and now i feel a little queasy. not sure where to put this, but i feel like i need to breathe into a paper bag.
Backstory:
so I just moved into a new apartment with a friend of mine, who i know is well compensated, because she is a consultant. she lives on frozen veggies and granola bars, and shares a cheap apartment with me., so i know she is a frugal. she also dreams of not having to work for the rest of her life.
story time:
we are both sitting on the couch, fiddling around on our laptops , and out of the blue she asks " do you invest?"
i reply, "not really, unless you count my 401k."
then we start to talk more, and she mentions that she saves all of her money, but its siting in a savings account. i tell her how inflation is eating away at it and how there are more efficient vehicles for her cash, if she wants to save it to use for early retirement. i tell her that i max my 401k, and am working on finishing up maxing last years IRA.
she says she has a 401k ,and maybe an IRA but she doesn't know much else. she thinks maxing a 401k is the same as getting the maximum employer match. she hasn't even invested any or it. it all sits in MMA. i inform her of the true max and tell her how it helps with taxes and early retirement.
five seconds later she has her fidelity account open online and she changes her 401k to max contributions. then she asks about how much should go into an IRA. I tell her the annual limits and mention that there is still time for 2015.
right in front of my face, she funds 2015, 2016, signs up to max her 401k and then asked me which funds to put all this in.
at this point, i am feeling nauseous because of her easy acceptance, level of trust and willingness to move money around based on my say so.
we talk about mutual funds, index funds and ETF's.
she demands all stock, cause she knows even if it goes down tomorrow, eventually it will all go up.
at the end of all of this , my room mate is now in low cost, s and p 500 tracking ETFS, and similar, and i have helped her invest over $10k.
later she says she wants to talk about after tax investments, cause after all that ,she still has more than a 6 month cash cushion in her savings account.
i now feel like the stock market will crash on Tuesday and i will rot in some strange hell .