A counterpoint for the OP to consider…buying new cars is not the end of the world. Especially with the current values for used. If someone wants to buy a new car and sleep easier at night with no concerns about past maintenance history or concern about problems that come up as cars age…buying new is not going to sink an otherwise tight ship. Just don't be buying new every year or two!

Done7 said:

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Yea.. some of us are trying to retire(not work for the man) around 35-40 years old. Everyone's goal is different.

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My point stands. If you get to 35 years old and think you're financially ready to coast to the finish (retire, semi-retire, or whatever you have in mind) , you just factor that 800k (or whatever your 401k is at that point) into the equation. If you think 20k a year in something other than your 401k is going get you there faster you might want to do some risk assessment

NRD09 said:

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Done7 said:

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Yea.. some of us are trying to retire(not work for the man) around 35-40 years old. Everyone's goal is different.

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My point stands. If you get to 35 years old and think you're financially ready to coast to the finish (retire, semi-retire, or whatever you have in mind) , you just factor that 800k (or whatever your 401k is at that point) into the equation. If you think 20k a year in something other than your 401k is going get you there faster you might want to do some risk assessment

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I think 35 is too early unless one is super successful or is rich from legacy. I didn't even have 350k net. I think one needs to figure out what one's retirement number is. $1M is too less.

Something I've been doing for a few years now is every month recording all of my account balances and debts. I include everything except my mortgage.

I plot debt, savings, and liquid networth on the plot. For liquid networth I only look at savings - debts, excluding mortgage debt. It's been really cool to see the shift and growth in networth and savings and drop in debts. It was really great when the net worth crossed 0, and then crossed 100k a few years later. I'll share the data on some financial message boards one day, maybe when I reach $1,000,000 in total savings.

I keep notes to the right that includes taking out money for a condo purchase where there is a big dip, and also the dip from a big market correction.

Secure your finances first, then you can get to a point where you can 1). not burden anyone else and then 2). help friends or family in their need and not feel stressed or a need to be repaid. That's been the most rewarding benefit to me of building up a savings.

Don't try to keep up with the Jones'. Honestly don't even worry about them. Odds are, they're in debt up to their eyebrows.

Anecdote... my first job out of school was with a smallish family owned oil company in a small town. It provided a very unique insight to the world of very high net worth individuals. 8-10 figure net worth...

Many of the things a lot of us think of as a sign of "made it" or "making it"? They didn't have them...

Drive a piece of crap. When it completely dies, buy a 3 year old car.

Might have been mentioned, but I missed it . Roth 401k. They've been around for a while. At the moment, taxes are historically low.
Glad we opened Roths a long time ago, that eliminated all the time limitations.

This advice may not hold for the current market, but I bought a house a year after graduation, lived in it for 4 years and sold it for $30K more. Also had it on a 15 year note so built up some good equity. Used those proceeds to buy the house we're in now and after being here for 4 years we could sell it for $200K more than we paid for it. Obviously a big part of that chunk is the craziness in the market, but we did buy it for about $40K under the apprised value and have done a ton of upgrades to increase its value. A lot DIY to save money.

My goal is to either stay here long term, or if we move to get a note that is the same duration as what we have left on this one. That would have my house paid off by the time I'm 45 and my fist kid is getting into college.

Lots of people like renting but I couldn't do it. I tried it a year and was miserable.

Also don't be afraid to change jobs. The only meaningful raises I have ever gotten (20-30%) were by switching jobs. I'm now well ahead of peers that have stayed in the same role for 8-10 years. Don't be the guy that switches every two years, but know your value and find someone that will pay you for it.

Get you credit score up as high as you can.

I'd also recommend the power of why course by Simon Sinek, it's not financial but will help you get your arms around the career ahead of you. Then check out the 100 year life

KillerAg21 said:

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Howdy, I am Class of 21 and I graduate in December. I have a good job lined up after graduation, and I am looking at the future as reality is setting in. If anyone wouldn't mind giving some advice or help based on experience or expertise it would be very appreciated! BTHO Arkansas

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Smart. Good luck to you!

NRD09 said:

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CaptnCarl said:

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There's some odd advice on here that doesn't apply to everyone, but this caught me.

Plenty of people have been financially successful without making a dining table and renting a room month to month.

Don't lease the swankiest apartment in uptown Dallas., obviously. Don't go buy $2k worth of carpentry tools to build one table just to realize carpentry isn't your thing.

