Hi everyone,
I've been reading MMM for about 4 months now and it has been a revelation.
I just graduated a few months ago and moved to the US a month ago to start work as a software engineer. Single and no kids. I am fortunate to be MMM-aware as I'm starting out, but I'm still not aware of the more complex financial instruments, so I'm particularly weak in the investments section. I'll just lay out my expenses, and I'd really appreciate it if fellow Mustachians could give me advice (books to read is especially good advice) on how I should start investing.
Apart from the expenses below, I spent about $2500 right now because of furnishing the apartment, buying basic things (a bike), but these were one time payments.
Income: 90k/year, after taxes that comes to about $5240/month in hand
Expenses:
Rent $1275/month
(This is the South Bay Area, I share a 2bd/2ba, and the complex is very nice, and right next to public transport and shopping and only 10mins away from work by train+bike, so worth the expense)
Food & home supplies $300/month
(I eat lunch out with co-workers approx 3 times a week. At least for a few months I'll continue this since I'm at a new job and if this is useful in mixing in, then I don't mind spending a bit. Plus on a weekend I usually splurge a little since I love different cuisines and there is so much to try here. One important point here: buying from Costco or at wholesale quantities is a no-go for me, one person can only eat so much :))
Utilities ~$70/month
(incl water, garbage, power and internet. No TV at home)
Cell phone ~$35/month
(T-mobile monthly 4g $30 100min, 5gb data, unlimited text. Sometimes I go over the minutes so end up spending ~$5 more)
Linode VPS $20/month
I don't have a car, and don't intend to get one until I really need it. I bike around everywhere and take public transport, a part of which is paid by the employer.
Indoor rock-climbing gym $73/month *BUT* this is reimbursed by employer
Misc. expenses $50/month
(netflix, movies, cabs, public transport)
Apart from this, I'll use ~$2500/year to fly home (India) once or twice a year. And I've set another $4000 as a budget I can use for trips because I love travelling and adventure sports.
That is my situation. As you can see, I have zero investments right now which is the problem spot. I'm really hoping to change this so that I can achieve FI by 30-35. From reading MMM, it seems a 401k is something I enroll in immediately and then max it out (Employer puts in 3-7% of base salary every year). As for Vanguard, although I understand it a bit, some books or websites which explain how index funds work and some of the underlying economics would be useful so I can make good choices. Also how much of my savings should I be investing in index funds? As a non-US citizen and non-existent credit history what are some other options I have to make sure my employees are working there hardest?
Also any suggestions to cut down on monthly expenses?
Thanks in advance!