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Hey all, I havent really had anyone look at my finances, so I figured I would post here to see if anyone had any insight or recommendations.
I'm currently 25, make around 75-80k a year. I am in a sales type posistion which is mostly commision and bonus, so this # could change quite a bit. I'm only high school educated and have been working a white collar job for about 5 years. Ive thought about going back to school, but figured with my experience it wouldn't be worthwhile.
Currently I put 15% into my 401k, company only matches $1500. Total value is around 28k.
I have around $9k in dividend paying 'safe' stocks, $4k in somewhat risky stocks.
$18k set aside in an emergency fund
$20k in a house fund, given that I would need around $60k to purchase a desirable house (I live in Chicago) I have no idea when I'm planning to purchase. Probably another 2-3 years.
I own my car, only 4 years old, but is a 'sporty' car and does require a decent bit of maintenance.
I am not very frugal, as I do go out quite a bit and do take vacations, but try to put savings first
I live with my gf who pays for half the rent. Rent right now is dirt cheap (500 pp +utilities) but will be moving to a nicer place which will probably add another 50% to it (which is still pretty reasonable for Chicago)
I currently have no debt
My main concern is the amount of cash I am stocking away earning 1%. I am a bit concerned that if I get laid off I would not find another job earning as much, but I probably shouldnt worry much as both my company and I are doing well.
As of now I am directing all of my savings toward the 'house fund' which is in an ING savings account. Since this purhcase will be another 2 years out, should I consider riskier type investments? I realize that you typically
want to be able to only invest in stocks if you can spare 5 years.
My goal that I set for 2011 was to get my emergency savings to 15k, keep my 401k at 15%, and get my house fund up to $35k. So as of now I'm throwing all of my spare change at the house savings. I realize I could live much more frugal and get there quicker, but I also try to enjoy whatever is left of my youth
For 2012 I figure I will max out a roth, continue to put 15% in my 401k, and then have at the house fund again. Thanks for any recommendations!
- get rid of your safe stocks, get rid of riskier stocks
- buy into s&P500 from Vanguard (it's done well for me)
- not sure how you're investing your 401k but be sure you're ABOVE 95% in stocks. you've got plenty of time!
- given that you've only got a HS education, i would keep your emergency fund high. you never know. i think about 20k is pretty sufficient though....given that your rent is only 500 bucks! nice! that should also let you save a bunch over time....which sounds like is the case.
- i probably wouldn't wait another 2 years to buy a house. get into something a bit cheaper but try to move and get a house/townhouse sometime this year. the rates are still great.
other than that, i think you've got it down man! good job!
I don't have much to critique on your savings/finances, but I would say that at your age now is the time to invest some of that money in yourself and complete your degree. Work towards an associates and then roll that into the completion of a bachelors. While I agree that you may not learn much of practical value taking the classes, so many employers now require a bachelors for employment and many require a masters for senior management positions. I doubt this trend is going away anytime soon. Losing your job may find you one of the many with experience that gets overlooked because they don't meet the basic requirement of a degree to be hired.
Would you rather take the time to do it now, or find yourself in a position needing to complete 2-4 years of schooling to get a job, or sitting stuck against a glass ceiling in a company, needing a masters to move ahead and needing 6+ years of schooling to get it?
yeah, i agree with NJGOAT. you sound like you're in great shape, but one thing about sales positions is...they can decline just as fast as you can do well. you need a nice emergency cushion, and you should certainly complete the degree so you have "on-paper" the skills required to get another job. it's sad, because like GOAT said, you're not going to learn much. but many employers require that piece of paper. why limit your potential employer pool? so yeah, pick a low cost, but reasonably respected school in your area...that's what i would do at least.
- get rid of your safe stocks, get rid of riskier stocks
- buy into s&P500 from Vanguard (it's done well for me)
- not sure how you're investing your 401k but be sure you're ABOVE 95% in stocks. you've got plenty of time!
- given that you've only got a HS education, i would keep your emergency fund high. you never know. i think about 20k is pretty sufficient though....given that your rent is only 500 bucks! nice! that should also let you save a bunch over time....which sounds like is the case.
- i probably wouldn't wait another 2 years to buy a house. get into something a bit cheaper but try to move and get a house/townhouse sometime this year. the rates are still great.
other than that, i think you've got it down man! good job!
Thanks. So your saying to just buy into mutual funds? I thought about doing that for awhile, but figured that after fees my picks would do about the same. I have XOM which is up about 50%, PFE up 15%, GE up 10%, just bought NLY up 2%, and SIRI up 3500%. I did a bit of gambiling during the downturn Lehman brothers, Wamu, oops . Also bought into Ford at $1 and sold at $3, Doh.
