Author Topic: 26 years old, starting out...What would you do if you were me!?  (Read 5837 times)

ShawnRulesAll

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26 years old, starting out...What would you do if you were me!?
« on: October 09, 2012, 11:27:12 AM »
Hey guys, long time lurker.

I'm a 26 year old student living at home with parents. I am way behind (relatively) in life and am looking for a good path to retire early and grow my mustache. I live in Cheyenne, WY(population ~50k) about 90 minutes/miles north of Denver CO. I am studying Business Information/IT at my local community college. I am looking for advice(dont hold back) on what you would do and how I can obtain the best path towards early retirement. I am very interested in rental homes and hope to buy a duplex(once i get income and bank approval) and live with my GF and rent out the other half to cover mortgage, then I will repeat 5x. here are some stats:
parents live out of town about 2.5 miles.
8 miles from local community college
6.5 miles from new job starting today at Kohls-min wage :( but its a job
8.5 miles from Girlfriends house that I see almost daily
2001 GMC sonoma gas waster (maybe 120-160$month gas)
$1000 in checking account
$1200 in bonds at bank
$1100 in mutual fund retirement from old job

Currently I'm applying at hospital for IT job, I might have a chance and I have family that works there that hopefully might get me a shot there. What path/route would you take if you were me? What would you do? What should I start doing?
Help me out mustachians! You're my only hope!

ShawnRulesAll

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #1 on: October 09, 2012, 11:27:43 AM »
Don't hold back, I have thick skin. and I will be transparent. and I want to update progress.
Job at Kohls is part-time and possibly just seasonal. 
about 2 years before I get my bachelors, I am considering getting assosciates in IT though and just doing that.
Parents dont charge me rent or food. Only expense is Gas(120-160$/month) and maybe 30$/month in pizza (1x a week)
School is super free, pell grant + scholarships = I actually profit about 1800$ a semester
« Last Edit: October 09, 2012, 11:32:30 AM by ShawnRulesAll »

jpo

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #2 on: October 09, 2012, 12:22:53 PM »
What type of position are you targeting once you have your degree? If a Bachelor's will open more doors than an Associate's and you make money every semester, it makes sense to get the Bachelor's.

Is it possible to sell the truck and buy a commuter bike? It seems like most of the time you could bike to school and work, and there's an airport where you can rent a car if you really need one.

ShawnRulesAll

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #3 on: October 09, 2012, 12:38:33 PM »
I am looking for a position in IT most likely. I can get my associates possibly this spring or def by next fall. It would take me about 45 minutes-ish to bike to school so i don't think it would be very practical until I can move in town. Our college is located south of town which makes matters worse.
is this being complainy-pants or a good justification?
everything is located so damn far-away here...

Karl

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #4 on: October 09, 2012, 12:45:55 PM »
If you wish to manage/own rental property, I strongly recommend (as a former building manager) letting someone else pay you to make your mistakes for a couple of years.  Find a job, at least part-time, managing an apartment building (showing/renting apartments, turning over apartments for new tenants, maintenance, etc.).  You will find out if you like working in this area or if a REIT would make more sense for you.

ShawnRulesAll

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #5 on: October 09, 2012, 12:50:53 PM »
great advice Karl, i will check the local ads for any property management jobs!

jpo

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #6 on: October 09, 2012, 01:03:40 PM »
I am looking for a position in IT most likely. I can get my associates possibly this spring or def by next fall.
Right, IT is a fairly diverse field. Are you trying to become a software engineer, network admin, unix admin, project manager, QA, business analyst, etc etc?

Jamesqf

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #7 on: October 09, 2012, 01:04:23 PM »
It would take me about 45 minutes-ish to bike to school so i don't think it would be very practical until I can move in town.

That depends.  Look at total time of driving vs biking: how much time does it take to drive to campus, park in student parking (which IMHO is usually a looong way from classrooms), and get to class.  Compare that to the time it takes to bike to the bike rack right in front of the classroom building.  Then subtract time you'd otherwise spend on an exercise program.

