E46 BMW Social Directory E46 FAQ 3-Series Discussion Forums BMW Photo Gallery BMW 3-Series Technical Information E46 Fanatics - The Ultimate BMW Resource BMW Vendors General E46 Forum The Tire Rack's Tire Wheel Forum Forced Induction Forum The Off-Topic The E46 BMW Showroom For Sale, For Trade or Wanting to Buy

Welcome to the E46Fanatics forums. E46Fanatics is the premiere website for BMW 3 series owners around the world with interactive forums, a geographical enthusiast directory, photo galleries, and technical information for BMW enthusiasts.

You are currently viewing our boards as a guest which gives you limited access to view most discussions and access our other features. By joining our free community you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content and access many other special features. Registration is fast, simple and absolutely free so please, join our community today!

If you have any problems with the registration process or your account login, please contact contact us.

Go Back   E46Fanatics > Everything Else > The Off-Topic > Money Matters

Money Matters
Financial, Stock, Investment etc. posts here.

Reply
 
Thread Tools Search this Thread Rate Thread Display Modes
Old 06-21-2013, 08:40 AM   #1
iloveyou
Registered User
 
Join Date: Jun 2013
Location: NC
Posts: 12
My Ride: 96 Maxima
Help a youngin out.

Just started my first real job and I need some advice on what to do with my money.

I'm definitely gonna open a Roth and a 401k can't do that until I have been with my company for a year.

Now I have heard conflicting things on savings account. Some people have said to get your 6 month of savings before investing any money in retirement or anything else for that matter. Also should I put my savings in a savings account or something else with a higher return ?

And finally what types of investments should I invest my extra couple hundred bucks a month in ?
iloveyou is offline   Reply With Quote
Old 06-21-2013, 09:24 AM   #2
BMWCaptain
Registered User
 
Join Date: Sep 2011
Location: TEXAS - Where I give Real World advice and don't just criticize others. People here need to RESPECT other's opinions!
Posts: 1,679
My Ride: 03 325iT SportWagon
First create a savings account reserve for BMW e46 repairs.
__________________
Founding Member of the Club of Dangerous Fanatics

Engine swap, HG, tranny swap, GM & ZF tranny rebuilds, shocks, struts, brakes, WPs, Thermostats, belts, tensioners, fuel pumps, radiators, window regs, hoses, PS pump, Spark Plugs, VCGs, coils, fuel filters, CVVs, VANOS seals, rack, LCABs, Exp. Tanks, OFHGs, RCABs, OP, boots, ABS, GUIDOs, starter, A/C, DISA, Diff, SAP

Ultra Premium Grand 10 Star+ Super Duper BMW-pedic Sport Plus +++
BMWCaptain is offline   Reply With Quote
Old 06-21-2013, 10:26 AM   #3
poynter
Registered User
 
Join Date: Jun 2005
Location: OT
Posts: 807
My Ride: Jetta
Kudos for at least thinking of saving money.
__________________
-tony
poynter is offline   Reply With Quote
Old 06-21-2013, 02:04 PM   #4
Wraisil
Registered User
 
Join Date: Apr 2004
Location: Acworth, GA
Posts: 216
My Ride: 2010 Infiniti G37
Quote:
Originally Posted by iloveyou View Post
Just started my first real job and I need some advice on what to do with my money.

I'm definitely gonna open a Roth and a 401k can't do that until I have been with my company for a year.

Now I have heard conflicting things on savings account. Some people have said to get your 6 month of savings before investing any money in retirement or anything else for that matter. Also should I put my savings in a savings account or something else with a higher return ?

And finally what types of investments should I invest my extra couple hundred bucks a month in ?
First off, congratulations on getting your first real job!

Now, on to the fun stuff...

You have 1 year until you can start your 401(k). Obviously, not knowing your personal financial details makes giving specific recommendations impossible so here are some generic ones. Save at least 2-3 months worth of expenses as fast as you can and put this in a liquid account. I recommend (especially for people who haven't yet been able to really "live outside their means") that a person aim to spend no more than 50% of their gross income when starting out. If you can do that, or get close to it, then you will be setting yourself up for financial success in the future. Not to mention, 50% of your gross with your first real job is still probably an upgraded lifestyle from what you had before then.

So, assuming you can do that, we'll assume the rest after taxes is 100% of your "total savings". Of that, initially put all of that away for your emergency savings. Doing so should let you get to 3 months of expenses saved within 6 months. Once that is established, switch to 50% of your total savings going to emergency savings and 50% going to a Roth IRA (assuming your first job isn't in a 28% income-tax bracket). When you get to 9 months put away in your emergency savings (easily done by the end of year two if you can follow this advice), then raise your retirement savings to 90% of your total savings and continue putting 10% in your emergency savings (this is to account for making it grow to ensure you can handle setbacks/problems in the future and cover increases in pay over time).