I could get into a place for around 200k in Chicago, wont be the type of place I wanted or on the best block, but it would work. My issue is that I dont have 20% so I would be paying a PMI... Also I'm a bit scared of only putting 10% down I guess. Also if I get into a subpar place I might be tempted to move in 3-5 years.
I don't have much to critique on your savings/finances, but I would say that at your age now is the time to invest some of that money in yourself and complete your degree. Work towards an associates and then roll that into the completion of a bachelors. While I agree that you may not learn much of practical value taking the classes, so many employers now require a bachelors for employment and many require a masters for senior management positions. I doubt this trend is going away anytime soon. Losing your job may find you one of the many with experience that gets overlooked because they don't meet the basic requirement of a degree to be hired.
Would you rather take the time to do it now, or find yourself in a position needing to complete 2-4 years of schooling to get a job, or sitting stuck against a glass ceiling in a company, needing a masters to move ahead and needing 6+ years of schooling to get it?
Thanks, figured I would get this advice .
My current employer does have a college degree requirement, but since I did have experience and did well in the interview I got the job. I was hoping that other companies were the same way, not even caring about education after 7-10 years of experience. Now I'm just being lazy and making excuses.
Thanks. So your saying to just buy into mutual funds? I thought about doing that for awhile, but figured that after fees my picks would do about the same. I have XOM which is up about 50%, PFE up 15%, GE up 10%, just bought NLY up 2%, and SIRI up 3500%. I did a bit of gambiling during the downturn Lehman brothers, Wamu, oops . Also bought into Ford at $1 and sold at $3, Doh.
I could get into a place for around 200k in Chicago, wont be the type of place I wanted or on the best block, but it would work. My issue is that I dont have 20% so I would be paying a PMI... Also I'm a bit scared of only putting 10% down I guess. Also if I get into a subpar place I might be tempted to move in 3-5 years.
wow, you're doing pretty good on that. i read an article about Warren Buffet betting tht S&P was going to do better in the long run than any other stock that you could by......but it's hard to beat 3500% lol
remember to take small bites.....that's my advice on the house issue. you don't have to buy your dream house right off the bat. you could upgrade in a few years.......i do think you should do a tradeoff analysis of rent versus buy though. at 500 a month, you're saving a substantial amount every month! and of course, always remember location location location! even if that buys you a smaller place.
Thanks, figured I would get this advice .
My current employer does have a college degree requirement, but since I did have experience and did well in the interview I got the job. I was hoping that other companies were the same way, not even caring about education after 7-10 years of experience. Now I'm just being lazy and making excuses.
my former company won't even interview someone without a college degree. i think it's stupid. but it's reality.
Thanks, figured I would get this advice .
My current employer does have a college degree requirement, but since I did have experience and did well in the interview I got the job. I was hoping that other companies were the same way, not even caring about education after 7-10 years of experience. Now I'm just being lazy and making excuses.
Well, it's hard not to give that advice. I'm not much older than you (30) and do have a BA from a good school plus my 8 years of industry experience with 7 of that at management/director level, but even then the "next level" is now requiring a masters degree. I have no excuse as my company will pay for it, so I need to get on it. Right now we have a lot of college interns working with us and a couple who are in masters programs. The sad thing is that todays intern getting their masters has a better shot at senior management 10 years from now versus my bachelors and 15+ years experience. It's just the way many companies are going and how they justify slimming the applicant pool.
Even with my degree I'm very much against the current trend of HR culture where degrees seemingly trump all, but this is the direction almost everyone is taking. Heck, at my previous job we were requiring $14 an hour customer service phone reps to have degrees. I thought it was nuts, but here I was turning down people with 5 years of call center experience to hire kids with philosophy degrees.
wow, you're doing pretty good on that. i read an article about Warren Buffet betting tht S&P was going to do better in the long run than any other stock that you could by......but it's hard to beat 3500% lol
remember to take small bites.....that's my advice on the house issue. you don't have to buy your dream house right off the bat. you could upgrade in a few years.......i do think you should do a tradeoff analysis of rent versus buy though. at 500 a month, you're saving a substantial amount every month! and of course, always remember location location location! even if that buys you a smaller place.
ps. PMI is a b&^&^ch!
3500% was a gamble for sure, unfortanetly i only put a couple bucks in that stock or I could be paying for my house in cash.
Rent is currently 1000 bucks (split w/ my gf) but honestly place is a dump. Fairly small, garden apartment, yada yada. We are looking for a new place and the rent will prolly be around 1600 + utilities. I'm able to start working from home a couple days a week and I want a decent place.
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. Also bought into Ford at $1 and sold at $3, Doh.
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