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Have a job after college now trying to plan for the long term, advice?

D

DAM

Diamond Member
401K, IRA, ETC.

I know there is not one single answer for this question but what is usually some good advice when talking about long term savings?

My company matches up to 6% so I would assume that this would be the best bet, but what then? Just let that money idle there? For how long? Should I save some extra cash somewhere else lets say 2% argh!!! Why didn't I learn this in school?



dam(confused)
 
Definitely contribute to your 401K AT LEAST as much as they will match you for - ITS FREE MONEY! Assuming it goes in before taxes, you are also shrinking the amount of money you have to pay tax on. Other than that, save save save. Roth IRAs are good bc you dont pay money on the interest you make. Most of these type of accounts have strict penalties for taking it out early, but SOME offer exceptions for things like college and primary residence purchases.
 
Ok, here's a long term plan for you:

This weekend, get really drunk. Then make a plan to do that next weekend as well.
 
Originally posted by: DAM
401K, IRA, ETC.

I know there is not one single answer for this question but what is usually some good advice when talking about long term savings?

My company matches up to 6% so I would assume that this would be the best bet, but what then? Just let that money idle there? For how long? Should I save some extra cash somewhere else lets say 2% argh!!! Why didn't I learn this in school?



dam(confused)
Click to expand...

they match dollar for dollar up to 6 percent?

thats awesome! defintly put at least that much in every month.

after college i contributed heavily into a 401k and after i bought my house i stopped and starting putting all my my extra cash into the mortgage. many people may disagree with my decision but personally i feel like my monthly expenses are the ones i want to get rid of firstand my mortgage is my biggest expense right now.
 
Originally posted by: HardcoreRobot
Definitely contribute to your 401K AT LEAST as much as they will match you for - ITS FREE MONEY! Assuming it goes in before taxes, you are also shrinking the amount of money you have to pay tax on. Other than that, save save save. Roth IRAs are good bc you dont pay money on the interest you make. Most of these type of accounts have strict penalties for taking it out early, but SOME offer exceptions for things like college and primary residence purchases.
Click to expand...

I'm not too familiar with it, but I believe Roth IRAs let you take out your principle without penalty. Of course, it's a retirement account, so you should imagine the money is off limits unless you really need it (I believe there are exceptions for withdrawing money for purchasing a house or if you're injured, but once again, I'm not certain). And yes, leave it idle (well, hopefully, it's gaining interest and not "idle"); don't watch the ticker every week and decide whether you want to put money in it or not. Have them deposit a fixed amount for you ever month and let dollar-cost averaging work things out.

That's about all I know. I would like to be enlightened on this as well, so correct my mistakes.
 
Right now, I'm just contributing 6% to 401k, and 4% to the stock purchase plan. 10% is a good start for me, since I'm going to need about half of my net pay per month for rent.
 
One key word: Diversify! Put in the 6% match into your 401K, and keep it going till you retire. Sign up for a Roth IRA with T Rowe Price or another good firm and put in 2,000 per year. Invest in some growth stocks. If you have a lot of money invest in Real Estate.
 
Diversify your investment instruments. Place the money, re-invest dividends and forget about withdrawing it except in case of dire emergency. Compounding rules....
Establish an IRA. There are different types for different circumstances. Learn which is best for you and fund it ASAP.
Save any extra money, do not spend.
Live BELOW your means.
Having a bunch of toys that you have to haul from rental house to rental house gets old and trashes the toys.
"Mind the pennies, and the dollars will take care of themselves" Benjamin Franklin
 
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