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 Post subject: 100K Salary, Paid off Debt
PostPosted: Sun Dec 23, 2012 9:47 am 

Joined: Sat Dec 22, 2012 5:51 pm
Posts: 2
Hi, I'm a 25 year old contractor originally from Philadelphia, Pennsylvania working overseas making $100,000 from the income I earn from my employer. I've used my earnings to pay off my car loan on my Dodge Challenger two years early (I know, a brand new sports car was a bad investment to begin with, I was a 22 yr old knucklehead lol). I've also paid off other debts, such as money that loved ones have lent me when I was in between jobs, and some older outstanding bills. I'm now debt free.

I realize that I'm in a unique position for someone in my age group with my income, and I want to capitalize on my current financial position and make my money work for me. With all my incomes including my Post 9/11 G.I. Bill, I have an anual income of about 120,000/yr. With all the debt that I've knocked out, I'll have about 90,000 to play with, and I've been thinking about getting into investments. I was wondering if you guys could give me any insight since I get the feeling that a mojority of posters on this site are older, wiser, and have had more experience in handling large amounts of money. So what are some things I could do that'll make my money multiply?

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 Post subject: Re: 100K Salary, Paid off Debt
PostPosted: Fri Jan 04, 2013 4:11 pm 

Joined: Sun May 29, 2011 4:50 am
Posts: 184
"save early, save often."

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 Post subject: Re: 100K Salary, Paid off Debt
PostPosted: Wed Jan 30, 2013 10:52 pm 

Joined: Wed Jan 30, 2013 6:05 pm
Posts: 4
First, thank you for protecting Us all and serving the country. Good work!
I am one of those older snowballers, and I've been a saver all my life. I've gotten independent by many means, and that includes a career in which I can drop in and out when I want or need to work, finally, at age 49 ( started working seasonally at 47)
I've lost money ($65,000 in an investment that went south) and didn't let it deter me. So how do you do it when you are debt free at age 22? Here is how. REMEMBER there is no such thing as a large amount of money if you are spending it. Always have a mortgage, but never on the home you live in. Play Monopoly, only with real houses. Stay where you are, working and saving money, and pay cash for the smallest home in a great neighborhood. When you are living in that paid-for house, make your first mortgage be on another home you would live in yourself. Rent it out. When it is paid off, buy a third. Pay off the second house by making the mortgage payment with the rent and $1000 a month of your own money. Pay off the third house mortgage by a combination of the profit from the second house plus the $1000 of your own.

Buy a broad stock index ETF and hold it, and keep buying some more and some more and some more and some more until you are age 50. A broad index mutual fund tracks the whole stock market. But a mutual fund costs more in fees than an ETF, so the ETF is better. Completely utterly ignore the stock price, just buy at steady constant intervals (dollar cost averaging).

Maximize 401k, 403b, iRA, etc.

REMEMBER: the law of compound interest says what you do BEFORE age 30 can never be made up for after age 30. In essence, every dollar saved and invested now will be worth MORE THAN 3 dollars saved after age 45.

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 Post subject: Re: 100K Salary, Paid off Debt
PostPosted: Thu Mar 28, 2013 3:33 pm 

Joined: Thu Mar 28, 2013 3:06 pm
Posts: 1
First off, good job. You are creating a great launch pad for a good future.

Now for the sage older advice (I'm about to turn 40).

The big thing you will need to consider is whether your current situation is sustainable. Where do you see yourself in 10-20 years. I suspect it is very unlikely you will be able to or want to continue the contracting work you currently do. At 25 it's not too bad to spend long periods of time away from home and loved ones. Most people meet someone and start a family, being away from home for extended periods of time usually isn't how someone would choose to live down the road.

Additionally, what are the chances the contracting work you are engaged in might dry up?

My suggestion. Make your 2012 and 2013 contributions to your roth IRA if your tax situation allows.

Keep saving, but keep that money easy to access and safe. Figure out what skill you want to develop that will be in demand over the long haul, this may involve college it may not. Use that money to go after your dream. When you are ready to settle down, find a partner that shares you common goals and values.

If your goal is to be a landlord, follow the other post. But it will be very hard to manage your investment from abroad effectively..

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 Post subject: Re: 100K Salary, Paid off Debt
PostPosted: Thu Mar 28, 2013 4:56 pm 

Joined: Sat Dec 22, 2012 5:51 pm
Posts: 2
Hey jamesdiego,

Thank you for the insightful response to my post, your advice holds weight since you have the wisdom from experience that comes with your age. I see what you're saying about me taking the future into consideration, and I've thought about that alot, especially with congress implementing these budget cuts on contracts. This particular contract that I'm on is set in stone for the next 5 years ("knock on wood), and I've just completed my first year with my current company, but our parent company (Booze, Allen, & Hamilton), wants to hire me for my second year. BA&H will pay me an additional 25k (with added benefits) to do the exact same job I've been doing these past 12 months, which is a win win. So to get to the point, I would really consider doing that for the next 5 years until I'm 30, which means I would accumulate an additional 625k. I also realize there's no such thing as true stability in this current economy, so I'm using my G.I. Bill to get a degree in accounting, while using the VA to pay for my IT certification courses......and that way I'll have a chance of getting into another career field for when these jobs dry up. I'm also thinking about getting back into the Air Force Reserves, so that way I can earn more G.I. Bill money while not having to be obligated to serve full time. Basically, I have alot of options right now, but that seems like the most logical path to take at this time.

