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Learning, Sharing, and Teaching => Investor Alley => Topic started by: JBronnier on June 14, 2016, 09:10:50 AM

Title: Where to Start?
Post by: JBronnier on June 14, 2016, 09:10:50 AM
As a newly financially independent individual (This year I put money into a savings account for the first time since I was 11, I am 23 now). I am looking to invest the 5k I now have saved A.S.A.P. I was looking into possibly Betterment, or Wealthfront to begin with and was wondering what would be a better step. I know Wealthfront will handle my small amount of money for me for free potentially up to $20k (I've already got a few people lined up interested in it). But Betterment seems to be a more effective option. Like I said, the idea of even having money in a savings account is a new one to me. However as of yesterday, both the credits cards I foolishly got at 18 are paid off, and my student loans are down to $1,500 and consolidated into one loan at 4.2% (I am still in school so am not accruing interest at this time, but have been paying tuition in cash). I guess I am really just looking for a push in the right direction to get started; be it an IRA, Betterment/Wealthfront account, or even straight to Vanguard.

After stumbling upon this blog a few weeks ago this 5k has been burning a hole in my pocket and I am ready to put it to work!

Any help, advice, or forceful push in the right direction is greatly appreciated.

Josh

P.S. I am still not entirely sure everything you can do with an IRA. If I started an IRA through Wealthfront for example, it would essentially be a regular investing account, except I would not get taxed and I would not be able to take money out?
Title: Re: Where to Start?
Post by: rockstache on June 14, 2016, 09:15:11 AM
You might be confused about the definition of Financial Independence. Either way, I would start here and read through this before you make a decision: http://jlcollinsnh.com/stock-series/
Title: Re: Where to Start?
Post by: Zacharias on June 14, 2016, 09:50:38 AM
Congratulations on getting started. Such a young age with almost no debt is a great place to be.

I'd suggest taking another look at paying off the student loan you have now. Generally interest while in school is capitalized and added to the principal you pay off later, even though you're not required to make payments now.
Title: Re: Where to Start?
Post by: JBronnier on June 14, 2016, 09:58:14 AM
You might be confused about the definition of Financial Independence. Either way, I would start here and read through this before you make a decision: http://jlcollinsnh.com/stock-series/

Thank you for this, I just got through the IRA portion of the series and it has already answered a lot of questions I had. Will continue to read.

Congratulations on getting started. Such a young age with almost no debt is a great place to be.

I'd suggest taking another look at paying off the student loan you have now. Generally interest while in school is capitalized and added to the principal you pay off later, even though you're not required to make payments now.

Yes my current goal is to have this paid off in 3 months, I've steadily been able to put $500 towards it a month. Figured it would be a good time to begin looking at investment options once I've accomplished that.
Title: Re: Where to Start?
Post by: Heckler on June 14, 2016, 10:31:45 AM
Great work!  You have a lifetime of investing ahead of you.  At your age, I would consider keeping your $5k as cash so you never need to go into credit debt.   Its called an emergency fund.  Decide what your cash EF should be, tgen start investing your future savings above that.

Title: Re: Where to Start?
Post by: Heckler on June 14, 2016, 10:35:54 AM
https://www.bogleheads.org/wiki/Getting_started

Start here

Title: Re: Where to Start?
Post by: JBronnier on June 14, 2016, 11:04:21 AM
Great work!  You have a lifetime of investing ahead of you.  At your age, I would consider keeping your $5k as cash so you never need to go into credit debt.   Its called an emergency fund.  Decide what your cash EF should be, tgen start investing your future savings above that.

My dad said the same thing, I guess I'm just getting antsy after all the reading I've been doing recently lol
Title: Re: Where to Start?
Post by: MDM on June 14, 2016, 01:27:56 PM
See also the 'Basic Terms' and 'Investment Order' tabs in the case study spreadsheet (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/msg274228/#msg274228).

Good luck!
Title: Re: Where to Start?
Post by: JBronnier on June 14, 2016, 01:59:48 PM
See also the 'Basic Terms' and 'Investment Order' tabs in the case study spreadsheet (http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-%27case-study%27-topic/msg274228/#msg274228).

Good luck!

Wow thank you the Investment Order tab was exactly what I was looking for. Thank you!