First off, sorry if this is not the correct use of the label "case study," but it seemed appropriate.
So I've been diving into the world of MMM for about 2 weeks. I've read all of the "important" posts and have slowly been reading all of them from the beginning. I'm not quite done yet, but the more I read, the more confused I get about how and where to invest. My wife and I live pretty frugally, and now I need to know what the hell to do with this money!
Background and Goals: Our simple goal is to become 1/2-Mustachian (1/2-retired) as quickly as possible. My wife and I got married 5 months ago (Early twenties). I've been working at my job for three months, and she for seven. She loves her job and will absolutely want to work it until retirement age; it's her calling. I, however, tolerate my job and would jump ship if a better offer came around, but I fear I'm just not the 9-5 grind type of guy. I would love to "retire" as soon as I can.
The good news, of course, is that she will most likely retire at normal age. So we'll have that steady pay check/health and benefits to aid us when I do "retire."
Income: Me - Around 47,000. Her - 17,500. I have huge advancement opportunities if I stick around. My wife is currently a paid intern, and it will move to full time position (its absolute, no question about it) in 4 months. Her pay should double.
My passion/freelance, which I want to "retire" into, I think will bring in about 5,000 this year. (It would obviously bring in more if I wasn't working full time). I think I would also enjoy land lording but let's not get ahead of ourselves.
Liabilities: None. *Does a little dance*
Expenses/Saving We currently save 35%-40% of our income (depending on the month), but after reading the MMM blog I'm not happy with that amount. We can easily raise it to 50% by cutting out needless crap. Also, when wife moves to full time, our expenses will remain the same so savings will obviously go up.
Assets: Joint Checking Account- $4,308, Joint Savings - $4,100, Her savings - $2,000.
For Christmas, her father opened us each up a Roth IRA with fidelity and put in $500 each. Not sure if this was the best "move" but it was amazingly generous of him. We have not invested in anything yet.
My companies 401k plan is with pai. My company matches 20% of my first 5%, which is almost $500/year at my current salary. My account there is Roth 401k, as advised by the accountant there. This account opens tomorrow.
Questions:
1) So obviously I'm going to keep reading through the MMM website, but what are the best resources (books) to learn about economics and investing. I feel so very ignorant.
2) What the bloody hell do I do with my money? We have it just sitting around in the bank, scattered in different Roths with different companies. Which might be the right thing to do, but I have no idea.
3) Going further with 2, Should I contribute to my company for the match, and then invest elsewhere, or max out the 401k? Then what? Invest in the Fidelity Roth IRAs or do the Vanguard index funds MMM talks about (which would mean transferring the money from the Roth. Father in law might not like that but oh well). So, I guess the question is what are the different levels of investment and what are the best places to invest?
4) We're currently renting a house, but know buying is in our future. Should we keep some money in savings for a future down payment or can we pull that out of whatever account we've invested in in the future. What about emergency funds?
Thank you so much for the help. I know I asked a lot and in a confusing way. Let me know if I've been too vague or if my goals need to be more defined. I really know nothing about this stuff (who regrets taking an easy elective instead of economics now!) so feel free to talk to me like I'm a child.