If I accumlate 625k within the next five years, how much of that should I have in savings? I'm going to look into putting money into an IRA, I've been hearing that alot recently.

Oh, and I'm not focusing on any serious relationships right now lol, at this point, I kind of see it as being a distraction from my goals. I don't really feel like I'm missing out on much rigt now, I don't see myself starting a family anytime soon, but that's me, to each is own lol.

But once again, thank you and everyone else who responded to this post.

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 Post subject: Re: 100K Salary, Paid off Debt
PostPosted: Fri Jun 21, 2013 8:26 pm 

Joined: Thu Jun 20, 2013 9:01 am
Posts: 20
The post has a bit of age to it, but wanted to weigh in. I don't have much to offer in terms of investment, but once the money is in hand the temptation will come to find ways to use it(I mean in a bad way). I feel the best course of action short term is to put it in something that is more hassle to pull out on a whim while you are choosing like a CD or money market. Being single and having that much money can go to your head once your done working over there. Money can change you quickly. I don't mean to sound insulting. I'm only 28, but I know how just a little extra can effect you. Also, I have a friend who had a very high paying job as well and was only 18. He took the other direction, and lived it up. He is broke now, 26, unemployed and 100k in medical bills because of a work related injury that is still in process(back injury).
Horrible credit, and no savings.

You sound like your really thinking this through, so your ahead already on that front. Just remember no matter how much money you have, live like you only have just enough to make it, and be happy with that. If you feel like you have a lot of money, it becomes easy to use it. Especially once you get back into the states. Everywhere you turn someone else is telling you why you need to give it to them(cell phones, lastest stuff, cars, etc..)

I may be off on all this, but knowing the other side of your situation of no disposable income, and a lot of debt you want to avoid any possibility of that happening as best as you can! Safeguard yourself.

And thank you for your service!

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 Post subject: Re: 100K Salary, Paid off Debt
PostPosted: Tue Jul 02, 2013 9:30 pm 

Joined: Tue Jul 02, 2013 6:21 pm
Posts: 51
Hi Amir :

When I first saw your post I thought , I wish I could make that money. Then, I took a breath in and said to myself, Do you really want that ?

I got a little scared. You see I am 55 and tired but not retired. Yet I have made like a $150k in only one year in the stock market and is only going to get better if my wife survives her lung cancer. Serious.

There is a big rule to follow when you invest. You must understand what you invest in and you should not expect to get rich with an investment which is popular. Warren Buffett.

I could tell you what to invest in and you can still lose money if you don't understand the company I am investing in and how the market behaves.

If you want to make money with money and you earn so much money, I think you should first save money, as much as you can. You never know until when you will still earn that money. So being so young and so fortunate to make so much money and coming here for money management advise is very smart and unusual for someone your age.

The car you picked is gorgeous and I am glad you found out it was not a good investment. I bought two new cars in my life. The second one I leased it and that was a pretty bad deal.

My advise is that you study investments after you save your cash and then test the investment you picked with an amount of cash you are willing to lose if something goes wrong. If you lose don't quit. Study harder. The harder you study your investment the better you will do.

A word of caution. Investments are simple but not easy. Do your thorough research. If the crowd is investing in something, you must understand why. Invest like the Pros. Read about the pros and learn from the things they do right and do not repeat their mistakes. If you are not willing to buy more shares of your investment if it loses more than 40% in value you should not invest into stocks yet.

I made the mistake of buying a new apartment when I lived in Mexico because all my friends were doing so. It was a lousy investment. I lost the apartment shortly.

Just like Landslave I am also into real estate. He knows about real estate. I am today into real estate stocks and doing terrific. I waited 54 years until I got it right and I studied very, very very hard all the way.

I've learned something in life. The things that are going to go well start well. If things start bad don't expect things to get better if you keep on doing the same thing. That's how I ended screwed up for a real long time by my first wife and that's how I lost big money in my dental profession. Yeah, dentists do well, but not me. Well, now I am getting rich slowly. It was a nerve wrecking endless test.

Just remember, if it starts well, chances are it will end up well, and not the other way around.

I hope you find my post helpful.


PS- Hide and Seek song by Howard Jones to all beaten down and lost super winners.
To you brother Jesus.

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