Hello Iam 25 yrs old. First job. Living in bay area. Iam saving 4500$ every month. Iam single. Is this a good target? My base is 150. Currently not investing because i believe market will crash sometime this year..but thats regardless. Tc 188 , sde3
rent and expenses less than 3k/month?
Why seek validation on blind
Hey. I just turned 25. This is my 1st job mate. Iam still a kid. Just wanted to know if iam in the right direction.
If you save 4500 per month for 15 years, at an average interest rate of 5 percent compounded annually (when you’re ready to invest), you will have 1.174m. If you just let it sit for another 15, contributing nothing, in another 15 years you’ll have 2.44m. So, yes, good job!
And 5% is extremely conservative … unless you are already adjusting for inflation
Even if market crashes later this year, won’t it be beneficial to still have invested long term (time in the market vs timing the market principle and all that)? I maxed out 2024 Roth this past week (investing completely in VOO) so looking to justify I suppose.
Your reasoning is justified if you are in for long term.
I made a similar mistake of not investing… either put it in high yield savings account or VOO… I would recommend to max out roth 401k (not traditional) and put 7k/year in back door roth ira as well. Back door roth ira, you can withdraw initial investment (not gain) after 5 years. So not a lot of risk due to visa. Good job 👍
Future is not correlated with past.
My answer to these questions is always "no". If you need to get external validation on your savings rates you will always be comparing to others and it will never be enough. You need to figure out what your financial goals are, what you need to accomplish those goals, and put a plan in place to get there. Doesn't matter what anyone else thinks.
Don’t time the market. Invest a little at a time if you’re that paranoid. I make less than most folks on this board but likely have a much higher NW because I learned how to take on and manage risk. Though there’s nothing wrong with it, putting your money under your mattress will just make you poor in the long run. S&P returns 8%? A year on average, take that as a baseline.
You are 25 ? Put all in the market
That’s incredibly good given your base! You should definitely be investing though. At minimum, put that money into a HYSA that earns 5% immediately.
$4500 after maxing 401k and other benefits? If so, that's saving $54000 a year, it's pretty good if you ask me.
Including 401 i save 5500/month..
You should probably max your 401k contribution then, it sounds like you're only putting in $1000 / month there for a total of 12k a year, max is around 21k. Either way, saving $54000 a year ($4500/month) is good.