Hi Blind, I am 2 years out of college, and just landed an 110k job today. I know it's not a lot on Blind, but as an immigrant I now make more than my mother. I know that with great power comes with great responsibility and this is why I am here to ask for advice so I won't mess my life up. I grew up with a single mother and didn't have a father figure growing up. This made me actually seek out male mentors when I was younger, but the results has not being the best. Some guys are okay but they have their own issues and I got scammed a few times by so called mentors. I'm currently living on a 35 to 40k expenses with my girlfriend. Living in a HCL, TX. I am currently using dollar cost avg into low cost index funds and maybe 1% investment into a diversified basket of crypt of, and saving the rest. Most of my big expenses are going out to eat, books, and teach related hobbies. (Building computers) I would love to hear some advice for people like me. I know that lifestyle creep is a big one but how do you avoid it? #tech #swe #young #money Edit: I am a US citizen, but immigrated to the US when I was in middle school. First thing, I am planning doing is to renting out a nicer apartment for my mom. I have 6 months of expenses saved up, and about 50k in the stock market right now. All low cost index funds.
Invest invest invest
This. At the current rate of Dollar printing, your savings is a depreciating value if your money is not working for you
80% of my money is in low cost index and 1% in crypto
Two words for you kid: compound interest!
Yep, learned it in college but didn't have money to save. I have been putting as much as I can into low cost index :)
If you're putting money into an index fund and maxing your 401k you're already so far ahead of most people. Keep growing your skill set so you can, in turn, grow that 110k/year into something more. Don't forget to give some to your mom and take your bf/gf on a nice date once in a while. Have you ever been to Hawaii? You should check it out :) congrats OP you achieved a massive milestone and you should take a step back to observe just how far you've come.
Spend wisely and keep investing each month! Continue DCAing. Limit over the top purchases and purchases based on wants vs needs..
How do you figure out what wants and needs are?
Trial and error. But increase your spending and lifestyle creep slowly so you are less likely to overshoot.
Best thing you can do is keep living like you’re not making more money. It’s not what you make, but what you keep. First, get 3-6 months of expenses in cash savings in a high yield savings account, then max out your 401k. After that, if you’re saving for the long term, put everything in an index fund that tracks the market. If you’re saving for the short term and can’t stand any volatility put it in a high yield savings account. Best thing you can do at your age is form good habits. Also, don’t forget to treat yourself every now and again. Just be responsible and stick to your savings goals.
Thank you! I have 6 months of expenses saved up, my saving account gets 0.65%. It's low, doesn't even beat inflation. I have read about crypto staking that pays you 6%... But I honestly do not know enough about it so I don't want to touch it...
save and retire early
First of all, congrats! It's a huge accomplishment! Your expenses are fine. Just be aware of lifestyle creep like upgrading to better housing etc. Keep a budget using financial tracking apps like mint or similar services. Investment/saving wise, you should have a 6-month emergency saving as cash that you can readily access and rest should go toward investments. You should have two types of investment funds: 1/ long-term ones that are stable and 2/ fun money to play around with (crypto etc). In either case, you should go in with the mentality that you don't mind losing it all. Don't be too opportunistic/greedy (aka, put your entire life savings into gamestop). All the rules about how to be financially responsible are super simple. The difficult part is your own mindset and discipline. As long as you don't get emotions involved when making financial decisions (helping out family being the exception), you'll be fine
Thank you! I honestly don't feel super happy but more anxious. Money brings more problems ha. I love your advice and I would say I am lime 90% there. I do struggle with buying snacks and going out to eat to relief stress of work... I also have a tendency to help out strangers or friends by buying things for them... Anyone that is a Buddhist experienced this? I feel very guilty when I see the homeless.
Not saying you should not donate to charities/help out friends (treating a meal or buying them a birthday gift etc), but that should be part of your budget. You shouldn't derail your long-term financial plan from donating and helping friends out.
You're on the right track, dollar cost average into index funds. Keep doing it for next 20 years, you will have millions of dollars.
I honestly don't know what a 100k lifestyle or like what a 1 million life looks like. I read about FIRE, but I can't really imagine what that would feel like... I was talking to my grandpa and he said I am making what he made in 50 years combined. I came from a developing country.
I understand, I am from a third world country too. My parents never had any money to save. We lived pay cheque to pay cheque and they never were able to save a lot. They never were even taught about personal finance so they didn't know that very small amounts of money saved over a long period of time can translate to extremely large amounts. In your case, if you just invest 3K every month for 20 years and assume a 10% CAGR, it would translate to $2.2 Million while your invested amount would only be $720K
Don't spend on stuff you don't need. It will help you in the long run
How do you tell needs vs wants? For example, I am a maximize I research everything and want the best... Also I keep falling for marketing :/
I know you're eager to give back to your mom but it's too soon. Unless she's struggling financially or something just stick to small gifts until you have a more meaningful sum.
Unfortunately she does struggle financially she just doesn't say it. She was taught the old way of take the pay that's given and work 3x as hard. Her tc is on the super low end with 15 yoe. I want her to live a better life than she is now.
Life is like oxygen mask protocol, put your own first before helping others. You barely have anything saved yet and sounds like your mom has a job that can sustain her living.
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Hey! Join our financial independence discord - we have lots of blind/tech folks sharing info on personal finance http://discord.gg/rdGNaa2AzD But to answer your question, there's an investment and saving order. You want to spend as little as possible while simultaneously making healthy and safe decisions, and saving for your future in the smartest way possible. This includes things like minimizing expenses and also using tax advantaged accounts like 401k, HSA, 529, IRA, and more, to your benefit.