Author Topic: Dealing with Mustachianism and Older Parents  (Read 1171 times)

CollegeRaven

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Dealing with Mustachianism and Older Parents
« on: April 20, 2017, 11:04:36 PM »
Hi everyone,

I am currently a sophomore in College and studying towards a liberal arts degree in upstate NY. (Pretty good financial aid package before people start talking about that.)

My parents are quite a years after retirement (really late child) and I am their only child so they do coddle me by paying for my living expenses and such. I have talked to them about money and they insist on paying all of my expenses independent of whether I work or not. I work on campus, as an RA (highest paying job).

Calculating for my finances, I have around $3k savings. Given an agreement regarding how I contribute to my tuition, I earn ~1.5k per semester and ~3k in the summer.

 Would it be reasonable to start aggressively investing all my savings in stocks with the knowledge that my parents can bail me out in pretty much any circumstance I find myself in?

To sum up:

Post Retirement parents (who I can consider as financial hedge in extreme situation)
$3k savings  ($1.5k in bonds that I can't touch for 7 more years)
Income of ~1.5k per semester/ 3k per Summer
Aggressively invest or not?

Thank you!

englyn

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Re: Dealing with Mustachianism and Older Parents
« Reply #1 on: April 21, 2017, 01:35:45 AM »
Not. Save it, but there're plenty of things other than stocks you may need it for at this stage.

Far greater impact on FIRE: what are you going to do with a liberal arts degree?

CollegeRaven

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Re: Dealing with Mustachianism and Older Parents
« Reply #2 on: April 21, 2017, 02:11:01 AM »
What am I going to do is a very good question that I haven't fully answered to myself yet.

I am currently doing part Natural sciences, philosophy, italian...

I declared my major as physics as I have very good grades in it but I'll probably end up going to grad school for molecular biology or something similar.

My Uni has a very good alumni network and reputation so I don't think getting a job will be a big issue if I decide to do that instead of grad school.

englyn

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Re: Dealing with Mustachianism and Older Parents
« Reply #3 on: April 21, 2017, 02:42:49 AM »
Cool, sounds really interesting, but seriously, start looking into fields of employment that are in demand and pay well. "In demand" means you can be choosier about who you work for and with, making your working life far more pleasant, as well as less unemployment and better salary due to market forces. "Pay well" - if you're after FIRE, you're going to get FI after a lot fewer hours of working if your hourly rate in one field of work is double what it might be in another.

I'm sorry, I know you didn't ask for career advice. It's just that I think your current attention in this area is going to make a far far greater difference to your financial future and your happiness in the process than learning about investing right now. I have some awesome recommendations, links and quotes collected on this if you aren't tired of my subject change yet.

CollegeRaven

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Re: Dealing with Mustachianism and Older Parents
« Reply #4 on: April 21, 2017, 03:10:57 AM »
I'm here to learn so any kind of information that might be pertinent to my interests (as your advice definitely is) is appealing to me. I would love to hear your recommendations on the subject!

SweetTPie

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Re: Dealing with Mustachianism and Older Parents
« Reply #5 on: April 21, 2017, 09:24:33 AM »
I was in a similar situation: My parents paid for the part of my schooling not covered by scholarships (~50%), and I worked summer jobs and internships.  I basically was only covering any eating out and books from my own savings.  (I didn't have a car or phone.)

With my parent's blessings, since they were my backup plan as well, I used part of that money to start and fully fund a Roth IRA.  My plan was to pull out the contribution part if something catastrophic happened and I needed the few thousand dollars I had tucked away.  I never needed to, and now those contributions have been growing and earning interest for 10+ years.

If the money you are earning is reported as earned income to the IRS, I would look into doing the same- opening a Roth IRA.  (I'm a Vanguard fan, fwiw.)  Tuck that money away in a good stock index fund.  Yes, Roth IRA is post-tax money, but I bet you're paying (at least close to) no tax now anyway.

Caveat:
I would say to get your parents' blessing before tying up money too much, since you are thinking that they'll be there if needed.  It's what I would consider a politeness thing- don't just take that support for granted as you head into adulthood.  You may also want to make a savings fund to hold as a 'adult launch' fund for after graduation.  Professional/ interviewing clothes, relocating, apartment fees, furnishings, etc. can be unexpected expenses when starting out post school.

ooeei

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Re: Dealing with Mustachianism and Older Parents
« Reply #6 on: April 21, 2017, 11:42:28 AM »
  You may also want to make a savings fund to hold as a 'adult launch' fund for after graduation.  Professional/ interviewing clothes, relocating, apartment fees, furnishings, etc. can be unexpected expenses when starting out post school.

This is a pretty good point. Interviewing and then moving to a new city for a job can add up pretty quickly. Interview clothes and transportation, 1st and last months rent for an apartment along with application fees, utilities deposits, and a few things here and there that you might need before your first paycheck can add up to $3000-5000 surprisingly fast.  Obviously location plays a role, but as of now you don't know where you'll be going.  An apartment in certain cities will be around $1500-2000/month.  More reasonable places it'll be under $1000. 

As for career advice, try and get an internship in a company that does something that you want to do someday, and kick ass at it.  Work extra hours, volunteer for tasks, etc etc. That will be worth far than the $3000 you make at a job over the summer.  Some internships pay pretty well too.  The bigger and more recognizable the company is, the better.  That will have a far greater impact on your hiring some day than pretty much anything else.  It'll also give you a window in to the job you may want, and some connections should you decide to work for that company after graduating. 
« Last Edit: April 21, 2017, 11:45:10 AM by ooeei »

englyn

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Re: Dealing with Mustachianism and Older Parents
« Reply #7 on: April 23, 2017, 09:01:29 PM »
This post from another mustachian on this forum! some years ago changed the way I think about careers so much I've had it saved ever since.

Quote
It's interesting, I feel like this is one of the things our society gets backwards.

Advertising, films etc. are all about 'follow your dream' and 'find your passion' and 'be true to yourself', but I don't think this framing is particularly helpful in the world of work.

From my personal experience, I think it goes the other way around. A field of study or work becomes more interesting as you come to have a deeper understanding of it, and more experience and knowledge. A path which looks dry from the outside (I'm an accountant) is actually rewarding on the inside (I get to help my university design degree courses etc., and plan strategy more generally, and I've discovered myself caring a lot about things like costing models where the appeal wouldn't be obvious to outsiders).

In other words, there isn't A Path. You choose one of the paths, and make it your own.

This is fantastic, read it read it: https://sivers.org/balance

Also https://sivers.org/book/SoGood for one person's summary of the book recommended there, So Good They Can't Ignore You - by Cal Newport, or there's a good interview with the author at http://www.artofmanliness.com/2014/08/22/art-of-manliness-podcast-78-the-myth-of-following-your-passion/
Quote
Instead he looks at what the research says about what gives us a feeling of fulfillment in our work and what we can do to cultivate that feeling.
[...]
If you look at the decades of research on work place motivation and satisfaction we see preexisting interest for your work actually plays a very small, if perhaps nonexistent role...
So the type of factors we know from the research that lead to a sense of passion for your work include a sense of autonomy, a sense of competence or mastery, a sense of connection to people or a mission, a sense of impacting and a sense of creativity. General traits like those lead people to feel passion about your work. So broadly speaking your goal should be to maximize those types of traits in your working life and passion will follow.