Help a clueless 22yo be smart with money
starting my first job out of school in a month and have been very fortunate to have 0 debt bc full ride. want to be financially responsible and was wondering if anyone here had any advice to offer outside of what the sidebar on /r/personalfinance laid out. details: 22yo moving to high COL area (DC/NOVA) for job role - business analyst role TC - $90,000 + up to 8% bonus, no equity rent - $1500/month debt- $0 will not have car payments money - $30,000 in a 2% savings account my plan rn is to max out my 401k every year and toss $1000/month on top of that into savings bc i plan on going back to get my MBA om a few years. does it make sense to throw a significant chunk of my savings into some long term investments (index funds) if im planning on going to school? how do i set myself up for financial wellbeing at this point outside of doing well at work and getting a bigger check? thanks in advance
Good time to take some high risk investments as well. As you can recover from them easily if needed.
If you'll need the cash for school don't put it into the stock market. Would suck if a recession fucked up your life plans.
You need to load up on debt
1) max out 401k up to the match 2) max out ($6k/yr) your Roth IRA. You can access the principal you put in (not the interest earned!) Anytime you need it without penalty 3) start a taxable investment account with vanguard, invest in a Target date (yr 2065 should work) index fund 4) have some fund, spend on you a little, and just make sure you have a small surplus after all the above each month. What brokerage and what index funds you choose are not the operative part in all this, it's setting up the auto investments. GOOD SMART INVESTING IS BORING!!!! So don't worry that it feels that way, it should be like brushing your teeth, necessary and boring.
Saved up $30k as an undergrad? You’re in a much better place than many
Full ride at school in low COL college town. Internship money + parents helping. Got quite lucky, so I don't want to ruin it by being dumb with money
Good for you, and great perspective!
Your money’s purchasing power reduces in a bank account. Invest in an index fund. QQQQ or SPY. When ready, buy a condo with 50-60k down and rest from the bank. Save on rent and build equity. Remember, no pain no gain. Good luck!
Solid plan overall. If you have cash you don't plan to touch long term (5+ years) it definitely makes sense to put it in index funds.