Author Topic: Beginner here  (Read 3242 times)

JD_79

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Beginner here
« on: March 28, 2013, 09:52:56 AM »
Hey everyone,

Just found this website about a week ago, what a revelation!

Some background on me:

33years old
$57000 a year salary
$19K in student debt (8k at 8.75% and 11k at 2%)
$5 debt in the form of a loan from my folks (0 interest)
$58,000 in an IRA that I rolled over from previous job
$1000 in savings

I have a pretty nice living situation as I live at work.  So no commute, no rent.
I have a 3% Simple IRA with the company matching it and I fully fund a Roth IRA at the moment.
I pay 725 a month for car insurance and utilities, student loan and loan from parents.
My take home pay is $3,000 a month.

I'm asking, where do I go from here? 
1. Pay off debt?
2. Stockpile a rainy day fund?
3. Start investing? 

I'm working on cutting back on food and personal expenses as I realize I have a unique opportunity here to really build up the 'Stache.

However, how do I figure what I really need to retire as I cant live here after that and would have to pay health insurance.

I'm not a real money man so simple advice only please, haha.

Thanks for any help, this place is great:)

JD

matchewed

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Re: Beginner here
« Reply #1 on: March 28, 2013, 09:55:12 AM »
What a coincidence. ;)

http://www.mrmoneymustache.com/forum/welcome-to-the-forum/top-ten-mmm-posts-for-new-readers/

*edit*

And yes to all three, in that order isn't too bad either. Although a rainy day fund is not really the same as an emergency fund and has connotations of spending money based on a sudden want rather than a conscious decision to spend. :D
« Last Edit: March 28, 2013, 10:05:45 AM by matchewed »

A440

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Re: Beginner here
« Reply #2 on: March 28, 2013, 10:08:31 AM »
Hi,

Congratulations on starting on a new path!  Definitely the link from matchewed is a good place to start. 

If you are interested in advice, you may want to include a little more information about where your money is going each month.  How is the $725/month divided up?  Also, how stable is your job? 

I would start working on that loan at 8.75%.  If you are vigilant about keeping track of your finances, you could consider a balance transfer offer, where usually there is a 3% fee and 0% interest for 12-18 months.  If you are not so vigilant and miss paying it off at the end, you will be stuck with a much higher interest rate. 

If your job is stable or you could move in with friends/family if you lost your job (would you lose housing as well?) you may not need much of a rainy-day fund.  It depends on your situation


JD_79

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Re: Beginner here
« Reply #3 on: March 28, 2013, 10:16:00 AM »
Thanks guys,

To answer your questions:

$725 is:
$45 for internet (bundled with cable)
$80 for cable (two year contract)
$120 for 8% student loans
$103 for 2% student loans
$250 for parents loan
$55 for car insurance
$72 for cleaning service (part of agreement for apartment)

I have a very stable job and if I had to, could move in with my parents, if for some reason I lost the job.

I appreciate all the help, I'll  have to read those articles tonight.

If there is anything else I can do to clarify things, just let me know. 

Thanks again:)

JohnGalt

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Re: Beginner here
« Reply #4 on: March 28, 2013, 11:06:25 AM »
Thanks guys,

To answer your questions:

$725 is:
$45 for internet (bundled with cable)
$80 for cable (two year contract)
$120 for 8% student loans
$103 for 2% student loans
$250 for parents loan
$55 for car insurance
$72 for cleaning service (part of agreement for apartment)

I have a very stable job and if I had to, could move in with my parents, if for some reason I lost the job.

I appreciate all the help, I'll  have to read those articles tonight.

If there is anything else I can do to clarify things, just let me know. 

Thanks again:)

I'd pay off the 8%  loan ASAP.
Wouldn't pay any extra towards the 2% loan.  Though this is more of a personal choice - if you don't like being in debt at all and will feel more comfortable with it paid off - go ahead and knock it out.
Personally, I'd pay off the parent loan right after the 8%, but that's because I'd hate owing money to family/friends - if the interest rate is low or non-existent and both sides are fine with it, you'd be fine just paying the minimum there too.

If your job is stable and you have an easy/cheap plan for if you did lose it - you're probably fine with a minimal (2-3 months maybe?) emergency fund.

After that - save and invest.  If you don't know anything about investing, save and read about investing until you're comfortable.  For now, the important part is the saving.  Investment returns won't matter a whole lot until you have a large 'stache.

JD_79

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Re: Beginner here
« Reply #5 on: March 28, 2013, 11:25:49 AM »
Thanks for the advice guys.

I'll have to read up on investing, so far all I have read is what is on MMM and some from John Collins (I think).

Investing is definately not my strong suit but after reading these few articles, they actually make it sound pretty simple.

JD

capital

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Re: Beginner here
« Reply #6 on: March 28, 2013, 11:31:41 AM »
Thanks for the advice guys.

I'll have to read up on investing, so far all I have read is what is on MMM and some from John Collins (I think).

Investing is definately not my strong suit but after reading these few articles, they actually make it sound pretty simple.
Read A Random Walk Down Wall Street, written by a Princeton economics professor. It gives you pragmatic investing advice along with its intellectual justification, and is a pretty easy read.