derek14

Ive been on the board for years now. I bought my own S2k with cash for about 18k, and modded it to the tune of around 8k, paid by myself.

Im 22 years old, and have been working for what seems like my entire life My father is the owner of a fairly large (family owned since its origination in 1907- 100 years old ) company grossing about 5m per year. He is the owner of about 15 (mostly commercial) rental properties throughout the area in his own real estate investment "portfolio." He is fairly self made.

I want to do the same, for the inheritance is ages from now(and I dont care what its worth right now), because my father is a timeless (healthy!) 54 year old man driving a brand new Shelby Cobra GT500

I was the kid that never asked for a dime, and still do not (my father told me to wake up at 8 am when I was 12 years old and he would take me to work with him. I went). I like to work for my money, as I believe we all should. I earn roughly $50k per year, 7.5k of which is expense/untaxed. Im making my way up the corporate ladder so to speak (production mgr. soon to be division mgr.).

Living situation- Rent free/ still with my mother at home after parents horrendous divorce/my mother isn't in the best of shape so I hang around to help her out too. Shes kinda kooky My benefit too!

I am planning on buying/building a house in the next 2-3 years. That or when the market "crashes" (maybe), or when the time is right. Forclosure/auction.. maybe- whatever.... My credit is built to around 700-750 or so.


Heres the deal, for those of who are still interested. The investment stuff.

Our company has a 401k plan, which has matched average of $0.80 on the dollar since its inception. I've met my goal of hoarding $30k in the bank, cash. I now have my 401k recieving 75% of my pay (after reaching the $30k cushion in my savings account), until I reach the $15.5k annual max.

Question- What is the wise investing choice after I reach my 401k max for this year? Begin an IRA? Roth IRA?

Question- I know, I know. The $30k in the bank is really not doing me any good. What is a wise vehicle for investing it? Remember, I would like to keep it relatively liquid, so if the opportunity to purchase a home/forclosure/building lot comes along, I can have near access to it.

I have been reading several books on stock investing. I try to do a lot of research, and am not sure if I am ready for the "market game" so I have not opened an online account anywhere as of yet. I will soon though! I love the input of lots of the users here such as CTHREE, TRITIUM, SAHTT, PEARLWHITE, and others. Good stock tips, learning ideas, etc. Thanks guys


For those of who have read this, I would love some input. Help a young guy out

Wow, long post.....

sahtt

I didn't notice any college or higher education in your plan. You are fortunate enough to be able to afford it and it is an *invaluable* asset in a financially driven world where everyone/everything seems to have a price.

Now to what you are actually interested in. IMO, I'd also hold off on buying a home right now. You didn't you mention where you are located which is fine, but based on your father's success odds are he's located in Cali, probably SoCal, or Florida. Those specific areas are the most dangerous right now. I'm actually in a similar condition as you are besides the free rent situation which adds to your reasons to stay put.

The way you described your 401k is a little bit confusing to me. What I do believe I understand is you are reaching your max contribution and not wanting the remaining $ to go to waste. That's the important part regardless.

How you want to manage your money is very personal and no one in this forum knows exactly what to tell you. You are probably realizing even you* don't have too clear of an idea of all the variables at hand.

First, move that 30k of "cash" in to a high yield savings account. 5% interest or greater. Liquidity is an overrated concern in today's age IMO. You can be 100% in the stock market today and 0% tomorrow with absolutely no cost and about 15 minutes of your time.

The Dow went up almost 300 points today. My portfolio was up almost 2.5% --in a single day--. If you haven't figured it out, I like the stock market. My education helps me there, so does this forum, Jim Cramer, and several novels. No matter what you do, you better study your a$$ off if you want to be successful at it.

Your father probably has more real estate knowledge than I could obtain in a lifetime. Use that asset and read as many books as you can regarding it. No matter what, real estate should only be a portion of your portfolio, even if it's a mix of commercial and residential. Commercial is actually doing quite well in the Houston area as residential has begun to slide.

If I was you, I'd start reading about the stock market, whether it's picking individual stocks, ETF's, index funds, mutual funds, etc. If you were in a decent mutual fund this year, you made some serious $$$ and will probably continue to make more.

