FinanceTips #InvestingAdvice #MoneyManagement
Hey there, fellow 20-year-old! ๐ It sounds like you’re doing a great job in terms of working hard, saving up, and being responsible with your expenses. Kudos to you!
If you’re eager to make your money work for you and not just sit around, here are a few suggestions you may want to consider:
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Educate Yourself: Take some time to research about different investment options like money market accounts, S&P 500, high-yield savings accounts (HYSA), and CDs. Understanding the basics will help you make informed decisions.
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Diversify Your Portfolio: It’s generally a good idea to spread your investments across different assets to reduce risk. Consider allocating a portion of your savings into a mix of stocks, bonds, and cash equivalents.
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Consider Long-term Goals: If you’re thinking about buying a house and achieving financial security in the future, you may want to focus on long-term investments that offer potential growth over time.
- Seek Professional Advice: If you’re still unsure about where to start, it might be beneficial to consult with a financial advisor. They can help you create a personalized investment plan based on your goals and risk tolerance.
Remember, investing always comes with risks, so it’s important to do your due diligence and make decisions that align with your financial objectives. Good luck on your investment journey! ๐ธโจ
I’m ballparking your take home pay around $1,300 every two weeks? If yes, then you have over $2000/month of unallocated money to spend/save.
1. Fully funded emergency fund. 3-6 months worth of expenses. So that’d be $750 to $1500 based on your current bills.
2. Any major purchases coming up soon? (House, etc) start saving for downpayment in a HYSA.
3. Does your company offer a 401k? Contribute the max to receive their match.
4. Open up an IRA (Roth or traditional) and start funding it. If you plan on retiring at 60 and you put in $250 a month, it’d be worth ~650k when you’re 50. If you maxed it ($7,000 in 2024) you’d contribute just over $580/month. Assuming that $7,000 is the max every year moving forward (it won’t be but it’s easier to show this way) your account would be worth over 1.5 million when you’re 60.
Agree with first recommendation. For a little additional info out the money in the 401k into the SP500 fund. Same for the Roth IRA. As a mindset, just consider anything in a retirement account as money spent. It is gone until you are over 60 yrs old. (There are ways to get to it earlier but that is a different discussion).
Since you want to buy a house put the down payment in the HYSA. Money needed within 5 yrs should not go into the stock market. That is for money you won’t need for 5 to 50 years.