When that 90% maxes out your tax-advantaged retirement accounts eventually, then you just put in your maximum tax-advantaged amount and start investing in your own personal brokerage account with half of what you can no longer put in and you put the other half towards increases in lifestyle.

Similarly, when you get a pay raise, since you are using a percentage of your income then 1/2 of that raise will go to lifestyle increases and 1/2 will go towards investments/saving. Until, of course, you are no longer investing/saving half because you have maximized your tax-advantaged contributions.

This is very generic because of lack of details available, but is a solid foundation. Specifics (like whether to invest in a 401(k), Roth IRA etc) are situation dependent and I don't know your situation's specifics so I can't give you advice on that at the moment.

As far as "where" to allocate investments, here is a very basic primer on selecting allocations for limited fund plans (such as most 401(k)'s etc)
http://jlcnuke.wordpress.com/2010/01...ing-up-a-401k/

Here is a spreadsheet to help with that if you choose to use it:
http://www.gceenterprises.com/jlcnuk...worksheet.xlsx
Wraisil is offline   Reply With Quote
Old 06-21-2013, 02:53 PM   #5
iloveyou
Registered User
 
Join Date: Jun 2013
Location: NC
Posts: 12
My Ride: 96 Maxima
Quote:
Originally Posted by Wraisil View Post
First off, congratulations on getting your first real job!

Now, on to the fun stuff...

You have 1 year until you can start your 401(k). Obviously, not knowing your personal financial details makes giving specific recommendations impossible so here are some generic ones. Save at least 2-3 months worth of expenses as fast as you can and put this in a liquid account. I recommend (especially for people who haven't yet been able to really "live outside their means") that a person aim to spend no more than 50% of their gross income when starting out. If you can do that, or get close to it, then you will be setting yourself up for financial success in the future. Not to mention, 50% of your gross with your first real job is still probably an upgraded lifestyle from what you had before then.

So, assuming you can do that, we'll assume the rest after taxes is 100% of your "total savings". Of that, initially put all of that away for your emergency savings. Doing so should let you get to 3 months of expenses saved within 6 months. Once that is established, switch to 50% of your total savings going to emergency savings and 50% going to a Roth IRA (assuming your first job isn't in a 28% income-tax bracket). When you get to 9 months put away in your emergency savings (easily done by the end of year two if you can follow this advice), then raise your retirement savings to 90% of your total savings and continue putting 10% in your emergency savings (this is to account for making it grow to ensure you can handle setbacks/problems in the future and cover increases in pay over time).

When that 90% maxes out your tax-advantaged retirement accounts eventually, then you just put in your maximum tax-advantaged amount and start investing in your own personal brokerage account with half of what you can no longer put in and you put the other half towards increases in lifestyle.

Similarly, when you get a pay raise, since you are using a percentage of your income then 1/2 of that raise will go to lifestyle increases and 1/2 will go towards investments/saving. Until, of course, you are no longer investing/saving half because you have maximized your tax-advantaged contributions.

This is very generic because of lack of details available, but is a solid foundation. Specifics (like whether to invest in a 401(k), Roth IRA etc) are situation dependent and I don't know your situation's specifics so I can't give you advice on that at the moment.

As far as "where" to allocate investments, here is a very basic primer on selecting allocations for limited fund plans (such as most 401(k)'s etc)
http://jlcnuke.wordpress.com/2010/01...ing-up-a-401k/

Here is a spreadsheet to help with that if you choose to use it:
http://www.gceenterprises.com/jlcnuk...worksheet.xlsx
Wow! Thanks man very helpful. I am in the 25% tax bracket if that helps.
iloveyou is offline   Reply With Quote
Old 06-21-2013, 02:58 PM   #6
Wraisil
Registered User
 
Join Date: Apr 2004
Location: Acworth, GA
Posts: 216
My Ride: 2010 Infiniti G37
Quote:
Originally Posted by iloveyou View Post
Wow! Thanks man very helpful. I am in the 25% tax bracket if that helps.
Assuming you are single and not at the very upper end of the bracket, you should (when able) contribute to your 401(k) up to the matching your company provides then invest in a Roth until that is maxed out and any leftover from your "total savings" put into your 401(k). Under $80k/year salary is "generally" more advantageous (assuming single income) to use a Roth instead of traditional 401(k)/IRA except when receiving a match. IRA's, however, have a much smaller limit than 401(k)'s for tax advantaged contributions so for many people (likely yourself included) it is best to do max the Roth contribution and then contribute any further money to your 401(k) without match to maximize tax-advantaged accounts to the highest possible/permitted by the IRS.
Wraisil is offline   Reply With Quote
Old 06-21-2013, 03:16 PM   #7
iloveyou
Registered User
 