I was biking about 1 hour (16 miles) to campus, but it still worked out as an overall timesaver because driving took 30 minutes, parking 20 or more, and I got my hour's worth of daily aerobic exercise in 10 extra minutes.

pineapple

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #8 on: October 09, 2012, 01:47:54 PM »
I'm a senior in college myself, so while a little younger than you, just a little further than you are in terms of education.  I would recommend you continue to pursue a bachelors degree in IT/ MIS at a 4-year university, and make sure you get some internship experience before you graduate.  Internships in IT should pay much more than minimum wage, and where I live in Ohio, you could expect an hourly wage of around $14-$22.  A lot of companies do their recruiting for summer internships in the fall, so make sure you are ready by then.  Most universities will host job fairs to help connect students with employers, and you should make sure you have a polished resume and practiced interviewing skills before you even walk into the job fair. 

Having work experience in your field gives you better career options, and allows you to see what working for a particular company is like.  Many companies also hire for full-time out of their pool of summer interns, so you could potentially intern the summer before your senior year, and have a job offer from that company for after you graduate.  My degree will be in business admin with a specialization in finance, but I accepted an internship in IT last summer, and then accepted the same company's job offer for after I graduate, also in IT (management, specifically).  I'll be making a great starting salary (60k+), and I don't have the stress of having to do a lot of interviewing my senior year. 

mustachecat

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #9 on: October 09, 2012, 01:57:24 PM »
What I find really helpful is to start with where I want to end up, then work backwards. In your case, you have a number of goals: getting your degree; getting a full-time job; living independently; and retiring early.

Let's start with the first goal: getting your degree. How many years have you been working towards your BA? If you live at home, are charged for zero rent and groceries, and only have a part-time, possibly seasonal job, you have a huge amount of time to take more classes and concentrate on your studies. What's stopping you?

Next, getting a full-time job. Is the IT job full-time? If you got it, would you still have time/energy to go to school? What's the difference in earning potential with or without a degree?

Living independently: You have a pretty cushy living situation now, since you're basically only spending money on gas and one weekly pizza. What are your expenses going to look like when you move out? Take a look at a budget worksheet and ask your parents or your girlfriend (if she lives on her own) what their real expenses are like for housing, utilities, groceries, entertainment, etc. What salary do you need to cover all those expenses, plus a big chunk towards savings for early retirement?

Retiring early: How early do you want to retire? You can use the calculator here to estimate how long it will take you to retire at various savings rates: http://networthify.com/earlyretirement

ShawnRulesAll

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #10 on: October 09, 2012, 04:56:02 PM »
I am looking for a position in IT most likely. I can get my associates possibly this spring or def by next fall.
Right, IT is a fairly diverse field. Are you trying to become a software engineer, network admin, unix admin, project manager, QA, business analyst, etc etc?
I am looking at network admin. Currently am studying for my Cisco certifications.

It would take me about 45 minutes-ish to bike to school so i don't think it would be very practical until I can move in town.

That depends.  Look at total time of driving vs biking: how much time does it take to drive to campus, park in student parking (which IMHO is usually a looong way from classrooms), and get to class.  Compare that to the time it takes to bike to the bike rack right in front of the classroom building.  Then subtract time you'd otherwise spend on an exercise program.

I was biking about 1 hour (16 miles) to campus, but it still worked out as an overall timesaver because driving took 30 minutes, parking 20 or more, and I got my hour's worth of daily aerobic exercise in 10 extra minutes.
I timed myself to class just earlier. It took about 11 minutes to get to class. The drive is mostly 50mph and 55mph the whole way and google maps says it will take 47 minutes if i were to bike. We do not have a parking issue here because the college is located outside of town, thats why it is such a pain driving there. but its sure nice parking and being in class in 1 minute.