What I want you to do outside of all this is to spend at least an hour to understand what compounding interest really means. It can literally change your life, it did mine.

If you have a TI-83 etc. calculator it makes it easy. I want you to play around with figures YOURSELF. See what 10 grand does over 10 years at 5%, 10%, 15% 20%, and 25%. See what it does over 20 years. I don't even need to go beyond that.

This type of background knowledge, very bare bone foundation, this is what educates people which market they want to invest in. This is the type of knowledge that enables someone to cut up their credit card and buy a used s2000 cash because they know what that 12 grand they saved can do over the next 10 years.

You may have a degree in finance for all I know, but just incase you don't, consider my suggestions.

derek14

Thanks for the response sahtt. I am all done with school, majored in Marketing. As for a location, Im in Western Massachusetts. Compound interest is a good friend of mine in the past and still is with my high yield bank account and my 401k bringing an avg of 13% returns this last year

Im gaining ideas on what to do now at this young of an age, so I can be even further ahead of the gang when I am to retire (with a fruitful life in the meantime )

Edit- Sahtt, the idea of putting the bulk of my earnings now into my 401k is to max it asap in the year.... that term compound interest again. If its in there sooner, it will yield a higher overall return later on...

mingster

you've got a great start, i say upgrade yourself with an MBA in a few years (right before 30 would be perfect), sock away the max in 401K + Roth IRA since your income is way below the AGI limit, put the rest in a high yield savings and don't blow the money away on some girl you think you fell in love with (take it from a guy who was just like you at 22, but blew away the money, LOL)

if you want personal rewards that money can't buy (but can help you pay for), take a year off and go live in another country that speaks a completely different language, learn that language and get to know the people, you won't ever regret what you'll get in return, though it can be expensive. i plan on doing that when my kids go to college

cthree

My advice is the same as that I gave in the "I have $25K" thread https://www.s2ki.com/forums/index.ph...f=179&t=500700

The picks are still good but tell me what things you know or are interested in following and I can offer a different mix of stocks to look at. The basics are the same. Liquidity is not a problem. It takes less than a second to sell a stock and you can wire the funds directly where is needs to go right from your account.

QUIKAG

Set-up the Roth right away and max it every year. Do it as long as you can as the current limit is $95k when single.

Talk to your dad about the housing market. His real estate experience will prove invaluable as you feel out your buying opportunities. In the meantime, you're living for free with your mom. Sock the cash away in the meantime. Cash is fine, but keep it in a 5%+ savings account. Keep maxing your 401k and have fun. You are doing an incredible job and seem like a bright kid. (Damn, I sound old and I'm only 30).

Fronks2k

This is probably a little , but I wanted to know if using a credit card wisely (meaning you pay off the full balance each month in a timely manner) will boost one's credit score. I was told that using a credit card doesn't affect your credit score at all, but writing checks does (or maybe both is correct, I'm not sure).

Also, if using a CC wisely does boost credit score what if you have a CC under a different person's account? For example, me and my sister currently share an AmEx Blue account, but she is the primary card holder and added another CC user (me) - would my credit still improve if I use my CC which is under her name?

Sorry for the OT post, but I thought it be better to just post it here instead of starting a new thread. Thanks all .

derek14

[QUOTE=Fronks2k,Jul 13 2007, 11:51 AM] This is probably a little , but I wanted to know if using a credit card wisely (meaning you pay off the full balance each month in a timely manner) will boost one's credit score.

Fronks2k

Derek,

Thanks for the helpful advice and I'll definitely be wary of the benefits and pitfalls of CC usage.

The only question I have now is about using a CC when you're not the primary card holder (for me, my sister is the primary card holder on the AmEx and she added me under her account). Will I still benefit from improving my credit score if I were to make transactions with the AmEx?

Thanks again.

derek14

Depending on how old you are, I suggest getting your own, with your own bank account. Are you connected to a joint account with a family member? If so, I can't be of much help. See if you can possibly get your own account and credit cards in your name. Just dont abuse them