Join Date: Jun 2013
Location: NC
Posts: 12
My Ride: 96 Maxima
Quote:
Originally Posted by Wraisil View Post
Assuming you are single and not at the very upper end of the bracket, you should (when able) contribute to your 401(k) up to the matching your company provides then invest in a Roth until that is maxed out and any leftover from your "total savings" put into your 401(k). Under $80k/year salary is "generally" more advantageous (assuming single income) to use a Roth instead of traditional 401(k)/IRA except when receiving a match. IRA's, however, have a much smaller limit than 401(k)'s for tax advantaged contributions so for many people (likely yourself included) it is best to do max the Roth contribution and then contribute any further money to your 401(k) without match to maximize tax-advantaged accounts to the highest possible/permitted by the IRS.
My company matches up to 5%. So I should max out my Roth and do 5% in 401k and any left over put in my 401 K even though it wont be matched ?
iloveyou is offline   Reply With Quote
Old 06-21-2013, 03:55 PM   #8
Wraisil
Registered User
 
Join Date: Apr 2004
Location: Acworth, GA
Posts: 216
My Ride: 2010 Infiniti G37
Quote:
Originally Posted by iloveyou View Post
My company matches up to 5%. So I should max out my Roth and do 5% in 401k and any left over put in my 401 K even though it wont be matched ?
First step (when available to you) is to get the full match. Think of their match as part of your ROI and if they're matching 100% up to 5% then your 5% investment already has a 100% ROI. Then max out the Roth for the tax advantages it has. Finally is to put whatever else you can into the 401(k) to finish maximizing your tax-advantage. Don't, however, put more than the max pre-tax contribution into your 401(k). If/when you get to that point, the extra should go to an investment account that doesn't have the restrictions that IRA's/401(k)'s have.
Wraisil is offline   Reply With Quote
Old 06-25-2013, 05:16 PM   #9
5ynd1cat3
Registered User
 
Join Date: Oct 2009
Location: Cincinnati
Posts: 479
My Ride: swagger wagon
Re: Help a youngin out.

You're young. Read this.



Sent from BimmerApp mobile app
Attached Thumbnails
Click image for larger version

Name:	1372198592727.jpg
Views:	48
Size:	71.2 KB
ID:	513082  
__________________
5ynd1cat3 is offline   Reply With Quote
Old 06-25-2013, 09:59 PM   #10
Raymond42262
Registered User
 
Join Date: Oct 2005
Location: The South
Posts: 453
My Ride: Is German
Do you have any student loans ?

Do you have any cc debt ?
__________________
"The grand essentials to happiness in this life are something to do, someone to love, and something to hope for."....Joseph Addison
--------------------
Raymond42262 is offline   Reply With Quote
Old 06-26-2013, 02:29 AM   #11
iloveyou
Registered User
 
Join Date: Jun 2013
Location: NC
Posts: 12
My Ride: 96 Maxima
Quote:
Originally Posted by Raymond42262 View Post
Do you have any student loans ?

Do you have any cc debt ?
Yeah a few grand in student loans, but i'm still taking a few classes so I dont have to pay them off yet.

No CC debt.
iloveyou is offline   Reply With Quote
Old 06-26-2013, 06:21 AM   #12
5ynd1cat3
Registered User
 
Join Date: Oct 2009
Location: Cincinnati
Posts: 479
My Ride: swagger wagon
Re: Help a youngin out.

Quote:
Originally Posted by iloveyou View Post
Yeah a few grand in student loans, but i'm still taking a few classes so I dont have to pay them off yet.

No CC debt.
Attack the student loans and get them out of your life. Sallie Mae has a bad habit of moving into your spare bedroom and never leaving.

Great job on not having cc debt. Do yourself a huge favor and don't get any.

Are student loans the only debt you have? Anything else? Car payments, etc?

Sent from BimmerApp mobile app
__________________

Last edited by 5ynd1cat3; 06-26-2013 at 06:35 AM.
5ynd1cat3 is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Censor is ON





All times are GMT -5. The time now is 05:12 AM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
(c) 1999 - 2011 performanceIX Inc - privacy policy - terms of use