Dear Mustachians,
Being a new but enthusiastic reader, I would really appreciate the type of advice only a more experienced mustachian can offer. I’m 25 years old, live in New Orleans, and I’m about to start my first “high paying” job (and begin growing my ‘stache). I’m not hell-bent on retiring in 10 years by any means, but I’m very interested in being FI by age 45-50 (20-25 years). Face punches expected and welcomed.
My top priorities, and please feel free to challenge these, are 1. Getting out of student loan debt (should only take around 3 months), 2. Saving for an eventual mortgage down payment, and 3. Otherwise growing my ‘stache.
Financial situation:
In early January 2014 I will start my new job as General Manager of a restaurant
Salary $35,000/year, tips approx. $14/day (untaxed), yearly bonus $6,000 to $15,000 (depending how well I do my job)
Approximate annual income (assuming $8,000 bonus): around $43,000 (pre tax) & $3,500 untaxed tips
Current monthly expenses:
Rent + Utilities: $440
Groceries: $180
Entertainment/Restaurant/Bar: $120
Gas/Bus: $75
Cigarettes/alcohol: $200 (!)
Car insurance: $64.50
Cell: $30
Etc.: $75
Cat: $20 (share costs with my SO)
Student Loans: $360 (I’ve been paying $500-$1,000 a month depending how my bank account looks)
Total: $1,205 x 12 = $14,460/year
Additional considerations: My dear mother is retiring Jan. 2014 so I will need to provide my own healthcare starting then (none offered through my employer). Cheapest option on healthcare.gov is just shy of $200 a month, and it’s terrible. I won’t qualify for any subsidies. Any advice?
Assests: $4,000 ‘stached in a bank account (negligible interest rate)
Liabilities: $4,500 student loan debt at 6.8% interest (no cc or other debt)
Specific questions:
Being a thoroughly un-savvy investor, I need advice on how to ‘stache all my impending cash. I should be able to save 50% of my take home pay, but where to invest it? I’ll have a 401k option through my employer but no details as of yet other than a ‘not more than 10% match’.
Any advice on health insurance for a relatively healthy young man? (no expenses in recent years except yearly checkups and an injury from a bike accident)
Where should I invest so I can access the $ for a mortgage down payment in 3-5 years?