The most critical? Avoid the credit card trap. But holding off on the new car is a great suggestion as well.Quote:
Originally Posted by Fosco33
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The most critical? Avoid the credit card trap. But holding off on the new car is a great suggestion as well.Quote:
Originally Posted by Fosco33
Totally agree on the CC issues. I'm wondering what Scott's question was referring to b/c we discussed paying off credit cards a few times on the first page (myself, B, MJ - I think).Quote:
Originally Posted by the_idle_threat
Well, Scott???
I'm really getting at avoiding the big balances in the first place. It's all too common nowadays for a twentysomething to ring up big balances on credit with the expectation that current and future wages will pay them off quickly. Then, instead of putting money away in a 401(k) or a Roth IRA (two excellent suggestions that have been mentioned early and often), the person is paying that money to creditors each month trying to get back to even. I wish I could say this without doing so from experience. :oops:
The big takeaway is really living within current means---not future expected means. By staying mostly out of debt (low-interest student loans and mortgage excluded) and saving each month, a person retains the most financial flexibility.
This is the most important thing that I can think of, aside from the painfully obvious, like holding down a job in the first place, and not getting fired, etc.
For someone Partials age, I believe it's choosing the right spouse. It's extremely difficult to be putting money away if your wife (or husband) is sabatoging your cash flow. If you marry a spender, you are far more likely to live beyond your means.Quote:
Originally Posted by Fosco33
It's been a 5 or 6 years since I read the book, but this concept is detailed in The Millionaire Next Door.
My uncle recommends I read that book. I should take his advice.
While this is solid advice for anyone in their 20's and 30's, the Roth is not quite the slam dunk no brainer for older workers. Because the money put into the account is "after taxes", it takes time to out pace the return on a traditional pretax IRA. Older workers may not have enough time for that to occur. You also have to factor how much taxable income you will have in retirement.Quote:
Originally Posted by Bretsky
It's an entertaining read - I think I finished it in a couple of nights. But there are other books that will help you lay the foundation for your "Master Plan". The book that crystalized for me what I had to do was "Wealth Without Risk" by Charles Givens. I read it in the late 80's shortly after college, so much of the specific investment and tax advice is dated. The insurance info is timeless. I would credit that book for much of my own success.Quote:
Originally Posted by Partial
so, what does one do if they have student loans? Things appear to have taken a turn for the worst and it looks like I may leave school 20,000 in debt. What is an action plan on those when trying to invest your salary into IRA/401k etc.
I'm a good student so I think i'll be alright when the time comes to get a job, and my field from my school averages around 50k after graduation
The conventional wisdom is to pay yourself first. In other words, don't put off starting your Roth or 401K contributions in order to pay down your student loan debt faster. This is especially true because your student loan interest rate is typically subsidized (low). It might be different if you had $20K in credit card debt at 18% interest.Quote:
Originally Posted by Partial
Do a lot of people my age get into a lot of CC debt? That has never really been an issue for me. I have two credit cards, one from my bank and another for emergencies with a higher limit that I have never used. Is this damaging my credit rating having two? I have always paid the one on time, and the other I have never used.
I've read Millionaire Next Door and would also suggest "Rich Dad Poor Dad" by Robert T. Kiyosaki.Quote:
Originally Posted by Scott Campbell
There are people of all ages that have problems with credit card debt. College students with credit card problems are a relatively new phenomenon primarily because the credit card companies began targeting that market in the last 10 years.Quote:
Originally Posted by Partial
If you are paying your balance in full each month, you do not have a problem, and are probably helping your credit score.
whats a good field to go into in terms of money for a long period of time? My understand is that engineers get laid off around 50 due to A. overqualifying themselves, B. younger, smarter prospects for significantly cheaper available
I'd highly suggest finding something that interests you first and let the money follow suit. There's nothing to gain in making tons of cash if you hate your life (consider that you'll spend probably 50-60 hrs/wk). Also remember that you'll probably change jobs/careers 4-6 X's in your life - so you probably don't know what you'll be yet :wink:Quote:
Originally Posted by Partial
As far as good long-term industries, engineers do pretty well (most of my college roomies were EE, CE or ME) but you need to have that specific degree. Looks like the US is quickly moving towards a more service based economy so I'd say look for something in healthcare or technology - IMO.
