"SHOW ME THE MONEY" VIEWS on HOW to make MONEY GR

[the_idle_threat]

This thread was directed at Partial's original question, and I find it interesting that nobody has yet brought up the most critical financial success factor (IMO) for someone his age.

Any guesses?

Not buying a car (especially a new one) if at all possible. Common thing for new grads but very $$$. I went w/o one for almost 2 years and then had to bite the bullet.

The most critical? Avoid the credit card trap. But holding off on the new car is a great suggestion as well.

[Fosco33]

This thread was directed at Partial's original question, and I find it interesting that nobody has yet brought up the most critical financial success factor (IMO) for someone his age.

Any guesses?

Not buying a car (especially a new one) if at all possible. Common thing for new grads but very $$$. I went w/o one for almost 2 years and then had to bite the bullet.

The most critical? Avoid the credit card trap. But holding off on the new car is a great suggestion as well.

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).

Well, Scott???

[the_idle_threat]

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.

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.

[Scott Campbell]

This thread was directed at Partial's original question, and I find it interesting that nobody has yet brought up the most critical financial success factor (IMO) for someone his age.

Any guesses?

Not buying a car (especially a new one) if at all possible. Common thing for new grads but very $$$. I went w/o one for almost 2 years and then had to bite the bullet.

The most critical? Avoid the credit card trap. But holding off on the new car is a great suggestion as well.

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).

Well, Scott???

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.

It's been a 5 or 6 years since I read the book, but this concept is detailed in The Millionaire Next Door.

[Partial]

My uncle recommends I read that book. I should take his advice.

[Scott Campbell]

BE SURE that IRA you start up is a "Roth" IRA. And many employers require you to work a full year before being able to get into the 401K. You can get the Roth IRA started either way.

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.

[Scott Campbell]

My uncle recommends I read that book. I should take his advice.

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.

[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

[Scott Campbell]

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.

[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.

[Fosco33]

My uncle recommends I read that book. I should take his advice.

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.

I've read Millionaire Next Door and would also suggest "Rich Dad Poor Dad" by Robert T. Kiyosaki.

[Scott Campbell]

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.

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.

If you are paying your balance in full each month, you do not have a problem, and are probably helping your credit score.

[Partial]

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

[Fosco33]

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

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.

[Fosco33]

About every month, my credit card company automatically raises my limit although I'd never use it. Previously, I asked them to lower the max b/c I read that before a loan it looks better to use more credit. What is the appropriate response? Should I continue letting the company float me a higher credit limit or not?

Bumpy Bump