Author Topic: Spent my first $ ever on ER  (Read 3062 times)

Gatzbie

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Spent my first $ ever on ER
« on: April 12, 2017, 03:05:56 PM »
Maxed out Roth for both 2016 and 2017, then put an additional 10k into VSTAX via brokerage account (so around 21k) total. Not bad for still being in college!

What's the next step? I plan on regularly contributing more, not taking it out...ever, living frugally, and focusing on obtaining a full-time job after my internship to be able to make more $ and take advantage of benefits (401k etc.) Anything in general I am missing here? Feeling like I'm doing everything correctly.
« Last Edit: April 12, 2017, 03:14:19 PM by Gatzbie »

TheAnonOne

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Re: Spent my first $ ever on ER
« Reply #1 on: April 12, 2017, 03:06:46 PM »
Wow! Starting off strong!

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mudstache

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Re: Spent my first $ ever on ER
« Reply #2 on: April 12, 2017, 03:14:06 PM »
Wow, I wish I had known to do this so early!!  Congratulations!  Yes, getting a job to be able to sock away $18k pre-tax is a great step, and other than that, add to your brokerage account regularly (every other week, or every month) as you have more extra money.  I'm rooting you on for a pre-30 FIRE! 

Exflyboy

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Re: Spent my first $ ever on ER
« Reply #3 on: April 13, 2017, 07:25:35 PM »
Nice,


Now if you are earning an income.. i.e getting a W2 then you CAN contribute up to $5500 in a Traditional IRA. That only makes sense if you are earning enough to be paying taxes. If not then your better off with a Roth like your doing.

As the poster above pointed out.. When you start paying taxes with a substantial income then it makes sense to max out the 401k and Traditional IRA to avoid paying taxes on (18,000 +5500) = $23.5k's worth of income.

For example, say you will be earning $50k- 23k = $27k.. You will then only pay taxes on that $27k.. That goes for both Federal and State income tax if you live in an income tax state.

You then get more money to grow and get you to FI faster.


stashgrower

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Re: Spent my first $ ever on ER
« Reply #4 on: April 16, 2017, 10:06:14 PM »
Congratulations!

StudentEngineer

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Re: Spent my first $ ever on ER
« Reply #5 on: April 16, 2017, 10:59:11 PM »
Good work! Nice to see a fellow college student here aiming for FI.  Are you in engineering as well?

Gatzbie

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Re: Spent my first $ ever on ER
« Reply #6 on: April 18, 2017, 09:07:39 AM »
Wow, I wish I had known to do this so early!!  Congratulations!  Yes, getting a job to be able to sock away $18k pre-tax is a great step, and other than that, add to your brokerage account regularly (every other week, or every month) as you have more extra money.  I'm rooting you on for a pre-30 FIRE!

That is the plan! One problem I will be facing is lower expected returns for the next decade though compared to what previous generations have experienced, and that I'm dying to get out of college and into the real world so I don't plan on staying longer than I need too. This means that I will need to make up for that extra income somehow if I am not becoming a CPA, this is what I will be focusing on now.

Also, your post reminded me that I need to go set up automatic deposits from my bank to Vanguard from my paychecks!

Nice,


Now if you are earning an income.. i.e getting a W2 then you CAN contribute up to $5500 in a Traditional IRA. That only makes sense if you are earning enough to be paying taxes. If not then your better off with a Roth like your doing.

As the poster above pointed out.. When you start paying taxes with a substantial income then it makes sense to max out the 401k and Traditional IRA to avoid paying taxes on (18,000 +5500) = $23.5k's worth of income.

For example, say you will be earning $50k- 23k = $27k.. You will then only pay taxes on that $27k.. That goes for both Federal and State income tax if you live in an income tax state.

You then get more money to grow and get you to FI faster.

Yea, I chose the Roth because I don't think I will make enough to pay taxes. If I do, it most likely won't be much so not a huge deal.


Good work! Nice to see a fellow college student here aiming for FI.  Are you in engineering as well?

Accounting! Will graduate in December.
« Last Edit: April 18, 2017, 09:30:40 AM by Gatzbie »

Heroes821

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Re: Spent my first $ ever on ER
« Reply #7 on: April 20, 2017, 09:58:57 AM »
I would look at growth over the last century and perhaps re-evaluate the thought that returns will be lower in the next decade.  I think the key is to remember to continue to save 50%+ of your income and enjoy your 20s at the same time. FIRE by 30 is great, but if going on that 90 day trip around the world means you FIRE at 32, probably worth it for the life experience and memories.