Bumpy BumpQuote:
Originally Posted by Fosco33
Sales. Good sales people are grossly overpaid. The problem with sales is that 95% of the sales jobs out there are truly awful, so you have to target the 5% that are decent. Technical sales people (engineers) can do extremely well.Quote:
Originally Posted by Partial
I wouldn't get too hung up on the long term. Business models evolve, so you'll have to also. And it's somewhat futile to try and predict now what the hot market segment will be in 20 or 30 years. Darwin is your friend. Adapt, or you'll become stale and underemployed. That diploma should not mark the end of you investing in your skill set. Ideally you'll find work that continuously enhances your skill set. It's your skill set that will determine your value in the employment marketplace, not your job. Jobs come and go.
Make the effort to become a great communicator, as that skill translates across all jobs and all industries. It is of little value to be brilliant if you can't communicate it to anyone else. I'm amazed at the lack of business writing skills in today’s workplace. It's absolutely horrific. Though you rarely see that poor writing coming out of the executive suite, and that is no coincidence. Speaking skills are equally important, and if you are an engineer that cleans up well and can be trotted out in front of customers, you'll be even more valuable.
IMO
B is probably way better equipped to handle this one, but I'll take a stab at it.Quote:
Originally Posted by Fosco33
If it's not so high as to screw up your ratios, you should be fine. I take it your concern is about your credit rating as it relates to getting a home loan. In that case the best thing you could do would be to pull your own credit report and review it for errors. Make sure any errors are corrected. At that point you could take it to a loan officer and have him look for any ratios that are out of whack. You could probably get pre-approved for a loan, and the loan officer could probably let you know if any of your credit lines were hurting your ability to secure a larger mortgage.
Nice advice. I'd like to add to it that you should also be concerned with doing something you love to do every day because whatever career path you choose you'll be doing it every day. You may think to yourself that career changes are possible and they are, but too many people get worn down doing a job they hate and it's decades before they ever get ithe guts to step off that ledge of security and quit to do something they like better. I've known people who were miserable, grumpy people for a long time and then one day quit their jobs and got into something new and were different people after that. There's an old bit of advice (true or not, I don't know) that says, "do what you love and the money will come."Quote:
Originally Posted by Scott Campbell
Quote:
Originally Posted by Scott Campbell
Fosco,
A good question and one that there is no exact yes or no answer for. Your credit score is evaluated by a number of factors.
When one reads credit reports no matter how good the credit scores are, the report lists four reasons why each person doesn't have "better" credit. I've seen the adverse message of "too much revolving credit". That being said, when I see that message it's normally on a person with very good credit.....which is why the CC's keep floating him more money to use.
My view is as long as the credit isn't extremely excessive it won't hurt you much. My credit is in the high 700's and I have around 30G avaliable to me via credit cards (which I pay off monthly so I don't use that) and about 30G of unused credit via a Home Equity Loan.
Much more important, and the factor that significantly hurts individuals credit in relation to credit limits, is too many revolving accounts with balances. Those guys that have two big payment car loans, a boat loan, a Trailer Loan, and an extra 5 Credit Cards with high balances...........etc. Also, if you have recently run up balances as of late on the above, that hurts scores even more and it's easy to see when a person is going underwater far before it happens.
So regarding the offers, use common sense. I wouldn't let the revolving balance limits get excessive if you will never use them, but excessive may be different from me versus the guys in here making the big buckswanas.
In all probability, you are receiving these offers because you already have a good credit standing. That being said, as you approach the area when you are considering a home loan, contact an expert and have him pull and review your credit report for you. A quality bank/loan officer should be able to help you with that....and of course if you reside in the midwest I'm always happy to help out as well. Any pre-approval I do for clients is free, and even if I don't do a formal pre-approval I'm able to pull credit and review it with clients with a signed authorization form and a few bits of information I gather.
I'd love to do some home loans for people in here; maybe sometime down the road as my idea has been shot down a few times.
Cheers,
B
I have nothing to add, but admiration.
amazing posts, guys