Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Just wanted to see what the community thinks on my financial situation for 24 years old and been working professionally for 2 years:
Income: 57500 per year with about 50% bonus at end of year (approximately $20,000)
Rent: $875 per month, utilities about $100 per month
No car
No credit Card Debt
Checking account balance of $7,000
High Yield Savings account: $1000 contribute $200 per month
Roth IRA: $6,000 contribute Max amount annually or ($400 per month)
Contributing 11% of Salary to 401(k) currently have a balance of $9,000. Company matches up to 6%
Investment Account for Daily Trades/Investments: $17,000 very liquid account
Heres the kicker:
I have about $70,000 in student loans. However, I am responsible for paying 4 loans at approximately $500 per month. Or total balance of $30,000. Fortunately, my parents are helping with the other portion.
I haven't prepaid much of the debt since I believe its more important to shovel money into retirement accounts where I can have compounding be my best friend.
Let me know what you guys think. Am I contributing too much to my 401(k) when I could be putting that to student loans? I think over the long haul if I get the money in investments earlier it will payoff more than just getting my debt off the books.
Sounds like you have good / excellent income. Maybe direct some of the bonus money to eliminating debt but overall I think shoveling cash into tax advantaged retire accounts is very wise..
What kinds of investments are you doing in the 401k? What have the returns been like? What are the expense ratios? Please be more specific about your 'daily trades/investments' account. That to me is a danger signal. I am fairly debt averse--pay off those loans, and that is a guaranteed 5% return. But it might make sense to keep them depending on your other investments. If you were stuck paying the private loans, you should absolutely get rid of those.
My 401(k) is up 8.5% YTD I'm in some aggressive international funds and some index funds. Mostly low expense ratios ie the sp 500 index fund.
I work in finance and believe I have a good knowledge of the markets and that is what the investment account is for. I sell options and make tactical trades based on market conditions. In that account I'm up about 22% YTD.
My logic is I would rather get my money invested now and let it sit then have some cushion to pay down the debt later on when I make more money and have more flexibility.
My 401(k) is up 8.5% YTD I'm in some aggressive international funds and some index funds. Mostly low expense ratios ie the sp 500 index fund.
I work in finance and believe I have a good knowledge of the markets and that is what the investment account is for. I sell options and make tactical trades based on market conditions. In that account I'm up about 22% YTD.
My logic is I would rather get my money invested now and let it sit then have some cushion to pay down the debt later on when I make more money and have more flexibility.
Seriously you are in much better shape than probably 99% of your peers.
My 401(k) is up 8.5% YTD I'm in some aggressive international funds and some index funds. Mostly low expense ratios ie the sp 500 index fund.
I work in finance and believe I have a good knowledge of the markets and that is what the investment account is for. I sell options and make tactical trades based on market conditions. In that account I'm up about 22% YTD.
My logic is I would rather get my money invested now and let it sit then have some cushion to pay down the debt later on when I make more money and have more flexibility.
Pointless...
pay off ALL debt FAST!
Spreading around debt is like a child who spreads his food around on a plate to make it disappear... its an illusion...
right now you ARE IN DEBT. You are only on year 2 of your job, buy year 4 you are going to feel 'trapped' unless you rid yourself of your debt-slavery... PAY IT OFF...
student loans are like sitting on a land mine assuming it cant detonate.
if u ever get behind u become unemployable. u assume this can never never happen, u assume much.
google the term non dischargable debt.
its not manipulation of finances its not teasing the tiger.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Sounds great!
