is the only thing in life that you can 100% depend on.
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Old 05-08-2012, 02:21 PM
 
71 posts, read 120,925 times
Reputation: 162
MrRational,

I love that guide! Thanks for sharing it.
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Old 05-08-2012, 02:22 PM
 
71 posts, read 120,925 times
Reputation: 162
Quote:
Originally Posted by lifeexplorer View Post
Since you named yourself, abrokegal, here's a good advice: never ever give up working. Boyfriends and husbands, they come and go. Your career is the only thing in life that you can 100% depend on.
I fully believe this too. I plan to keep working until whenever I retire.
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Old 05-08-2012, 02:22 PM
 
3,570 posts, read 3,229,154 times
Reputation: 3249
Quote:
Originally Posted by stan4 View Post
Money can buy freedom.
Acquiring things, on the other hand, I have found to be restricting. Things own you. Especially nice things.
Absolutely!
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Old 05-08-2012, 02:26 PM
 
3,570 posts, read 3,229,154 times
Reputation: 3249
Quote:
Originally Posted by lifeexplorer View Post
That was the days when I didn't know 1) I should take care of myself first, and 2) working hard won't get you no where but work smart well. I even get chewed out for the extra work I did because the more work you do, the more mistakes you can make and also when things aren't done, people assume that's your responsibility because you picked up the slack last time.
Oh, this is so, so true. Another one of those golden pieces of advice that you will not hear in conventional circles.

Work less, work better, work smart.
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Old 05-08-2012, 02:33 PM
 
5,190 posts, read 2,586,178 times
Reputation: 1723
Quote:
Originally Posted by syracusa View Post
Oh, this is so, so true. Another one of those golden pieces of advice that you will not hear in conventional circles.

Work less, work better, work smart.

No kidding. Now I work 1/4 as hard if that but make 3 times more money and get a tons of praises.
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