« Last Edit: October 09, 2012, 04:58:37 PM by ShawnRulesAll »

ShawnRulesAll

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #11 on: October 09, 2012, 05:04:53 PM »
Let's start with the first goal: getting your degree. How many years have you been working towards your BA? If you live at home, are charged for zero rent and groceries, and only have a part-time, possibly seasonal job, you have a huge amount of time to take more classes and concentrate on your studies. What's stopping you?
That is what I needed to hear, this semester I should've taken more than only 4 classes given my situation. I am the only one that has been stopping myself. I just started going back to school last fall so this is semester 3 for me, 4 if you count the 2 classes i took in summer. I am considering taking 6 classes in the spring now, if I am still part-time.

Next, getting a full-time job. Is the IT job full-time? If you got it, would you still have time/energy to go to school? What's the difference in earning potential with or without a degree?
The IT job is an intern job that is part-time probably around 30 hours. I will still be able to go to school in my opinion, and most my classes can be online in the spring. The pay for it is around 10-13/hr, if I were to get associates or hired FT somehow, I would ideally make in the 17/hr+ range if I got my Cisco certification.

Living independently: You have a pretty cushy living situation now, since you're basically only spending money on gas and one weekly pizza. What are your expenses going to look like when you move out? Take a look at a budget worksheet and ask your parents or your girlfriend (if she lives on her own) what their real expenses are like for housing, utilities, groceries, entertainment, etc. What salary do you need to cover all those expenses, plus a big chunk towards savings for early retirement?
If i were to move out, my expenses would be about (using GF figures) 700/rent, 300 food, 50 utilities. around 12k a year. I would prefer to stay at home or move in with gf to lower those costs once I get job. and save up for duplex fha downpayment.

Retiring early: How early do you want to retire? You can use the calculator here to estimate how long it will take you to retire at various savings rates: http://networthify.com/earlyretirement
I want to be retired by 45. I have a strong interest in rental homes and using that to retire on. I feel cheyenne housing market is growing and I want to take advantage of that in the next few years.

ShawnRulesAll

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #12 on: October 10, 2012, 01:24:41 PM »
Had orientation for my new job last night. Gonna be hard to resist the temptation to not spend $$$ back at the store since I get a nice discount. I will be stronger for it though, and I dont really need more clothes anyways. but my family will sure enjoy xmas presents this year I hope : )

mustachecat

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Re: 26 years old, starting out...What would you do if you were me!?
« Reply #13 on: October 10, 2012, 02:37:22 PM »
Yes, I would definitely focus on finishing up school. How many more classes would you have to take to get your BA rather than your associate's?

Your budget is very sparse! What about the gas for your car? Unless you'll be selling it and biking to work?

Other costs I don't see in your budget:

- Cellphone
- Car maintenance/registration/insurance/etc. (if you're keeping it)
- Internet
- Entertainment
- Eating out (even if it's just your weekly pizza)
- Clothing
- Health & personal care
- Laundry

Some of them will be recurring monthly costs, and others will be more sporadic, so you should figure out what you want to spend annually and either divide it across the full year or increase your monthly budget by that amount when the expense hits.

 If you make $17/hour for a 40 hour week, your annual pay would be $35,360; after taxes and assuming two federal allowances, your monthly take-home would be $2,496. Think about the expenses above and any others you may have forgotten, add them to your housing expenses (if you move out or move in with your girlfriend) and think about how much you can save each month.

What you want to save for:

- Emergency fund
- Retirement
- Housing

Maybe not necessarily in that order. If you always have the option of moving back home, then maybe your emergency fund doesn't need to be super beefy. If you want to retire in 19 years, you would need to save 45% of your income. Will you be able to do that and save up for a down payment on a $35K+ salary in the next few years? I don't know. I don't know you will either until you have a better sense of your real costs.

People here generally have a dim view of FHA loans because they almost always mean that you have less than a 20% down payment saved... which means, really, you can't afford what you're buying. Maybe this changes if you're also using the house to generate income, but I know very little about real estate. There's a real estate board here, though, so you can ask around there.