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I took this more to suggest getting yourself some life skills and a basic set of tools so you don't get sold a full a/c system for $8k when you just needed a $60 compressor capacitor, or a couple grand in plumbing repairs when an hour of your time and a fernco would be an acceptable fix, or the myriad of ways to get scrood by a mechanic...

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Lol yeah. Everyone else is just serving up some basic ass dave ramsey advise, which is fine but I figured I'd mix it up.

You don't even need your own tools to build stuff. All my friends share all our tools - its a great way to further build community and friendship. And when one of us needs help on a big project, at least a few will show up to pitch in.

We have a ski wax party coming up among my friends. Everyone brings their skis/boards over, do a soup potluck, and we get our gear ready for the ski season ( we do a lot of backcountry skiing together). Sure I could take them to the shop, but what fun would that be?

ATM9000 said:

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5. When you do spend on material stuff (going back to point 1), do it in a meaningful way. I have a career mentor who is 7-8 years older than me. He has what he calls his 10% rule. Every year since he got out of school, he's taken 10% of his bonus and buys a single item that's really really nice, be it a piece of furniture, timeless piece of clothing, shoes, etc. something that he can look at or wear and be proud of or happy with forever so never a car or new technology. These days he applies this rule to big home projects and the like. I wish I had done something like that. Now, he's got like 25 items that he deeply appreciates having (how many people can honestly claim that?) and he says it goes a long way in controlling frivolous spending habits. Also have to say, probably the best dressed person I've known and it's broadly due to this habit.

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I just wanted to echo this. We just started appreciating this concept later in life and that was primarily because of Covid. And it was primarily a realization looking at your closet and seeing all of the clothes that became useless overnight when we all went to WFH. Outside of workout and lounge clothing, I've literally worn the same 2-3 polo shirts for 18 months and maybe worn pants 4-5 times.

Together we have several thousands of dollars of clothes and shoes collecting dust. We've given a lot of it to charity and still have full closets especially my wife. My closet (hanging clothes) could literally be 1 suit, 2 button down shirts, a pair of pants, 3 belts, and 2-3 polo shirts. That's it. That's probably extreme but the concept is valid.

To sum up, buy fewer, high quality items that have longer life span vs a lot of cheaper crap that will not last long. Seems obvious but most people do not do this.

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Yes, it's always best to maximize 401k if one can spare the money. Current limit is 19.5k. I was not aware of this limit or any guideline around it so just blindly did 10% for all these years. Last 3 years when I found out, I have been maximizing both deferral to come to 19.5k and also company match. I get free money and also 19.5k is saved from taxation for the year. When I leave the company the money goes into my IRA and grows there.

Good plan above.

I plan on working till max 60 years of age which is about a decade away but I am on track. One needs to plan as early as possible.

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Just a couple FYIs since you mentioned you weren't aware of the limits previously--but at age 50 you can start putting in an extra $6000 "catch up contribution" on top of the $19500 to give you a $25,500 total available contribution limit.

Also--if you retire at 55+, you can take money out of your last employer's 401k without penalty--so consider that before rolling it over depending on your age and timing.

rononeill said:

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Now, this part isn't hard- i can't express this with enough emphasis how important this is, talking lifetime important- but takes a dedicated 15 minutes. Open a brokerage account and set up a secondary direct deposit to it. Pick a number, any number- $20, $500 - and have it go straight there. You now have a widget in place you can modify within 30 seconds. But do it smartly. Next, Figure out what your monthly expenses are, add a little bit; then update your widget to send everything else to the brokerage account.

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This, this, this. This CANNOT be overemphasized.

My wife and I have Life Insurance Policies with Lincoln Financial that we set up 25 years ago (when it was Aetna). I'm sure there's some number-name for it, but I can't find it right now. The monthly premium is $3.50 a month but we have $100 each direct deposited into it every month. The remaining $96.50 is invested in various market funds. Since it is post-tax, we can draw off any gains (there's a minimum amount that has to remain) penalty and tax free for anything. I've paid for two kids to go college and will still have some leftover when the second (Class of '23) graduates.

That said, it's not strictly a college fund; that's just how we've used it. We were originally under the impression that it could only be used for education. When we started withdrawing for the first kid we learned we could have been using it for anything all along. So glad we didn't know that- but I digress.

Over the years it has built up enough to graduate two kids debt-free, so that says something about the growth rate. While not phenomenal- we couldn't retire on it- it did become big enough to make a significant impact. Only regret is that we could've raised the amount deposited along the way but never did.