Author Topic: What should I do with all this money?  (Read 2246 times)

windawake

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What should I do with all this money?
« on: January 06, 2014, 10:08:31 AM »
Hello,

I've just started a new job and want to kick off my mustachian savings the right way. After deductions for 401k and insurance, I'll be making about $3,100 net per month. My employer contributes 8% between my 401a and 401k accounts, and I'm set up to contribute 2% to the 401k (I'm making 53k/year).

I'm hesitant to increase my 401k deduction because you can't access this money until you're 59 1/2. I'm 25 now and hoping to retire by 45 at the very latest. I currently will have at least $1,500 to save per month (and hopefully more once I cut back on some things).

What other sorts of investment options are there that will work for someone who wants to retire between 40-45?

matchewed

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Re: What should I do with all this money?
« Reply #1 on: January 06, 2014, 10:10:49 AM »
http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/

Give this one a read. It may or may not change your mind on worrying about the 401k.

madFientist also has a good post on this sort of topic. http://www.madfientist.com/retire-even-earlier/

Zoot Allures

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Re: What should I do with all this money?
« Reply #2 on: January 06, 2014, 10:16:05 AM »
I would max out my 401(k) if I were you. You're only 25, so the opportunity for investment growth is tremendous. Remember, too, that 401(k) contributions lower your tax burden. As you'll learn from this site and others, there are ways to access retirement savings before traditional retirement age (e.g., Roth IRA rollovers).

KingCoin

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Re: What should I do with all this money?
« Reply #3 on: January 06, 2014, 10:18:48 AM »
What other sorts of investment options are there that will work for someone who wants to retire between 40-45?

A diversified portfolio of stocks, bonds, and REITs in low-fee indices. No need to over-think it.

You might consider real estate investments in individual properties or Person to Person lending via something like Lending Club if you want to roll up your sleeves and be more active.

You can safely increase your 401k contribution, which is, at the moment, too modest IMO.
« Last Edit: January 06, 2014, 01:38:47 PM by KingCoin »